Arizona Commission Approves AT&T/T-Mobile Deal

The Arizona order requires AT&T to notify T-Mobile customers in the state about the deal by mail within 90 days of the transaction’s close, but does not require any other actions. “The proposed Acquisition is not expected to impair the financial status of AT&T’s Arizona Operating Subsidiaries; neither preventing them from attracting capital at fair and reasonable terms, or impairing the ability to provide safe, reasonable, and adequate service,” the order said. The merger benefits cited by AT&T “are important to the continued and future quality of telecommunications services to Arizona,” the order said. AT&T is pleased the Arizona commission formally approved the merger, a spokeswoman said Monday. “We look forward to bringing the latest wireless broadband technology, 4G LTE, to the citizens of Arizona."

"Today’s decision in Arizona, which was never contested, does not change some very simple facts,” said Leigh Horner, director of corporate communications at Sprint Nextel. Nearly 40,000 consumers have contacted the FCC regarding the takeover, and “the overwhelming majority have asked the FCC to block it,” she said, saying industry entities, consumer groups and some politicians have also raised concerns. “We are confident the FCC and [Justice Department] will block this proposed transaction.”

AT&T/T-Mobile could face a tougher time in a few states that have yet to give their blessing. The Consumer Advocate Division of Hawaii’s Department of Commerce and Consumer Affairs notes that T-Mobile is an eligible telecommunications carrier in the state and is expected to meet the needs of unserved telecom customers as a recipient of Universal Service Fund money, said Executive Director Jeffrey Ono. The division doesn’t have a position on the deal yet and is requesting more merger information, he said. The regulator asked AT&T to quantify how the lack of spectrum for both AT&T and T-Mobile affects their ability to deploy LTE. It also asked AT&T to provide the estimated number of additional customers in Hawaii that AT&T will be able to provide LTE as a result of the combination.

The legal staff at the West Virginia Public Service Commission urged the agency to issue an order ruling on whether it will assert jurisdiction under state law or whether it believes it lacks jurisdiction and the matter should be handled by the FCC. West Virginia Attorney General Darrell McGraw recently filed with the state Public Service Commission supporting the takeover. T-Mobile has not been a “robust competitor” in West Virginia, he said. Because that company doesn’t have realistic plans to expand further in West Virginia and didn’t have the capital resources or the ability to easily raise the funding to expand there, the deal offers no significant competition or potential competition to AT&T, Verizon or Sprint, he said. California has a public hearing Thursday night on the deal and has scheduled a series of workshops looking at merger issues.

AT&T General Counsel Wayne Watts and numerous other AT&T and T-Mobile officials held a series of meetings at the federal commission last week on the deal (http://xrl.us/bky3w4). The arguments tracked those made by AT&T in previous filings. The deal would mean “better service quality -- fewer dropped and failed calls, faster data speeds,” as well as “a better platform for innovators” and “more efficient use of spectrum and more robust competition,” they said. Watts and other officials met with FCC General Counsel Austin Schlick, Wireless Bureau Chief Rick Kaplan and Renata Hesse, senior counselor to Chairman Julius Genachowski on transactions.

Vonya McCann, Sprint Nextel senior vice president and other company executives made counter-arguments to Kaplan, Hesse and other FCC officials, according to an ex parte filing. Sprint representatives expressed their “interest in meeting with Commission staff to address the competitive effects of the proposed takeover and the Applicants’ claims regarding the alleged public interest benefits of the transaction,” the filing said (http://xrl.us/bky3xi).

AT&T/T-Mobile picked up another endorsement by a governor -- Republican Jan Brewer of Arizona. That brings to 25 the number of governors supporting the deal. “The widespread deployment of next-generation mobile broadband offers our citizens of every walk of life access to the same benefits as the rest of the world,” Brewer said in a letter to Genachowski. “This technology would offer the elderly and our residents in remote areas access to new and modern state-of-the-art health care services through the use of robust telemedicine applications.”