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U.S. Needs AT&T/T-Mobile Merger, Says Larry Cohen on C-Span

21 Sep, 2011

Appearing on C-Span's The Communicators series, CWA President Larry Cohen reiterated the reasons the union supports the AT&T/T-Mobile Merger: that AT&T would repatriate offshored jobs and would benefit the parts of the country underserved by broadband networks.

Asked how the merger would benefit consumers, Cohen pointed to AT&T's pledge to boost rural broadband build-out, which the Obama Administration has called for and rural America needs to develop jobs there. He said that for broadband to get to rural America, it would likely be wireless, and that AT&T was pledging speeds of 10 Mbps downstream, CWA's definition of high-speed.

Cohen was paired off on the program against Vonya McCann, Sprint Nextel SVP for government affairs, whose company lost out to AT&T in a bid to buy T-Mobile and now, as a "jilted suitor," has filed suit to block the merger. McCann refused to say whether the adamantly anti-union Sprint was planning to bid on T-Mobile.

Cohen, in turn, suggested that DOJ, in its decision to oppose the transaction, has misread the situation.

First, Justice ignores the dynamic and competitive nature of the wireless industry, with the FCC documenting that there are at least five competitors in most local markets. Moreover, Justice ignores wireless alternatives by confining the relevant market to four principle companies, Verizon, AT&T, Sprint and T-Mobile. The DOJ errs by not taking into account Microsoft, which competes for callers via Skype, other over-the-top data and voice players Apple and Google, or Clearwire and LightSquared.

Second, the U.S. needs AT&T's resources and commitment to high-speed broadband build-out. (add link)According to Cohen, broadband built-out is critical to rural economic development, and absent the merger commitments, which should be adopted as strong merger conditions, there is no policy lever to achieve this critical goal.

Third, the DOJ suit disregards the fact that T-Mobile will not remain a strong competitive alternative going forward. Deutsche Telekom's top executive told Congress that the parent company would not make the investments in a T-Mobile 4G LTE network. Without next-generation technology, Cohen said, T-Mobile will continue to decline.

Finally, Cohen emphasized that the DOJ's decision, will have political consequences for the Obama Administration. It will be a problem, he said, to stand in the way of rural broadband expansion and job creation.