The FCC held an all-day panel last week with its own top economists and representatives from AT&T, Deutsche Telekom and Sprint about its review of AT&T’s $39 billion buyout of T-Mobile USA and the deal’s possible economic fallout.
Representatives from the Justice Department also attended the July 13 workshop, according to documents filed with the FCC on Friday.
The panel was not open to the public. The event’s transcript is covered under the FCC’s protective orders for the merger and will only be released to individuals cleared for confidential access.
The topics discussed at the panel suggest the FCC is still considering how to review AT&T’s proposed buyout of T-Mobile, as well as heightened interest in the effects of the deal on the broader wireless market.
The panel, which stretched from 9 a.m. to 4 p.m. last Wednesday, discussed how regulators should define the market when reviewing the proposed merger and the “unilateral” and “coordinated” effects the deal could have on the market if allowed to go through.
AT&T has argued the deal should be reviewed on a market-by-market basis, instead of on a national basis, which could help the acquisition more easily pass regulatory muster by counting smaller regional wireless providers as local competitors. Sprint and other opponents to the merger have argued the transaction should be reviewed on a national basis.
The panel also looked into the efficiencies AT&T would glean from a merger with T-Mobile, as well as what the market would look like in a “but-for world” if the deal did not go through.
The discussion included a review of “exclusionary effects and the ability to raise rivals costs” that could result from the merger, referring to the possibility that the deal would allow AT&T to block competitors and raise their operating costs. If the deal is approved, AT&T will increase its already dominant position in GSM roaming and backhaul.
The workshop was moderated by Jonathan Baker and Gregory Rosston, FCC senior economists for transactions, and Patrick DeGraba, FCC chief economist in the wireless telecommunications bureau. Three consultants from Compass Lexecon represented AT&T and Deutsche Telekom, and three consultants from Charles River Associates represented Sprint.
If the FCC and Department of Justice approve the merger, AT&T would become the largest wireless operator in the country, and AT&T and Verizon Wireless would hold a combined 80 percent share of the U.S. wireless market.