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Sprint: T-Mobile Not a Fix for AT & T Capacity Crunch

Tue, 06/21/2011 - 8:13am
Maisie Ramsay

Sprint attacked AT&T's buyout of T-Mobile USA again yesterday in its latest round of arguments to the FCC denouncing the mega-merger.

The carrier's most recent offensive claims that AT&T can increase the capacity of its network by more than 600 percent by 2015 at a fraction of the $39 billion it's shelling out to buy T-Mobile, its third-largest competitor.

The 299-page technical analysis was prompted by the FCC's June 20 deadline to respond to AT&T's defense of the T-Mobile merger, which claimed that the deal was the best possible solution to meet its customers' crippling demand for mobile data.

"AT&T's purported rationale for the proposed merger -- that there is no other way to meet its projected data service demand growth -- is simply unfounded," said Sprint spokeswoman Vonya McCann. "AT&T could increase its capacity by developing its warehoused spectrum, accelerating its 4G network buildout, and implementing a more efficient network architecture, just as other wireless carriers around the world are doing today."

AT&T quickly shot back at Sprint.

"A company that has outsourced the management of its own network shouldn't be giving advice to others," an AT&T spokeswoman said, alluding to Sprint's $5 billion outsourcing deal with Ericsson, which transferred the operations of its network to the Swedish infrastructure vendor.

Sprint also criticized AT&T's pledge to expand its LTE network to an additional 55 million people in rural areas of the country if the merger is allowed to go through.

"AT&T's LTE 'promise' is in reality an empty threat to withhold its LTE deployment to rural and exurban areas if it does not get its way in this proceeding," Sprint said.

AT&T's promise to expand LTE into rural America has been particularly appealing to government officials. Several state representatives have cited AT&T's LTE plans when voicing their support for the operator's merger with T-Mobile.

U.S. Cellular, the Rural Cellular Association, the Rural Telecommunications Group, MetroPCS and NTELOS also came out swinging against AT&T's buyout of T-Mobile in comments filed with the FCC yesterday, which reiterated their prior arguments against the deal.

Public interest group Public Knowledge took a novel approach in its opposition to the deal, claiming that the merger was illegal under Section 314 of the Communications Act, which prohibits transactions between domestic and foreign companies that would "substantially lessen competition" for international communication or any other related "line of commerce."

AT&T would have a monopoly hold on GSM roaming within the United States if its merger with T-Mobile is approved. Public Knowledge argues this makes AT&T's buyout of T-Mobile illegal.

"Section 314 is an absolute statutory bar against the transfer. In the rare cases where, as here, a transaction triggers Section 314, the Commission has no choice but to deny the Application," the group wrote.

AT&T did not respond directly to Public Knowledge's attack on the deal, but referred to a post on its corporate blog titled: "It is Much Easier to Be Critical than to Be Correct," which attacks opponents to the proposed buyout.

"The bottom line is that the combined company will be able to offer more output and higher quality service – and that's a good thing for consumers even if our competitors don't like it," AT&T spokeswoman Joan Marsh wrote in the post.

AT&T has used its formidable lobbying power to amass political support from representatives at the state level. It remains to be seen how political pressure on the deal will affect the final decision on the merger from the FCC and antitrust regulators at the Department of Justice.

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