In a bid to combine the second and fourth largest wireless telecom providers, AT&T is proposing to merge with T-Mobile. The FCC, Department of Justice and the Attorney General of New York have taken notice. The review by the two federal agencies is standard practice for this type of proposed merger, and could take as long as a year to review. The New York Attorney General's review is not necessarily customary, but is being conducted to to ensure New Yorkers will not be adversely affected by the merger.
AT&T claims the merger would be beneficial to the state because of the expanded coverage for the company's next-generation wireless network to underserved and unserved rural areas.
AT&T has agreed to the sale of T-Mobile USA from Deutsche Telekom for $39 billion in cash and stocks. The total number of combined customers for the resulting super telecom provider would be 130 million people.
At stake in the deal is use of T-Mobile's AWS spectrum to add to AT&T's 700 Mhz licenses, creating a huge LTE footprint. In fact, the combined LTE footprint would be 95% of all Americans, more than 46 million more people than if AT&T did it alone. This would place the combined AT&T/T-Mobile company in a very strategically beneficial position, as the national interoperable public safety network envisioned by the Obama administration is being implemented. With President Obama's recent support of allocating the D-Block to public safety, the merger would pay big dividends in terms of staking a claim to the national public safety network.
According to the Deutsche Telekom press release, the proposed deal benefits consumers in the following ways:
Addresses wireless spectrum challenges facing AT&T, T-Mobile USA, their customers, and U.S. policymakers."This transaction quickly provides the spectrum and network efficiencies necessary for AT&T to address impending spectrum exhaust in key markets driven by the exponential growth in mobile broadband traffic on its network."
Improves service quality for U.S. wireless customers
AT&T and T-Mobile USA customers will see service improvements - including improved voice quality - as a result of additional spectrum, increased cell tower density and broader network infrastructure.
An additional 46.5 million Americans will have access to AT&T's latest 4G LTE technology.
While AT&T and Deutsche Telekom are touting the benefits of the merger, New York Attorney General Eric Schneiderman wants to makes sure pricing remains competitive. "
"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," Schneiderman said in a new release about his review of the merger. "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." His review of the proposed deal is expected to add additional time to the process. Connecticut and Minnesota have also indicated they will review the deal, and weigh in on any possible ramifications to their constituents.