The AT&T and T-Mobile acquisition proceeding may be hitting a snag for the two major U.S. carriers. Senator Herb Kohl has just issued a stern letter warning against the acquisition, saying that it could cause “substantial harm” to competition and consumers. Senator Kohl also happens to be the chairman of the Senate’s antitrust committee.
News of AT&T’s decision to purchase T-Mobile for $39 billion first broke in March and has since stirred strong opposition from at least one competing carrier and stoked consumer concerns on price hikes. AT&T’s first official pitch to the FCC argued that the acquisition was necessary to support the rapid growth in data demands and would ultimately benefit consumers with better coverage and a more reliable network.
Competing carriers have argued that AT&T’s inability to keep up with data demands lies in AT&T’s poor strategy and lousy management of its data networks, and that the T-Mobile acquisition is simply a lazy solution to catch up with rivals. Others oppose of the deal citing potential harm to customers, leading to fewer choices and more costly service plans. Kohl seems to echo the same sentiment:
“I have concluded that this acquisition, if permitted to proceed, would likely cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies.”
However, this is no guarantee that the deal won’t go through. It’s speculated that the acquisition could still succeed if certain conditions are negotiated.