AT&T, T-Mobile heads defend merger plans in DC
The proposed $39 billion merger between T-Mobile and AT&T was the focus of a Senate antitrust committee Thursday, with its chair warning of the "profound implications" of such a deal. While the two companies have repeatedly said the deal would take a year to close, in recent weeks regulators have appeared ready to slow down the process.
Combining the second and fourth largest wireless providers in the US would create a wireless behemoth that would likely far eclipse market-leading Verizon Wireless, and leave current third place Sprint in a precarious and unfavorable position facing two much larger competitors. Such a merger could prove difficult to approve.
To its own, Sprint has fought the deal tooth and nail, even calling it an attempt at returning to the days of 'Ma Bell.' On Thursday, that sentiment seemed to have the ear of some legislators.
At the hearing, the CEOs of both companies again played up their talking points favoring the merger: increased coverage, call quality, and high-speed wireless to more Americans than either could do on their own. They also claimed that the two companies weren't competitors, a statement that committee chair Sen. Herb Kohl (D-Wisc.) took great issue with.
"How can you say T-Mobile isn't a close competitor?" he was reported to have said during the hearing. He also stressed that there was no possible way the proposed deal would go through without any concessions, a statement that AT&T CEO Randall Stephenson seemed to agree with.
On hand, too, was Sprint CEO Dan Hesse, who told the Senators that if the deal went through, it would likely put his company in a position to be acquired. Surprisingly enough, concerns about a duopoly in the wireless market moved across party lines.
Sen. Mike Lee (R-Utah) said that while he generally did not approve of government interference in business, he did share some of Kohl's concerns about too much market consolidation. At least one Republican disagreed with that, including Texas Sen. John Cornyn.
Cornyn argued that allowing the two to merge wouldn't be a return to AT&T's former monopolistic position in telephony.