Senators grill AT&T on T-Mobile merger

AT&T emerged largely unscathed Wednesday from the first congressional hearing on its proposed merger with T-mobile. 

The CEOs of AT&T, T-Mobile and rival Sprint laid out arguments regarding the $39 billion deal that the Federal Communications Commission and the Justice Department will investigate during the next year. 

{mosads}AT&T walked into the hearing with much on the line because lawmakers help shape the debate over how federal regulators should treat important mergers. What’s more, the Democratic senators who called the hearing are highly skeptical of the benefits of wireless consolidation. 

Still, AT&T did not appear to lose the day, as the conversation remained big picture and not a single senator stood up to say the deal should be blocked. 

Sen. Al Franken (D-Minn.), one of the fiercest antitrust watchdogs in the Senate, called for additional hearings but stopped short of saying federal regulators should block the deal.

AT&T chief executive Randall Stephenson told reporters after the hearing that he was pleased it was a “fact-based” discussion. He said he would return for additional hearings if invited. 

Public Knowledge President Gigi Sohn, however, pointed out that the Democrats asked tough questions about AT&T claims, with Sen. Amy Klobuchar (D-Minn.) inquiring as to why Verizon complains less about spectrum strains than AT&T despite the fact that it has smaller holdings. Sohn pointed out that no senators said the deal should be approved.

Senators in both parties raised concerns about whether the deal would raise prices and eliminate a vital source of competition. 

“A critical question is whether smaller regional carriers can compete in a post-merger market,” said Sen. Mike Lee (R-Utah), the ranking member of the Antitrust subcommittee. 

Democrats on the panel questioned AT&T’s claim that regional carriers provide robust competition to the wireless behemoths. Klobuchar pointed to AT&T marketing materials that advertise the benefits of contracting with a major national carrier. 

“How can you argue that this deal should be analyzed locally?” Franken asked. Stephenson responded that local analysis is the Justice Department’s mandate.

Sprint’s top executive Dan Hesse, who has emerged as the deal’s chief critic, said his company would have a tougher time competing as a result of the merger. He also said it opens the door for another carrier to turn around and acquire Sprint.

“It does make us more of the takeover target over time,” he said. 

Stephenson reiterated after the hearing that he expects the review to take about a year.