On Thursday, the FCC opened a docket regarding AT&T’s proposed acquisition of T-Mobile. AT&T needs the approval of the FCC in order for the deal to go through. There is some controversy as to what a combined AT&T and T-Mobile would mean for the mobile phone industry in the United States. AT&T and Verizon would control an estimated 80% of the wireless market. This has led Sprint to oppose the merger. As the FCC begins its long review process, let’s examine what criteria the FCC is using to approve the deal and why AT&T feels this deal is beneficial to customers.
What The FCC Is Examining
According to the Washington Post, the FCC will run tests to make sure AT&T won’t control too much spectrum. In addition to that, the FCC is going to look at how much money other wireless providers stand to make if it were to approval the deal. Basically, the FCC doesn’t want AT&T to be so powerful, current and future competitors won’t stand a chance. Citadel Securities estimated that even if the FCC approves AT&T’s proposal, the company may have to give up a percentage of T-Mobile USA.
AT&T’s Proposed Benefits
AT&T said in a blog post that acquiring T-Mobile is the best way to solve its “capacity limitations.” AT&T says its network data traffic has increased by 8000% since 2007 and that number is expected to multiply tenfold in four years. AT&T also said T-Mobile’s spectrum could be used to further AT&T’s initiative to roll out a LTE network. This expanded network will provide rural areas in the United States with broadband speeds that urban areas tend to get first.