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Posted at 03:29 PM ET, 08/24/2011

FCC asks AT&T for more information on merger


AT&T President and CEO Randall Stephenson (L) and T-Mobile USA President and CEO Philipp Humm are sworn in during a hearing before the Antitrust, Competition Policy and Consumer Rights Subcommittee of the Senate Judiciary Committee. (Alex Wong, Getty Images)
The Federal Communications Commission on Wednesday asked AT&T for more information backing the company’s claims it needs to merge with T-Mobile in order to bring mobile broadband services to rural areas.

The FCC’s request comes after the discovery of private AT&T documents filed to the agency that showed the company figured it would cost $3.8 billion to bring 4G LTE wireless services to 97 percent of the country.

The documents, reported by media, raised criticism that the company didn’t need to buy T-Mobile for the much bigger price tag of $39 billion. The company had unintentionally filed the documents with information intended to remain private. The FCC later took down the document from its Web site. AT&T has argued to regulators that without the merger, it wouldn’t be able to expand high-speed mobile Internet access to as many rural areas as the U.S. government would like. The company said it didn’t have a business justification for the expansion.

After the documents were exposed, critics of the merger said the company’s purchase of T-Mobile appeared to keep a key competitor out of the market instead.

AT&T played down the significance of the leaked documents and the request Wednesday for more information.

“Requests from the FCC staff for additional information are to be expected given the detailed review they are undertaking,” said AT&T spokesman Michael Balmoris. 

In a letter, Renata Hesse, senior counsel for mergers at the FCC asked AT&T to provide estimates of costs for network expansion after the merger.

“We understand that AT&T’s senior management concluded the transaction would improve the likely return on the additional LTE deployment to create a business case for this deployment where one would not exist absent the transaction,” Hesse wrote. “Although AT&T has stated that it has not quantified the transaction-related changes in the business case for extending its LTE footprint, we ask that you supplement your filing with any documents or analyses explaining why the changes in cost, revenue, and/or profitability are likely to be large enough to change the overall business case for the additional deployment.”

Related:

AT&T to throttle speeds for heaviest wireless users

AT&T says merger on track for March 2012 approval

AT&T ramps up lobbying for merger review


By  |  03:29 PM ET, 08/24/2011

 
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