Smith Says Kohl Only Told Part of Story on AT&T/T-Mobile
Regulators should not discount the benefits of the AT&T/T-Mobile deal, House Judiciary Committee Chairman Lamar Smith, R-Texas, said in a letter that circulated Tuesday. Smith sent the letter Monday to Attorney General Eric Holder and FCC Chairman Julius Genachowski. The top Republican on Judiciary disputed recent opposition by Senate Antitrust Subcommittee Chairman Herb Kohl, D-Wis., and some other members (CD July 21 p1). “Unfortunately, they provided you with only one side of the story,” Smith wrote.
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The deal would allow AT&T to enhance its broadband network, use spectrum more efficiently and expand LTE to 97 percent of the U.S., among other things, Smith said. “These benefits of the merger, if they come to pass could improve mobile service for my constituents and others throughout the nation,” he said. “Any description of the evidence from the congressional hearings that omits evidence of these benefits paints an incomplete picture. There is at least as much evidence in the hearing record supporting the merger as opposing it."
Stifel Nicolaus said the Smith letter could prove “helpful” to AT&T. Not so helpful, Stifel said in a research note, was MetroPCS’s slowdown in subscriber growth, reported Tuesday (See related story). “If replicated by other wireless providers, the results could undercut AT&T’s arguments that competition from smaller rivals was thriving and would make up for the loss of T-Mobile in the marketplace,” the firm said.
"It is certainly helpful for AT&T, but it is still somewhat surprising that this is the best they can get from a home state Republican,” said Public Knowledge Legal Director Harold Feld. “During the Comcast/NBC merger, you had Republicans who were offended that anyone could even think of questioning the deal. Here, the endorsement is considerably more qualified."
"I think Rep. Smith’s letter, especially given his stature as chairman of the House Judiciary Committee, indeed counts for something with respect to FCC and Justice Department reviews of the proposed AT&T/T-Mobile merger,” said Jeff Silva, analyst at Medley Global Advisors. “At a minimum, Smith’s rebuttal represents to some degree a political offset to Democratic criticism of the deal and [their] calls for the transaction to be blocked."
Cablevision, meanwhile, raised questions about the deal in meetings with FCC officials. “Because of the unique role that T-Mobile plays in facilitating entry by partnering with other potential providers, the proposed transaction would substantially impair entry and diminish long run opportunities for innovation, investment, and competition from providers like Cablevision in the market for mobile voice and data services,” the company said (http://xrl.us/bk3x23).