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Consumer Groups, Politicians Weigh In On AT&T, T-Mobile Merger

CALIFORNIA WATCH

As federal and state agencies consider whether the proposed merger between AT&T and T-Mobile will be good for consumers and the economy, the companies and various consumer groups are waging a public battle to get their viewpoints front and center.

An Aug. 9 letter [PDF] to the Federal Communications Commission from the California-based consumer group Consumer Watchdog warns that the deal “will without question lead to higher prices for consumers.”  

Describing it as a “lesson of history,” the group told the FCC that it has seen promises from AT&T before, citing the deal between AT&T’s wireless group and Cingular Wireless seven years ago.

Consumer Watchdog said promises made during that transaction, such as improved network coverage and service quality, didn’t hold true and there’s no reason to believe similar promises will hold true for the T-Mobile deal. 

The group told the FCC that “T-Mobile customers who are forced to migrate to AT&T’s network will have to buy new phones, agree to more expensive rate plans, or cancel their contracts and pay a termination fee.” 

But AT&T was quick to fire back. Spokeswoman Margaret Boles told PCWorld that the letter “is riddled with distortions and factual inaccuracies." She told the magazine that T-Mobile customers won’t have to upgrade their phones.

And San Francisco-based spokesman Lane Kasselman told California Watch, “T-Mobile customers will be able to keep their existing contracts as long as they’d like.”

What’s more, the company insists what’s good for AT&T is good for the economy. “This merger will unleash billions in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy,” Kasselman wrote in an e-mail.

Clearly, some public officials are convinced.

Last week, AT&T released a list of more than 100 mayors from across the country who support the merger. Among them is Sacramento Mayor Kevin Johnson, who wrote a letter to the FCC arguing in favor of the merger, saying the deal “will help (Sacramento’s) small businesses and (the city’s) growing tech sector stay competitive." In response to questions from California Watch, Johnson added that he also wants to ensure schools also have “access to this digital infrastructure."

The supporting mayors on the AT&T list come from Alabama, Arizona, Florida, Georgia, Louisiana, Minnesota, Missouri, and a few other states. But so far, how many mayors from California are supporting the merger?

Johnson is the only one.