March 30, 2011

NY Atty Gen To ‘Closely Scrutinize’ AT&T/T-Mobile Deal

New York Attorney General Eric Schneiderman said on Tuesday that he would review AT&T's proposed $39 billion acquisition of T-Mobile USA for any potential anti-competitive impacts on consumers and businesses.

"My office will ensure New York consumers are protected," said Schneiderman in a statement.

"The merger must not reduce access to low-cost options and newest broadband-based technologies," he said, citing a potential "near duopoly" as a result of the proposed acquisition.

If approved, the deal would be the largest wireless merger in history, combining the second and fourth-largest wireless network operators.  The new company would have more than 130 million subscribers, making it the nation's largest wireless operator with 80 percent of the U.S. wireless contract customers.

Schneiderman said he would "closely scrutinize" AT&T's claims about the benefits of the acquisition, and would weigh those against anti-competitive risks.

"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," he added.

"Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future. We want to ensure all New Yorkers benefit from these important innovations that improve lives."

Connecticut Attorney General George Jepsen said the proposed acquisition raised concerns, and that he was working with other states on the best approach for a review.

"We will certainly be in contact with federal regulators and our sister states to determine the best approach to reviewing these competition issues," Jepsen said in a statement.

A spokesman for AT&T told Reuters the company was looking forward to sharing information with the state attorneys general, and reiterated the company's claims that the deal would provide many benefits, "including improved customer service and expanded high-speed LTE wireless coverage to additional residents."

The proposed acquisition is also expected to fall under intense scrutiny from U.S. antitrust officials.

The U.S. Federal Communications Commission and the U.S. Department of Justice are expected to take at least a year to review the deal, and are likely to impose significant conditions to the acquisition if it is approved.

Meanwhile, Sprint Nextel has complained that the deal would substantially change the wireless industry to the detriment of consumers, and called on regulators to block it.

"We will bring the regulatory fight wherever we need to," said Charles McKee, Sprint's vice president of government affairs, on Monday.


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