By Margaret Rock | Mon Apr 18, 2011 12:21 pm
Hesse said the merger would hurt others in the industry like network suppliers, app and operating system developers, and handset makers, in his speech Friday at the Commonwealth Club in San Francisco.
"Innovation and customer choice would be seriously affected if the wireless industry is allowed to become a duopoly," Hess said.
Sprint has at least one ally. Watchdog group Consumers Union has said publicly the acquisition would lead to higher prices for mobile phone subscribers. The FCC has also expressed its intention to seriously scrutinize the deal.
Others may come forward to support Sprint, but the absence of a firm opposition so far, Hesse suggested, underscores that potential power of a mega-sized AT&T.
"I think there will be a number of companies that will oppose it, but clearly there will be companies that will be concerned about opposing it because of the ramifications for their business," Hesse said.
AT&T called Hesse's remarks "off base," and said it is unsurprising that Overland Park, Kan.-based carrier would object. AT&T and Verizon would control close to 80 percent of the market if the deal is approved, leaving Sprint a distant third place.
AT&T maintains the T-Mobile purchase will help ease a spectrum shortage and spur the deployment of 4G service and would benefit both the industry and consumers. The question remains whether there could be healthy competition in the wireless environment with two prominent provides, a distant third, and a smattering of regional providers.
While Hesse continues to rally the troops, the acquisition's fate is in the hands Federal Communications Commission and the Department of Justice, which recently kicked off its review of the deal for antitrust issues.
Sprint should be heartened by the news that the New York's Attorney General has pledged to review the deal. The Senate Judiciary Committee will begin holding hearings on the matter in May, sparking speculation about who may appear before the legislative body and what their testimony will reveal.
Verizon appears to be indifferent to the deal so far, with indications that it will be watching, but won't get too distracted by the events.
Mon Apr 18, 2011 12:16 pm
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