AT&T seeks to increase wireless broadband with T-Mobile buy

AT&T is looking to expand its mobile broadband and wireless service in New Mexico, among other places, though the U.S. Department of Justice has sued to block the company's acquisition of T-Mobile. According to information from the Justice Department, the proposed $39 billion transaction would result in "higher prices, poorer quality services, fewer choices and fewer innovative products for millions of American consumers." The department filed an anti-trust lawsuit in federal District Court Aug. 31 to block the sale. The Department of Justice argues that consumers, including those in rural areas and with low incomes, would suffer if the merger isn't blocked. "Mobile wireless telecommunications services play a critical role in the way Americans live and work, with more than 300 million feature phones, smart phones, data cards, tablets and other mobile wireless devices in service today," a department release states. "Four nationwide providers of these services - AT&T, T-Mobile, Sprint and Verizon - account for more than 90 percent of mobile wireless connections." The Justice Department also argues that T-Mobile, according to information from that company, "has been responsible for a number of significant 'firsts' in the U.S. mobile wireless industry, including the first handset using the Android operating system, Blackberry wireless email" and others. However, AT&T Services President of Arizona and New Mexico Jerry Fuentes said in a Sept. 1 interview with The Taos News that the market after the T-Mobile acquisition "will still be hugely competitive." He said prices are declining despite mergers, such as AT&T's $2.35 billion acquisition of Alltel markets last year, and the state of New Mexico is poised to benefit more than others if the T-Mobile sale is allowed to proceed. AT&T announced its intention to acquire T-Mobile in March, according to information from AT&T, with the deal creating "significant consumer benefits," including: Expanded 4G service to more than 97 percent of the U.S. population Jobs resulting from an additional $8 billion in private infrastructure investment Better mobile broadband access in rural communities, as well as voice and data service improvements However, the Justice Department claims it gave "serious consideration to the efficiencies that the merging parties claim would result from the transaction." "The department concluded AT&T had not demonstrated that the proposed transaction promised any efficiencies that would be sufficient to outweigh the transaction's substantial adverse impact on competition and consumers," a department release states. "Moreover, the department said that AT&T could obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor." Fuentes said AT&T is seeking to keep up with consumers' demands for data service, and 4G service "eats up more spectrum." "We're having a capacity issue," he said. He said T-Mobile towers are largely compatible with AT&T's, so the transition would be completed relatively quickly, though he said AT&T is precluded from talking to T-Mobile until the merger is complete. Fuentes said the Federal Communications Commission must still approve the merger. If it is approved, he said it will take time, three to seven years to reach AT&T's 4G goals.