U.S. senators cite benefits of AT&T, T-Mobile deal

Thu Aug 4, 2011 12:39pm EDT

* Lee, Cornyn disagree with calls to block AT&T merger

* Say the benefits must be explored before decision made

* Senate antitrust panel split on review of merger

By Jasmin Melvin

WASHINGTON, Aug 4 (Reuters) - Two Republican senators urged U.S. officials to consider the benefits of AT&T Inc's (T.N) $39 billion bid to acquire Deutsche Telekom AG's (DTEGn.DE) T-Mobile USA.

Mike Lee, the top Republican on the Senate's antitrust subcommittee, and colleague John Cornyn, sent a letter to the U.S. Justice Department and Federal Communications Commission, urging them to consider all the available evidence before deciding whether the transaction should go through.

The senators cited the faster fourth generation service that AT&T has said it can rollout faster to more customers if the merger is approved. The deal could also spur handset innovation and development of new applications, the senators said in the letter dated Wednesday.

The antitrust panel's Democratic chairman, Senator Herb Kohl, urged authorities last month to block the deal, saying there were no effective remedies that the companies could offer to stop the merger's harm to consumers and competition.

If approved as proposed, the merger would concentrate 80 percent of the U.S. wireless market in just two companies: AT&T/T-Mobile and Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L).

AT&T argues the purchase of T-Mobile will help it expand faster service to more customers. Critics charge that less competition will increase prices and limit consumer choice.

Lee and Cornyn said the deal could be of great help to the quality of mobile broadband service in the United States, improving network capacity and increasing data speeds.

"The testimony and materials presented to the Antitrust Subcommittee highlight potential benefits to consumers that deserve meaningful attention," they said in their letter.

Representative Lamar Smith, chairman of the House Judiciary Committee, sent a similar letter earlier this week to the two government agencies.

The Justice Department is conducting an antitrust review, and the FCC is weighing whether the transaction is in the public interest.

Lawmakers have no direct role in reviewing the merger that was proposed in March, but Congress, through oversight of the regulators, and by holding hearings on such deals, can influence the climate of public opinion.

A Yankee Group study released this week said that without strong regulatory provisions to protect the public, the deal will reduce consumer choice and lead to higher prices. (Reporting by Jasmin Melvin; Editing by Tim Dobbyn)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.