FEW COMMENT ON CINGULAR-AT&T MERGER
Only a handful of commenters raised any questions about the proposed Cingular-AT&T Wireless merger, which would create the largest U.S. wireless carrier in FCC filings. But sources said that, though quiet at the FCC, some state attorneys general and competitors are already reaching out to the Justice Dept., which will review the merger. The only players to loudly oppose the merger at the FCC have been Consumer Federation of America (CFA) and Consumers Union in a joint filing.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“I was a little bit surprised there were so few comments,” one analyst said: “I didn’t expect any of the wireless carriers to oppose it. I thought there may be a few more filings like the one from [CFA].” The analyst said the lack of formal protests can be misleading and that mergers have died because of DoJ concerns. “Any of these companies can go quietly to DoJ and complain,” she said. “The level of real opposition isn’t necessarily reflected in the FCC filings.”
Analyst Jessica Zufolo of Medley Global Advisors said states in particular have concerns about the merger, but are hard-pressed to keep up with all of the other issues they're already tackling, such as intercarrier compensation reform and quality of service issues. She said politically it will prove difficult for the FCC to sign off on the merger before the Nov. elections. She also said Cingular has already beefed up its counsel to reach out to DoJ. “I don’t think the AGs will be quiet and I also don’t think competitors will be quiet,” Zufolo said: “In the absence of FCC merger guidelines the Justice Dept. will step in.”
NARUC in general hasn’t taken a stand on wireless issues, said Comr. Bob Nelson of Michigan, chmn. of NARUC Telecom Committee. “It doesn’t mean that we don’t see some problems,” Nelson said: “We've got a very healthy competitive environment in the wireless industry today. This merger may lead to other mergers and you may get a much smaller number of viable contenders. That’s not good for the American public.”
Mark Cooper, dir. research at CFA, said he was concerned but not surprised there were so few filings in the merger docket. “Given the track record of the DoJ and FCC people have given up,” he said Thurs. “People there have demonstrated you couldn’t dream up a merger they wouldn’t approve but we intend to fight it.”
Cooper said smaller companies can’t justify the costs of making arguments to regulators if they have little chance of success: “The private sector companies have to make a calculation is it worth my time to raise these issues. We don’t have to make that calculation.”
Among the handful of commenters, Thrifty Call, a competitive local exchange carrier, also warned of “likely anticompetitive effects” of the merger. U.S. Cellular said it doesn’t oppose the merger outright, but warned that national carriers should have to continue to make their facilities available for voice and data roaming. CWA said the merger would lead to “significant public interest benefits, with no corresponding harm to competition.”
Cingular said the merger would “be in the public interest” and help consumers by providing them with “better call quality, better coverage, improved customer care, expanded capabilities, including a broader range of data services.”
The FCC comment deadline was Mon. Cingular announced the proposal Feb. 17 to buy AT&T Wireless for $41 billion.