{alltv} Franken sees AT&T-T-Mobile merger killing competition

Wednesday, July 27, 2011

{alltv} Franken sees AT&T-T-Mobile merger killing competition

LOS ANGELES (TheWrap.com) - Sen. Al Franken is urging regulators to pull the plug on a proposed merger between AT&T and T-Mobile.

The Minnesota Democrat says a marriage of the two companies would mean that only three national wireless carriers would remain.

The deal would leave AT&T in control of 43 percent of the market, with Verizon overseeing 39 percent of the industry. To the left-leaning legislator, that's a dangerous recipe.

"The merger of AT&T and T-Mobile would be a major step toward the creation of an entrenched duopoly in the wireless industry," Franken wrote in a 24-page letter to the Justice Department and the Federal Communications Commission.

"It would concentrate enormous power over the entire telecommunications sector in the hands of only two companies, and it would incentivize AT&T and Verizon to coordinate prices to the detriment of consumers."

Moreover, Franken says that the merger will result in decreased competition, less innovation and fewer jobs in a rapidly shrinking mobile landscape.

Franken says that the T-Mobile purchase continues AT&T's pattern of attracting new customers through mergers rather than by innovation.

"American consumers rely on the DOJ and the FCC to protect competition," Franken writes. "It is only through competition that wireless spectrum usage will become more efficient, handsets more innovative, customer service more responsive, network coverage broader, and prices lower."

Franken's objections second those of his fellow Democrat, Sen. Herb Kohl, but the merger between the two telecommunications companies has recently received corporate support from the likes of Facebook.

To go forward, the merger has to be approved by the Justice Department and the FCC.