AT&T told the FCC late yesterday that its buyout of T-Mobile USA would result in lower “quality adjusted” prices for consumers.
In a revised economic analysis of the deal, AT&T said “the merger simulations project that industry output will rise and average price adjusted for quality will fall as a result of the transaction.”
The operator based its conclusion on research conducted by University of Chicago business professor Dennis Carlton and his colleagues.
In its filing, AT&T argues the Upward Pricing Pressure (UPP) economic model cited by opponents to its merger with T-Mobile “does not account for the downward pressure on one merging party’s price created by the efficiencies-induced fall in the other merging party’s quality-adjusted price.”
The operator also provided its own results using the same economic framework as its opponents, claiming its analysis with the UPP model did “not support the claims of merger opponents that the proposed transaction will increase prices.”
The company’s full economic analysis remains confidential, though a heavily redacted version is available to the public.
Public Knowledge President Gigi Sohn was quick to criticize AT&T’s latest justification for the deal, calling it “exactly like the coach of a losing team calling time out so he can work the referees.”
“Unless this new ‘model’ can come up with a different answer to the problem of 4-1=3, (which would inevitably be followed by 3-1=2), we’re not interested,” Sohn said in a statement. “Removing a major competitor from the national wireless market still makes no sense.”
AT&T was required by the FCC to submit a revised version of its economic analysis of the T-Mobile merger after it presented new evidence for the deal at a July 13 workshop held in conjunction with the Justice Department.
The wait for new material prompted the agency to halt the informal 180-day shot clock for its review of the deal.
