Executive’s Desk: AT&T misrepresents T-Mobile takeover

The role of New Mexico’s Attorney General is to serve as a guardian of public interest. When a situation arises that compromises competition within the marketplace, it is incumbent upon the Attorney General to act swiftly to protect consumers and jobs.  AT&T’s $39 billion takeover of T-Mobile undoubtedly presents such an occasion, as this deal will limit choice and raise prices for consumers, while eliminating competition. 

In order to gain that public’s trust, AT&T has grossly exaggerated positive outcomes for consumers, and outright misrepresented their true intent for the acquisition. Time and time again, AT&T has said this deal will allow them to deploy wireless broadband to 97 percent of the U.S. population. What AT&T doesn’t tell you is that T-Mobile’s current network completely overlaps with theirs, which means this deal would only increase AT&T’s coverage by one percent and wouldn’t expand AT&T’s service to rural areas. Since 40% of New Mexicans live in rural communities, nearly half of New Mexico consumers will not benefit from this acquisition.

AT&T also fails to mention they already have the money and ability to expand their coverage to rural New Mexico. In fact, it would be cheaper and more efficient to build out their network.  In the end, this merger is about AT&T’s desire to once again dominate the market. Take, for example, the massive amount of spectrum AT&T has stockpiled in New Mexico. On average, they are holding more than 46.6 MHz of prime broadband-capable spectrum in the area. Why doesn’t AT&T build out to rural communities with this spectrum? 

What’s more, AT&T claims that the takeover is needed to provide them with the capacity to free up congestion to keep calls from being dropped. This argument is false for several reasons. For one, T-Mobile doesn’t give AT&T any unused capacity – T-Mobile’s network is already congested. AT&T, however, could improve their network capacity by simply adding new wireless equipment on existing cell towers, a process known in the industry as cell splitting. 

AT&T’s network capacity constraints could also be rectified by expediting the deployment of faster, more efficient technologies. While most carriers are transitioning new and existing customers to 4G technologies, which frees up congested network, AT&T’s migration has been slow. In fact, they still sell and subsidize phones that utilize the outdated and less efficient GSM spectrum. AT&T’s business model seems centered on squeezing every last dollar from the GSM spectrum, while carriers such as Verizon are planning for the future by improving their services. Using T-Mobile to mitigate capacity constraints is nothing more than a red herring, as the goal of the takeover is to wipe out the competition. 

And let’s not forget about the impact this deal will have on New Mexico’s rural wireless carriers. They rely on roaming access and backhaul infrastructure, the majority of which is owned by AT&T and Verizon, to operate. If rural providers are subjected to higher costs in order to provide roaming access, they will either be forced to pass the costs on to consumers or be priced out of business completely. And without adequate competition in the marketplace, consumers will be left with higher mobile phone bills and less innovation in the industry. 

To date, state attorneys general around the country, including Arizona, have initiated investigations into the takeover to determine what it will mean for their constituents. In the interest of the public good, Attorney General Gary King should follow suit.