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On Call runs every two weeks, alternating between answering reader questions and discussing hot topics in the cell phone world.
Immediately after AT&T announced its intention to acquire T-Mobile last March, opponents and supporters began to weigh in. And now, three months later, you’d be hard pressed to find anyone in the wireless industry who doesn’t have an opinion on the $39 billion transaction.
Choosing teams
For the most part, the two camps are lining up about how you’d expect. Consumer watchdog organizations are against the deal, while pro-business groups and rural broadband proponents are in favor. Rival carriers aren’t as easy to pin down. Leap Wireless and (most notably) Sprint have led the “No!” charge, MetroPCS is straddling the fence, and Verizon Wireless hasn’t said a thing. And, of course, politicians in and out of Washington, D.C., are picking sides. A handful of (mostly Democrat) senators expressed concern at a recent hearing, but 17 (mostly Republican) state governors have called on the FCC to grant approval.
Sure, the public comments on the FCC’s Web site appear to lean against the merger, but AT&T has been quite adept at rounding up big support from all corners of the tech world. Microsoft, Facebook, Qualcomm, and RIM joined four other technology giants (PDF) to offer support as have venture capitalist bigwigs Kleiner, Perkins, Caufield & Byers (PDF). AT&T even has labor unions like the Communications Workers of America (PDF), the AFL-CIO (PDF) , and the Teamsters (PDF) on its side. Their support surprised me at first, but it makes sense given AT&T’s more unionized workforce (T-Mobile has resisted efforts by call center employees to unionize). Perhaps that outweighs any potential job losses if the two companies consolidate.
Support from everywhere
Yet, of all the merger proponents, the most surprising are several advocacy groups who don’t normally have an opinion on corporate mergers. As CNET contributor Don Reisinger reported two weeks ago, both the NAACP and the League of United Latin American Citizens (LULAC) are for the merger. What’s more, a brief search of the FCC comment database shows that the Gay & Lesbian Alliance Against Defamation (GLAAD), the Japanese Americans Citizens League (JACL), and the Sierra Club are lending their staunch support as well. Granted, that’s just a sampling, but it proves that AT&T has a lot of power in its corner. How some of these groups got there, however, is an important question.
Statements and letters of support (all letters are in PDF format)
LULAC statement
GLAAD letter
JACL letter
Sierra Club letter
The organizations mention various points in their FCC letters, from AT&T’s high scores on diversity and philanthropy initiatives to its pro-union polices. Yet, all of the groups say that the merger will speed 4G LTE deployment, which, in turn, will help empower unrepresented communities. GLAAD offered a concise summery in its letter: “As representatives of communities that historically have felt the sting of discrimination, we are acutely sensitive when certain segments of our nation are not able to participate fully in something that the majority takes for granted,” wrote President Jarrett Barrios and President and Co-Founder Justin Nelson. “The LGBT community has a longstanding commitment to all forms of social justice. That is why we look at the deployment of faster wireless Internet options not only from financial and technological viewpoints but also in terms of how this improves society.”
Likewise, the JACL predicts that the acquisition will “help connect low-income subscribers to broadband’s many benefits,” while the NAACP argues it will “advance increased access to affordable and sustainable wireless broadband services and in turn stimulate job creation and civic engagement throughout our country.” The Sierra Club, of course, took a more environmental approach while throwing in 4G as well. “This is an important step toward expanding broadband to rural areas and building sustainable communities,” wrote Executive Director Michale Brune. “Expansion of broadband technologies to rural America brings a vital 21st century infrastructure to all our communities and will conserve energy by eliminating carbon emission related to travel and promote other efficiencies through smart grids and smart meters accessed through broadband.”
All are nice sentiments, to be sure, but when you really get into the letters, most of them read much like the executive summary of AT&T’s original FCC filing. When it’s not claiming that acquiring T-Mobile’s spectrum is the only possible path to LTE expansion, AT&T spent much of that document extolling that 4G will “empower consumers, workers, and small businesses to participate more fully in our nation’s broadband society.” Both points I saw over and over again in the FCC letters, which makes you wonder where the groups are getting their information. Not only do they overlook the fact that T-Mobile has aggressively expanded its HSPA+ network, but also there’s legitimate debate over whether AT&T’s spectrum claims are really true.
What’s behind it?
A more cynical take is that the organizations are playing smart politics. As Politico’s Eliza Krigman wrote on Friday, AT&T contributions to GLAAD and the NAACP have led some critics to charge that the groups are just trading favors. Granted, the contributions are an interesting data point, but I’m sure that money isn’t the only factor here. GLAAD spokesman Rich Ferraro wouldn’t comment further, but he sent me a June 3 statement from GLAAD that commended AT&T’s pro-union policies and denied any connection to the donations (an NAACP spokesman offered a similar statement to Politico). I asked for more details from the Sierra Club, but I haven’t heard back at the time of this writing.
By all means these organization have a right to an opinion. The marriage between AT&T and T-Mobile will, after all, will create the nation’s largest carrier and affect wireless data prices whether AT&T admits it or not. Yet, I find it curious that an organization like GLAAD, which is normally concerned with ensuring that lesbian, gay, bisexual, and transgender people are represented fairly in the media (and a group that I’ve supported in the past), is suddenly concerned with 4G deployment. It’s free to support or oppose the merger, but I wish it had better reasons for doing so.
Correction on Wednesday, June 15 at 3:15 p.m. PT: This story originally reported that the Computer & Communications Industry Association was supporting the merger. In fact, the CCIA is against the deal.
Update on Saturday, June 18 at 4:45 p.m. PT: Politico reported today that GLAAD President Jarrett Barrios has resigned.
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CCIA
West Virgina Farm Bureau
Public Regulation Commission of New Mexico
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