Senator Al Franken Recommends Rejecting the Merger of AT&T and T-Mobile

Posted by at 7:55 am on July 28, 2011

Senator Al Franken has sent a letter to federal regulators recommending that they reject the proposed merger of AT&T and T-Mobile. In the 24-page document, the Minnesota Democratic expressed concerns that the deal would competitively squeeze Sprint and other smaller players,ultimately resulting in a Verizon and AT&T duopoly. The Senator also fears the $39 billion acquisition of T-Mobile by AT&T would drive up wireless prices and cost thousands of jobs.

“This transaction is not in the public interest,” Franken said. “If approved, it would result in greatly reduced competition, the potential loss of thousands of jobs, higher consumer prices, and less innovation in technology.”

If the merger were to take place, Franken argues that it would give Verizon and AT&T control over 82 percent of the market. Sprint would hold 15 percent, but the Senator believes it would not remain competitive, its share shrinking until eventually, it would be absorbed by either of the two larger carriers, leaving the country with a two-player market.

Response to the AT&T buy out of T-Mobile, announced in March, has elicited both strong support and objections. Sprint and other smaller carriers vehemently object. Facebook, Microsoft and RIM back the merger because they believe the deal would help AT&T extend its 4G data network and help meet growing demand for wireless services. Verizon believes it will happen, but has concerns that the FCC will increase its regulation of the industry as a result.

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