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Congressman urges careful evaluation of AT&T/T-Mobile merger plan

AT&T Inc’s proposal for the acquisition of T-Mobile USA, a $39 billion merger, has led to pressure on antitrust regulators to quash the plan.

Congressman Lamar Smith, chairman of the House Judiciary Committee, called such opposition one-sided. He made the statement in a letter he addressed to both the Federal Communications Commission (FCC) and U.S. Justice Department. He urged them to carefully examine the benefits that the merger could provide.

Among the benefits he contended the merger would provide were the creation of new jobs, the improvement of AT&T’s broadband capacity, and providing incentives for new invention. He further stated the belief that the merger would motivate AT&T’s other competitors to improve their wireless networks.

AT&T also argued that the proposed deal would allow it to service more customers and provide them with faster communication.

The congressman’s position fell short of outright approval of the acquisition, but did say that opposition coming from some lawmakers in Congress was the result of limited information rather than a comprehensive examination of all available evidence.

Senator Herb Kohl, who chairs the Senate Judiciary Committee’s antitrust subcommittee, has opposed the merger. Opponents of the merger argue that it will harm the public interest and violate antitrust statutes, as well as raising the price of service.

Following the merger, AT&T and Verizon Wireless would account for 80 percent of the nationwide wireless market.

T-Mobile USA is currently a competitor to AT&T in the wireless telecommunication market. Deutsche Telekom AG currently owns T-Mobile USA.

Source: Reuters, “U.S. lawmaker challenges opposition to AT&T merger,” Jasmin Melvin, Aug. 2, 2011

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