AT&T/T-Mobile merger on the hot seat as Sprint files to block it

Looks like the Federal Communications Commission wants a lot more data from AT&T before the agency will green light its bid to acquire T-Mobile. The FCC has posted no less than 50 questions for the telco, asking the wireless giant to defend the very first claim that its public interest statement makes in defense of the marriage.
"AT&T faces network spectrum and capacity constraints more severe than those of any other wireless provider," the opening AT&T document contends:

and this merger provides by far the surest, fastest, and most efficient solution to that challenge. The network synergies of this transaction will free up new capacity—the functional equivalent of new spectrum—in the many urban, suburban, and rural wireless markets where escalating broadband usage is fast consuming existing capacity. This transaction will thus benefit consumers by reducing the number of dropped and blocked calls, increasing data speeds, and dramatically expanding deployment of next-generation mobile technology.

But the FCC wants a lot more help with this constraint assertion. To justify AT&T's claim, the agency is asking the company to provide "all plans, analyses, and reports discussing the relative network spectrum capacity constraints of the Company and other mobile wireless service providers, including any relevant pricing, traffic and spectrum efficiency assumptions."
The agency would also like AT&T's definition of what actually constitutes a spectrum constraint, "including the factors involved in making that determination in any relevant area." And it would like to know if the company considered any alternatives to buying T-Mobile to solve the alleged dilemma. Has it considered boosting its network capacity? Adding additional cell sites? Expanding backhaul? "Acquiring new spectrum?"

A full and complete analysis

Actually, AT&T wants to do some more spectrum buying too. It's seeking the FCC's blessing to buy licenses from Qualcomm and Knology of Kansas, and five public interest groups want the Qualcomm transaction rolled into the T-Mobile merger application process. Both proceedings "should be combined to enable a full and complete competitive analysis," Free Press, Public Knowledge, the Media Access Project, and two other groups urged. Agreed, say MetroPCS, Sprint, and Rural Celluluar Association in their own filing.
Meanwhile, two states have launched or are considering investigations of the deal. The Lousiana's Public Utilities Commission's probe was open for comments as of Thursday, with a 15-day period for third parties to file protests and a 45-day window for AT&T to respond.
California's State Public Utilities Commission has asked its staff to prepare a document that would "launch a proceeding to gather information and to review the merger proposal in light of relevant state law and public policies." The CPUC will vote on whether to approve the document on June 9. And Hawaii, Arizona, and West Virginia may look at the merger, too.

Twin Bell duopoly?

Since May 31 is the last day for Petitions to Deny the merger, Sprint has submitted its petition to the FCC. The smaller telco is probably the most outpoken critic of the proposed union.
"The Commission faces a stark choice in this proceeding," Sprint says:

It can reject AT&T’s bid to take over T-Mobile and extend the last two decades of robust competition in the wireless industry-competition that has promoted economic growth and advanced U.S. global leadership in mobile communications. Or the Commission can approve the takeover and let the wireless industry regress inexorably toward a 1980s-style duopoly. A duopoly of the two vertically-integrated Bell companies would result in less choice for consumers and higher prices. A Twin Bell duopoly would stunt investment and innovation. No divestitures or conditions can remedy these fundamental anti-consumer and anti-competitive harms. AT&T’s takeover of T- Mobile must be blocked.

That alleged duopoly (Verizon and AT&T) would control 82 percent of post-paid subscribers, Sprint warns, more than 78 percent of wireless revenue, and 88 percent of all profits. "The Twin Bells' market dominance would dwarf Sprint, the sole remaining national carrier, and the rest of the wireless industry, thereby creating an entrenched, anti-competitive duopoly," the filing contends.
While all Petitions to Deny are due by the end of Tuesday, the public can still file oppositions or supportive comments through June 10 and replies to oppositions through June 20. The Commission's comment page for the proceeding is here.