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7/27/2011
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Sen. Al Franken Opposes AT&T, T-Mobile Merger

Outspoken senator from Minnesota says deal would kill off thousands of U.S. jobs and raise cell phone prices.

Opponents and proponents of AT&T's $39 billion acquisition of T-Mobile have not been shy about making their opinions heard. Senator Al Franken, the Saturday Night Live alum, recently sent a letter to the Federal Communications Commission asking that it stop the deal in its tracks.

"The competitive effects of a merger of this size and scope will reverberate throughout the telecommunications sector for decades to come and will affect consumer prices, customer service, innovation, competition in handsets and the quality and quantity of network coverage. These threats are too large and too irrevocable to be prevented or alleviated by conditions," wrote Franken.

If the FCC and the U.S. Department of Justice allow the deal to proceed, the combined entity would become the largest U.S. mobile network operator by a wide margin, with approximately 130 million subscribers. Verizon would be a distant second with about 100 million. The two companies together would control 80% of the U.S. wireless market, and Sprint and its 60 million customers would be far behind the leaders.

"I urge you to compel AT&T to publicly release its plans for job cuts in the first, second, and third years following the merger approval," wrote Franken. "Many proponents of this merger have acknowledged that short-term job losses may occur, but I think it is important for the American public to understand exactly what those numbers will be, especially given the weak state of the U.S. job market."

Sprint has opposed the merger from day one. In fact, AT&T recently submitted new material to the FCC in an attempt to justify the acquisition and Sprint took the opportunity to shoot down AT&T's logic.

"AT&T's 'do-over' submission is a last-ditch attempt to distract regulators, politicians, and consumers from the fact that it has failed to provide any evidence that its proposed takeover of T-Mobile yields meaningful benefits," said Sprint. "Its latest model, clearly constructed with predetermined results in mind, does nothing to change the negative consequences of the takeover for consumers in the form of higher prices, reduced innovation, and decreased investment. The facts do not justify allowing that to happen, and we believe the ongoing investigations by the Department of Justice, the Federal Communications Commission, and 11 state attorneys general and various state regulatory commissions will reach the same conclusions."

The merger has even caught the attention of a satirist, who put together a series of Web videos that poke fun at the merger (see below).

Despite all the opposition, AT&T is still confident the merger will go through.

"While we respect Senator Franken, his analysis of our pending transaction is just wrong," Tom Sugrue, T-Mobile senior VP of government affairs, said in a statement.

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