More Industry Regulation Could Result from AT&T Acquisition of T-Mobile

More Industry Regulation Could Result from AT&T Acquisition of T-Mobile

9/1/2011

 

More regulation for the telecommunications industry could result from the pursuit of AT&T Inc. of a U.S. government approval for its planned purchase of T-Mobile USA Inc.

According to Carl Howe, an analyst at the Boston-based research firm Yankee Group, if the Justice Department and the Federal Communications Commission signs off on the deal, they may oblige AT&T and Verizon Wireless to keep prices from increasing.

A report from the Yankee Group also pointed out the possibility of regulators forming a new mobile service provider by uniting smaller competitors or requiring a merged AT&T-T-Mobile to sell a portion of its customer base to another mobile virtual network operator like TracFone Wireless Inc. or Tru.

In an interview, Howe, the co-author of the report, said, “Once you have a monopoly, you have pricing power, you need rules. Without more regulation, your choice is lawlessness.”

During the Fortune Brainstorm Tech conference in Aspen, Colorado last month, Verizon’s chief executive officer, Lowell McAdam, said that the possibility of a stricter FCC oversight is one of the most important concerns for the company.

For the part of Michael Balmoris, the spokesman for At&T, he said, “The wireless marketplace is intensely competitive today, and it will remain competitive after this merger. More regulation would be unwarranted, unwise and unproductive.”

Gina Talamona, a spokeswoman of the Justice Department for the antitrust division, on the other hand, said that the investigation is ongoing, while spokesman for FCC, Mark Wigrield, declined to comment.

WRITTEN BY:

blakeh@wellsdrew.com