AT&T merger with T-Mobile: CON: AT&T deal would decrease competition
Special to the Appeal
New technology continuously advances our telecommunications industry. As a member of the Nevada Public Utilities Commission, I presided over implementation of the 1996 Telecommunications Act – the first major overhaul of U.S. telecommunications law in 62 years. Later, as Nevada’s Consumer Advocate, my office attempted to restrain basic rates in urban areas and to improve access to Internet services in rural Nevada.
It is clear that wireless innovations have dramatically improved the quality of life for Nevada consumers. It has also allowed Nevada’s small businesses to both better compete with and collaborate with national and international firms. Robust competition among wireless carriers within the state is essential to protect consumers from unreasonable rates and limited choices. T-Mobile currently is a lower-cost alternative for many consumers.
The proposed merger of AT&T and T-Mobile currently being examined by federal regulators has the potential to alter the wireless industry as we know it, and Nevada could be left standing impaired on the sidelines if the consolidation is approved. (I should disclose that while I hold shares in AT&T, I oppose this $39 billion transaction as a matter of public policy.)
The U.S. Department of Justice recently filed suit to block the merger, and seven state attorneys general – from both political parties – have now joined DOJ in that lawsuit. Their concern is that merging the second- and fourth-largest wireless carriers will decrease competition (obviously), hurt consumers, eliminate jobs and result in fewer innovative products.
For example, the California Public Utilities Commission is conducting an exhaustive review of the proposed merger and has organized public hearings and workshops to give this potentially game-changing transaction the attention it demands.
Nevada should join the pending DOJ proceeding in order to have a seat at the table to determine whether the merger would subject Nevada’s consumers to increased costs and limited access to mobile providers.
Although the merger would have dramatic national implications from this market consolidation, the first question to be addressed is the long-term impact of the merger on Nevada consumers. Nevada’s rural and regional carriers could be particularly at risk, limiting consumer choice and increasing costs. It is also critical to examine the amount of underutilized spectrum AT&T already controls within our borders. As it stands, AT&T has excess capacity to expand its coverage into our rural communities, but has generally deployed its investment capital elsewhere.
Market consolidation impairs both cost competition and innovation. A recent study, for example, found the U.S. now ranks 27th in average Internet connection speeds (and we did pioneer the Internet). Apart from Asian nations – South Korea retains the top spot – those countries now in the top 10 in connection speeds include Bulgaria, Lithuania and Latvia.
A high-speed wireless infrastructure will be enhanced by competition, and will be essential to the success of our state’s and the nation’s small businesses and consumers.
After reviewing the AT&T filings, it is clear to me that the risks to Nevada consumers from a merger of this magnitude and complexity could be substantial, and there is little basis upon which to find benefits to Nevada from the transaction. By joining with the other states concerned by the potential impact on their consumers, Nevada can better protect our consumers. We should not leave it to other states and federal regulators alone to decide what is best for Nevadans.
• Timothy Hay is a former commissioner of the Nevada Public Utilities Commission and former president of the National Association of State Utility Consumer Advocates.