T-Mobile Merger: AT&T's 'Rural America' Motives Questioned

By Josh Long Comments

AT&T has repeatedly described one of the main benefits of its $39 billion acquisition of T-Mobile USA: providing 4G coverage to rural America.

But a document that was accidentally posted onto the Federal Communications Commission’s website reveals the telecommunications company could have spent just a fraction of the purchase price if serving rural America were its main goal.

AT&T indicated that it would have cost $3.8 billion in extra capital expenditures to cover 55 million Americans in rural parts of the country, Apple Insider reported, citing a story that Wireless Week broke after seeing the document.

The Wireless Week report has raised questions over whether AT&T’s talking point in support of the merger – that the deal will enable it to provide 4G coverage to more than 97 percent of the U.S. population – is at least somewhat disingenuous.

“We now know the truth: AT&T is willing to pay a $39 billion premium for one reason and one reason only – to kill off the competition," said Aaron Craig, President CEO of Free Press, the nonprofit organization working to reform the media. “It would cost AT&T one-tenth of the merger’s cost to expand its network than to buy up T-Mobile."

AT&T, however, has told media outlets that the information contained in the partially redacted – and now unavailable – filing is consistent with its prior statements.

Ultimately, the FCC and U.S. Department of Justice must decide whether to approve the deal, and what, if any, conditions to impose.

The merger would eliminate the fourth-largest U.S. wireless operator and make AT&T the biggest wireless provider with more than 132 million customers, based on second-quarter results.

T-Mobile USA has been struggling with subscriber losses, but AT&T critics contend the deal will reduce choice and drive up prices while enabling just two wireless operators – AT&T and Verizon Wireless – to control 80 percent of the U.S. wireless market.

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