The hearing title was (No Joke) “Is Humpty Dumpty Being Put Back Together Again?”
Most of the major players were on hand today. AT&T – Randall Stephenson; TMobile – Phil Humm; Sprint – Dan Hesse; Cellular South – Victor Meena; along with Senators: Leahy, Kohl, Lee, Grassley, Klobuchar, Franken, and Cornyn.
Senator Lee: “Two roadblocks: regional carriers rely on large carriers for roaming access. Although the FCC mandates the larger carriers have reasonable agreements, those deals determine how they can compete. Second, regional carriers may not be able to compete for devices like the iPhone.” “Competition must be viewed as the maximization of consumer welfare. We must do what’s best for consumers.”
Dan Hesse: Took 100 years to build 1 billion landlines, 20 years to hit 5 billion wireless lines.
Dan Hesse and Victor Meena began calling AT&T and Verizon the Twin Bells. Even the senators began using the term.
Meena: “Through unfettered mergers and acquisitions, it was only a matter of time before Ma Bell came back as two sisters.”
Meena: There is no third option: either AT&T will acquire T-Mobile, paving the way for Verizon to acquire Sprint, or it will not.
Senator Klobuchar asks if AT&T customers will be able to sign up for TMobile priced plans.
Stephenson responds, “If AT&T customers wanted TMobile pricing they could have gone to TMobile.
Senator Kohl asks TMobile if they felt AT&T and TMobile were competitors.
Humm: We define ourselves as a value competitor. Asked again Humm replies, “We compete in the same market.”
Senator Kohl then asks Stephenson, “Come on Mr Stephenson, is TMobile a competitor?
Stephenson: “They’re not our competitive focus. We’re focused on Verizon Wireless…”
Senator Kohl focused on the misrepresentation by Mr Stephenson that AT&T is more of a regional carrier than a national carrier.
Senator Lee: Is it better to have many smaller companies with less spectrum?
Stephenson: All these other companies like Clearwire and MetroPCS are building LTE without having 2G and 3G networks, they’re doing a leapfrog approach. I don’t think fewer companies is better, but we’re going to have to think differently.
Lee: Do you think further market concentration is likely to result in more regulation for your industry?
Stephenson: This is such a hyper-competitive industry I don’t think that’s warranted. We have a history of what happens to pricing when there’s regulation.
Stephenson: We keep talking about 4 to 3, and 3 to 2, but we’re ignoring major competitors like MetroPCS and Leap. This is a vibrant industry.
My final thoughts:
AT&T President and CEO Randall Stephenson came into the hearing with a lot of bravado, headstrong, and seemingly unafraid of sworn oaths. Either he is a master when it comes to answering only the question at hand or he is bending the “facts” to support the very weak narrative that his company is trying to sell to the American people. In response to the questions it almost appeared as if Stephenson was trying to portray AT&T as competing market by market instead of as the number two national carrier.
TMobile President and CEO Philpp Humm towed the line that the merger is the best thing that could happen for TMobile customers. He also acknowledged that in the current situation TMobile has no chance of deploying an LTE network due to lack of spectrum or solid financial backing from Deutsche Telekom. Humm stated, “Returning T-Mobile to growth will not secure the company’s future. T-Mobile faces spectrum exhaust in a number of significant market. We also cannot launch LTE, we lack the low-band spectrum needed.” Then added, “T-Mobile’s parent, DT, is not in the position to finance additional spectrum.”
Sprint and Cellular South were strongly united in their feelings against the merger. Meena: “Cellular South pioneered things like free nights and weekends — we didn’t do these things before competition, because we didn’t have to.” Hesse: “Creating an entrenched, integrated duopoly will stifle competition… AT&T’s takeover of T-Mobile will turn back the clock on wireless innovation.” and “Beyond what the Bells would control, this acquisition would do little to provide what AT&T claims. AT&T is warehousing spectrum, while Verizon claims to have enough.”
Clearly this is just the very beginning of what could very well end up being an extremely long and messy process. Although with AT&T’s “Man in the White House”, the fight could all be a great show for consumers. Please let us know your feelings in the comments.
A HUGE Thank You to ThisIsMyNext for the liveblog