Senator Herb Kohl, chairman of the Senate antitrust committee, has asked the FCC and the Justice Department to block AT&T’s merger with T-Mobile USA.
In a letter sent to the agencies yesterday, the Wisconsin Democrat said: “An acquisition which would decrease the number of national competitors from four to three in an already highly concentrated market, and one that eliminates the low price competitor from this market, is in my view highly dangerous to competition and consumers.”
Kohl’s statement wasn’t entirely unexpected. The senator appeared skeptical of AT&T’s buyout of T-Mobile at a May hearing on the deal and has been critical of the operator’s pledge to expand LTE service as a justification for the massive acquisition.
The importance of Kohl’s opposition to the deal could be diminished by his decision to retire. The 76-year-old senator announced in May he would not run for a fifth term in 2012.
AT&T said in a statement that Kohl’s “view is inconsistent with antitrust law, is shared by few others and ignores the many positive benefits and numerous supporters of the transaction.”
“This is a decision that will be made by the Department of Justice and the FCC under applicable law and after a full and fair examination of the facts. We continue to believe those reviews will result in approval of this transaction,” the company said.
Opponents to the deal welcomed Kohl’s decision to come out against the merger.
Sprint government affairs executive Vonya McCann said in a statement that Kohl’s letter “presents an extremely compelling review of the significant, adverse risks associated with the pending AT&T takeover of T-Mobile.”
“Sprint shares Senator Kohl’s extensive concerns and believes that the growing chorus of concern from policymakers, public interest advocates, and industry officials, along with tens of thousands of consumers who have filed objections with the FCC, cannot be ignored by the DOJ and FCC,” McCann said.
The Rural Cellular Association (RCA) applauded Kohl’s letter.
“It is clear that Chairman Kohl fully understands the enormous consequences the proposed AT&T/T-Mobile merger would have on consumers, competition and innovation based on the Subcommittee’s extensive review,” RCA President and CEO Steven Berry said in a statement. “I hope the Department of Justice and the FCC take heed of Chairman Kohl’s letter; he has it absolutely right – the merger must be denied.”
The FCC and DOJ have the final say as to whether AT&T will be allowed to go through with its buyout of T-Mobile. Though neither Congress nor the Senate have authority to block the deal, they could apply considerable political pressure to the agencies reviewing the merger.
The FCC today stalled its self-imposed shot clock on the deal after AT&T presented additional economic evidence for the merger at a workshop last week. The company maintains that the merger will close in a “timely manner.”