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MAPetalPetitionToDenyATT-TMobile31May2011

MAPetalPetitionToDenyATT-TMobile31May2011

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Published by: MAG-Net on Jun 05, 2011
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09/07/2012

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 Before the
Federal Communications CommissionW
ASHINGTON
, DC 20554
In the Matter of Applications of AT&T Inc. andDeutsche Telekom AGFor Consent To Assign or Transfer Control of Licenses and Authorizations
))))
WT Docket No. 11-65
 )))JOINT PETITION TO DENY OF CENTER FOR MEDIA JUSTICE,CONSUMERS UNION, MEDIA ACCESS PROJECT,NEW AMERICA FOUNDATION, AND WRITERS GUILD OF AMERICA, WEST
Malkia Cyril Chrystiane PereiraAmalia Deloney Andrew Jay Schwartzman
 
Center for Media Justice Media Access Project
Counsel for Center for Media Justice,
Parul P. Desai
Consumers Union, New America Foundation
 Consumers Union
and Writers Guild of America, West 
 1625 K Street, NWSascha Meinrath Suite 1000Michael Calabrese Washington, DC 20006Benjamin Lennett (202) 232-4300Sarah J. Morris cpereira@mediaaccess.orgNew America FoundationEllen StutzmanWriters Guild of America WestMay 31, 2011
 
 
- ii -
TABLE OF CONTENTSSUMMARY..................................................................................................................................iii
 
INTRODUCTION.........................................................................................................................2
 
DISCUSSION................................................................................................................................7
 
I.
 
No Matter the Market Analysis Metric Utilized by the Commission, the ProposedMerger Would Decrease Competition and Would Not Serve the Public Interest.......7
 A. The Merger Would Work Incurable Harm to Competition in the National Market forMobile Wireless Communications Services, and Would Reduce All Carriers’ Abilityto Compete with the Post-Merger Duopoly..................................................................9B. The Commission Cannot Ignore Relevant Market Effects from This ProposedTransaction, Nor Overlook Harm to the Public Interest in All Relevant Markets......14
II.
 
Elimination of T-Mobile as a Competitor Would Eliminate an Innovative“Maverick” in the Marketplace for Wireless Services................................................19
 A. T-Mobile Has a History of Exerting Downward Pressure on Prices..........................19B. T-Mobile Has a History of Positive and Disruptive Behavior in the Marketplace.....22C. Approval of the Merger and Elimination of T-Mobile Would Stifle Innovation........28D. The Merger Also Would Constrict Choice and Negatively Impact Mobile WirelessBroadband Delivery of Video Programming and Other Forms of Expression...........30
III.
 
The Deal’s Purported Efficiencies Are Speculative, Unproven, or Not MergerSpecific, but in any Event Would Not Offset the Public Interest Harms...................31
 A. AT&T’s Spectrum Efficiency and Coverage Claims Are Speculative, and to theExtent They Have Any Merit, Serve Only to Highlight Its Past Failure to Invest.....32B. AT&T More Readily Could Expand Capacity by Investing in Its Own Network,Without the Merger’s Harm to Competition and Innovation......................................36
IV.
 
Approval of the Merger Would Increase Prices Paid by, and Decrease InnovativeService Offerings Available to, Mobile Wireless Customers.......................................39
 A. The Largest Nationwide Providers Already Engage in Parallel Pricing and Conduct –a Problem That Merger Approval Would Exacerbate.................................................39B. The Elimination of T-Mobile Would Mean the Elimination of Innovative, andRelatively Low-Cost Nationwide Carrier, All to the Detriment of Consumers,Especially Underserved Populations and Regions......................................................43
CONCLUSION...........................................................................................................................51
 
 
- iii -
SUMMARY
AT&T seeks approval of a transaction that effectively would create a duopoly in themobile wireless market. Removing T-Mobile, the most aggressive and feisty of the fournationwide carriers, as a competitor, would enable AT&T to stifle innovation, increase prices,and decrease choices for wireless customers – especially wireless broadband users. Thesenegative impacts of the proposed acquisition would harm all consumers and harm the publicinterest in general.Moreover, the merger likely would cause the most harm to traditionally unserved andunderserved populations, including members of communities of color and rural residents, whorely to an even greater degree on affordable and innovative wireless broadband service offeringsto access the Internet and partake in its benefits. It also would interfere with the development of new avenues for creative expression. This would be especially harmful to independent creatorsand others who use the Internet – and increasingly use mobile wireless broadband access thereto– to create and distribute all manner of video programming and other types of artistic works andpolitical expression.T-Mobile is a direct competitor to AT&T. Its ads directly and forcefully challenge AT&Tby name. Moreover, T-Mobile is a classic example of a “maverick firm.” It has been atechnological innovator, introducing breakthrough products like the Sidekick. It was the firstadopter of the Android operating system. It is, by far, the pricing leader among the four nationalwireless companies. Antitrust law recognizes that such “maverick firms” are disproportionatelyimportant in highly concentrated markets because they have strong incentives not to model theirbusiness practices on those of the dominant companies. Thus, eliminating T-Mobile would beparticularly valuable to AT&T and Verizon.

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