Congressional Hearings Planned for AT&T/T-Mobile Merger

A key issue for legislators will be whether consumer rates will spike after the market loses T-Mobile as a competitor, telecom industry lobbyists said. Unlike the vertical Comcast-NBCU deal, the wireless merger is “obviously horizontal,” said a former Hill staffer. It’s also a “very aggressive” move that has made Sprint unhappy, the official added. However, while the deal certainly will generate a lot of talk on the Hill, “meaningful action” from legislators is unlikely, said another telecom industry lobbyist.

A larger consequence could be the delay or undermining of other telecom issues on the Hill, telecom industry lobbyists and analysts said. Debate in the House Commerce Committee over reversing the FCC on net neutrality already has delayed discussion of many telecom issues. “It seems likely that deal-related activity will add another modest hurdle to spectrum and privacy legislation,” said MF Global analyst Paul Gallant. The deal could knock the wind out of spectrum-repurposing proposals, because AT&T appears to be solving its own impending spectrum crunch, a telecom industry lobbyist said. “If you're a member of Congress trying to size up legislation, this deal will at least make you ask more questions about the need for action, and it may even cause you to back up and say, let’s wait and see where we are as a nation after the [merger] receives final approval."

The Senate Antitrust Subcommittee plans a hearing on the merger “in the next month or two,” depending on the committee’s schedule, a spokeswoman for subcommittee Chairman Herb Kohl, D-Wis., told us Monday. The subcommittee “will take a close look at what this loss of competition will mean for people who increasingly rely on wireless phone service to connect to friends, family and the Internet,” Kohl said Sunday. Full Committee Ranking Member Chuck Grassley, R-Iowa, said the Department of Justice “needs to carefully scrutinize the merger to ensure that the more than 90 percent of Americans who own cell phones are not harmed by having fewer provider choices.” Choices “spur competition, innovation, and lower prices, and it’s imperative that this choice remains in place for the consumer,” he said.

The House Judiciary Committee also plans a hearing, said Chairman Lamar Smith, R-Texas. “The proposed AT&T and T-Mobile merger raises important questions about competition in the telecom industry and the effect on American consumers,” Smith said. “Congress must take a close look at the plan to ensure that the proposed merger promotes a healthy and competitive telecommunications market."

Chairmen of the House and Senate Commerce committees haven’t announced hearings yet, though Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., promised to take a hard look at the deal. Senate Commerce won’t schedule a hearing until the companies file merger papers with regulators, said a Senate staffer. House Commerce Committee Chairman Fred Upton, R-Mich., didn’t respond to a request for comment. But several Democrats in the committee urged hearings. The merger announcement came during a “constituent work week” in which many Capitol Hill lawmakers were traveling.

"The proposed acquisition of T-Mobile by AT&T raises questions about wireless competition, spectrum policy, and the potential impact on consumers,” House Commerce Committee Ranking Member Henry Waxman, D-Calif., said Monday in a written statement. “I am reserving judgment until I learn more about this transaction, but I will urge the [FCC] and [DoJ] to conduct a rigorous assessment.” House Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., said oversight hearings are “essential.”