AT&T’s T-Mobile Bid Draws Comments From Cowboys, Balloonists

AT&T's T-Mobile Bid Draws
Cowboys mobile telephone service out on the range will improve if AT&T Inc. buys T -Mobile USA Inc., according to the United States Cattlemens Association. Photographer: Joe Raedle/Getty Images

Cowboys’ mobile telephone service out on the range will improve if AT&T Inc. buys T-Mobile USA Inc., according to the United States Cattlemen’s Association.

“It’s always been a joke to us: More bars in more places. Yeah, but those bars ain’t in these places,” said Jess Peterson, the trade group’s executive vice president, referring in an interview to an old AT&T ad campaign.

With a filing at the Federal Communications Commission, the cattlemen joined songwriters, balloonists, governors, labor unions, technology companies and groups representing Hispanics and blacks to support AT&T’s $39 billion bid, according to a Bloomberg Government review of comments submitted to the agency.

On the other side, urging the FCC to block the deal, are other technology companies, public-interest groups and tens of thousands of people who are “very, very skeptical of this merger,” according to Craig Aaron, president of Free Press, a Washington-based policy group.

Through yesterday, the FCC had received more than 39,000 comments on the deal announced March 20, about 5,000 more than it fielded over 10 months on Comcast Corp.’s purchase of General Electric Co.’s NBC Universal unit completed in January.

“Because this deal is so big and the stakes are so high, I think you’ll find major stakeholders reaching out as far as the eye can see to round up support for their positions,” Jeffrey Silva, a Washington-based analyst for Medley Global Advisors LLC, said in an interview. “And what you’re seeing is a reflection of that.”

‘Some Weight’

AT&T, the second-largest U.S. wireless company, wants to buy Bellevue, Washington-based T-Mobile, a Deutsche Telekom AG unit that is the fourth-largest, to form a new market leader ahead of Verizon Wireless. It needs approval from the FCC and Justice Department, which are conducting a review that AT&T executives have said may last until March 2012.

Public comments carry “some weight” as the FCC completes a review that considers statements from rival companies, pleas by the merging entities, letters from lawmakers, views of antitrust officials at the Justice Department and economic analyses of the merger’s effect on competition, Silva said.

FCC spokesman Neil Grace declined to comment.

The FCC’s website doesn’t list deal proponents and opponents separately. Aaron, whose group says the transaction would erode competition and kill jobs, said comments are “running something like 10-to-1 against the merger,” including 30,000 comments from Free Press members that weren’t all sent as separate entries at the FCC.

Sprint Opposition

Those seeking to block the deal, saying it would lessen competition, include Sprint Nextel Corp., the nation’s third-largest wireless carrier; satellite provider Dish Network Corp.; and the Washington-based Computer & Communications Industry Association, which lists members including Google Inc. and EBay Inc. Yahoo! Inc., another CCIA member, urged regulators in a June 6 filing to approve the transaction.

“It’s clear that tens of thousands of individual consumers and organizations across the country agree with Sprint that AT&T’s proposed takeover of T-Mobile should be stopped,” John Taylor, a spokesman for the Overland Park, Kansas-based Sprint, said in an interview.

The CCIA told the FCC in a May 31 filing that the deal would wreak “competitive damage” and create “a dominant, vertically integrated Ma Bell with a degree of network control unprecedented in this country for 40 years.”

Cattle Producers

Most comments to the FCC that consist of more than a cursory e-mail support AT&T, Michael Balmoris, a Washington-based spokesman for AT&T, said in an interview.

“It is entirely natural that we would seek support for our merger, just as our opponents have sought support for their position,” Balmoris said in an e-mail. “The difference is that we seem to be having success and they are not.”

In filings, rural groups including the cattlemen’s association, which represents cattle producers, focused on AT&T’s pledge to extend wireless high-speed Internet to 97 percent of Americans. The Obama administration has made it a priority to increase airwaves available for smartphones such as Apple Inc.’s iPhone and other wireless devices.

“This merger can help bring the kind of communications and infrastructure and innovation that rural America needs,” the Washington-based cattlemen’s association said in its May 25 filing to the FCC.

“When we’re out on our horses, that’s our office some days,” said Peterson, who herds cattle in eastern Montana when not in Washington. “At our ranch, we’ll use phones to communicate, where different cattle are in different pockets.”

‘Didn’t Pay Us’

Officials from Dallas-based AT&T brought the deal to his group’s attention and said, “If you want to help us out, you can write to the FCC,” Peterson said. “They didn’t pay us to write a letter.”

The Louisiana Ballooning Foundation in a June 2 letter told the FCC the merger will bring more high-speed Internet access to Baton Rouge, Louisiana, where the foundation stages a hot-air balloon festival each August.

The letter was signed by George Richard, the ballooning foundation’s executive director, who in an interview said he read about the merger in the local newspaper.

“Our service here in Louisiana is not the best, there’s a lot of dropped calls,” Richard said. “And I just personally think the merger of those two companies will help improve service.”

AT&T contributes $5,000 annually to the balloon festival and didn’t contact him about the merger, Richard said.

‘Independent Decisions’

The support from outside parties has exceeded AT&T’s expectations and been an “extraordinarily interesting development,” Wayne Watts, AT&T’s general counsel, said during a news briefing June 21.

AT&T contributes to civic and charitable organizations because it is “a socially responsible business,” Watts said. “These entities then make their own independent decisions as to what they want to do, whether to support or not.”

AT&T gave $148 million in philanthropic contributions during 2010 through corporate, employee and AT&T Foundation giving programs, the company said on its website. In its 284-page filing to the Internal Revenue Service for 2009, the AT&T Foundation reported contributions to universities, museums, schools and United Way charities.

Sprint’s foundation has given more than $105 million since it was founded in 1989, according to the company’s website.

‘Hot Air’

Outside groups may not have fully considered the merger’s impact, said Art Brodsky, spokesman for Public Knowledge, a Washington-based policy group that opposes the deal.

“Like the Louisiana balloon association, we think a lot of these groups are full of hot air,” Brodsky said in an interview. “Many of them have no background in telecommunications. They have accepted AT&T’s promises at face value without realizing how many people who belong to those groups could suffer as a result of this deal.”

Combining the companies and removing T-Mobile as a competitor will bring “significant consumer harms” including higher prices and less innovation, Gigi Sohn, Public Knowledge’s president, told Congress on May 11.

Rick Carnes, president of the Songwriters Guild of America in Nashville, Tennessee, said he wrote a May 13 letter to the FCC supporting the deal because better mobile Web service may make it easier to listen to music streams offered by companies, rather than relying on illegal downloads from pirate websites.

“Streaming, we feel, is going to be the answer to illegal downloading,” Carnes said in an interview. “People aren’t going to want to download something they can stream immediately. So this is a two-fer for us: It makes us money and it stops the pirates.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE