WASHINGTON — Top executives from AT&T and T-Mobile USA faced off against top officials from Sprint Nextel and Cellular South on Capitol Hill on Wednesday, as lawmakers considered whether AT&T’s proposed $39 billion acquisition of T-Mobile would produce better mobile service for consumers or crush competition in the industry.
Testifying at a Senate Judiciary subcommittee hearing on the transaction, Randall Stephenson, AT&T’s president and chief executive, said that the purchase would lead to fewer dropped and blocked calls and faster mobile Internet connections for subscribers. The deal also would position AT&T to cover more than 97 percent of the United States population with its new high-speed, fourth-generation wireless service, he said.
“This transaction is all about consumers,” Mr. Stephenson told the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights. “It’s about keeping up with consumer demand. It’s about having the capacity to drive innovation and competitive prices for consumers.”
But Daniel Hesse, Sprint Nextel’s chief executive, warned that if federal regulators approved the deal, the wireless industry would regress to “a 1980s-style duopoly” dominated by AT&T and Verizon — with smaller carriers like Sprint struggling to compete. “We believe that the acquisition of T-Mobile USA by AT&T is a ‘bridge too far’ in consolidating too much market power in the hands of only two, similar companies,” Mr. Hesse said.
That point was echoed by Victor Meena, president and chief executive of Cellular South, based in Mississippi, who said the transaction would “allow the wireless industry to continue down a path toward a duopoly made up of Ma Bell’s two behemoth descendants.”
AT&T, the nation’s second-largest wireless carrier, is seeking federal approval to acquire T-Mobile USA, the fourth-largest, from Deutsche Telekom of Germany. The cash-and-stock deal would catapult AT&T past Verizon Wireless to become the biggest cellphone company in the country, and leave Sprint as a distant No. 3. Although it will be up to the Justice Department and the Federal Communications Commission to approve or block the transaction, Congress will probably influence the outcome of the government review.
From the start, AT&T has argued that the deal would produce benefits that help meet two crucial goals of the F.C.C. and the Obama administration: ensuring that all Americans, particularly those in rural areas, have access to affordable high-speed Internet connections, and freeing up more wireless spectrum to meet ballooning demand for mobile broadband services.
Mr. Stephenson told lawmakers that by allowing AT&T and T-Mobile to combine their limited wireless spectrum holdings, the transaction would enable both companies to make more efficient use of their existing airwaves at a time when both are running out of capacity needed to handle mobile apps, online video and other bandwidth-hungry wireless services.
He said that the volume of data traffic on AT&T’s network has surged 8,000 percent over the last four years — driven in large part by the popularity of the Apple iPhone, which until recently was available in the United States exclusively through AT&T. That has degraded AT&T’s service quality, particularly in dense metropolitan areas.
Source: http://www.nytimes.com/2011/05/12/technology/12phone.html