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Should AT&T Merge with T-Mobile?

June 22, 2011

ALBANY, N.Y. - The planned merger of AT&T and T-Mobile is generating more concern, as New York joins two other states in urging caution.

The combined companies would become the largest wireless carrier in the United States and leave three companies controlling 80 percent of the market.

In a filing with the Federal Communications Commission (FCC), New York's Public Service Commission (PSC) has asked the government to "carefully evaluate" whether it will harm the public interest by stifling competition. PSC spokesman Jim Denn explains his agency's action.

"There would be fewer competitors providing wireless service in New York state, and that is a significant concern on the part of the commission."

Less competition could lead to higher rates or a lack of incentive to improve wireless broadband service, which lags behind that of other nations. New York plays no formal role in the merger approval process, although Attorney General Eric Schneiderman has an investigation under way, as do officials in California and Louisiana.

Amalia Deloney, grassroots policy director for a watchdog group, the Center for Media Justice, says she has no doubt that one outcome of the merger would be higher rates.

"Not only will the prices for T-Mobile customers go up on average somewhere between $30 and $50 a month, but the ability for AT&T to set a price point that's well beyond what people can afford is completely possible."

People of color will be significantly impacted by merger-related rate hikes, Deloney says, because so much of the filling out of forms and applications that make up the process of democracy and much of daily life these days is done online.

"Both blacks and Latinos - I think it's about 16 percent of English-speaking Latinos and 18 percent of African-Americans - access the Internet exclusively through wireless devices. So obviously, this is something that's really huge."

New York's PSC also urged the FCC to allow additional opportunities for review and comment.

"The Public Service Commission wants to ensure that, if the merger is accepted, necessary protections are put into place to ensure that consumers in New York are rightfully protected."

Monday was the final day documents concerning the merger could be received by the FCC. Observers don't expect the government's decision to be announced before year's end.

Mark Scheerer, Public News Service - NY