AT&T and T-Mobile Merger
In March of 2011, AT&T announced a $39
billion proposed merger with T-Mobile. Such a merger must be approved by
the Federal Communications Commission (FCC) and the Department of Justice.
In June, the CPUC opened an investigation to examine merger-specific
effects on competition and service in California.
Under the proposed merger, the two
companies would have had a combined total of 20 million California wireless
telephone and data customers, and over 47% of the California wireless market. In
addition, AT&T California and Verizon California Inc. would have
been left with over 77% of the California wireless telephone market, an
increase from their 65% share.
The CPUC held a series of public
hearings and workshops in July 2011.
The Department of Justice filed a civil antitrust
lawsuit on August 31, 2011 to block the proposed merger. The CPUC has suspended
the proceeding schedule as a result.
ORA's Policy Position
The proposed merger would have had serious
and deleterious effects for all consumers in California. ORA was concerned about
the potential effects of anti-competitive behavior on California consumers. ORA
noted that the CPUC was able to mitigate damages and protect
Californians in three ways:
- Adopt and enforce regulations for the terms and conditions of all
- Require commitments by AT&T as a condition of the merger, such as
requirements to build modestly-priced, wireless broadband-capable services
in unserved areas.
- Address competitive barriers by requiring local exchange carriers to
reduce special access and backhaul rates, and reducing or removing other
barriers to entry and market operations.
ORA filed Opening
Comments on July 6, 2011.
ORA filed Reply
Comments on August 30, 2011.
On July 26, 2011, ORA sent a Letter
to CPUC Executive Director Paul Clanon calling for an adjustment to the
schedule for the CPUC's investigation in order to give parties enough
time to review additional evidence.
See the proceeding docket.
See the Department of Justice press
release announcing its antitrust lawsuit to block AT&T’s acquisition