AT&T and T-Mobile Merger

Background

In March of 2011, AT&T announced a $39 billion proposed merger with T-Mobile. The deal must be approved by the Federal Communications Commission and the Department of Justice. In June, the CPUC opened an investigation to examine merger-specific effects on competition and service in California.

Under a merger, the two companies would have 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 be left with over 77% of the California wireless telephone market, an increase from their current 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.

DRA's Policy Position

The proposed merger would have serious and deleterious effects for all consumers in California. DRA is concerned about the potential effects of anti-competitive behavior on California consumers. The CPUC can mitigate damages and protect Californians in three ways:

  1. Adopt and enforce regulations for the terms and conditions of all wireless-service offerings.
  2. 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.
  3. 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.

DRA filed Opening Comments on July 6, 2011.

DRA filed Reply Comments on August 30, 2011.

On July 26, 2011, DRA 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.

Current Proceeding Status

This proceeding (I.11-06-009) will analyze what, if any, conditions related to California-specific effects of the merger may be appropriate, and whether additional CPUC action is warranted. The investigation also develops a record that may inform additional comments that the CPUC may file at the Federal Communications Commission (FCC).

The proceeding schedule has been suspended as a result of the Department of Justice antitrust lawsuit.

  • See the proceeding docket.  

Other Resources

See the Department of Justice press release announcing its antitrust lawsuit to block AT&T’s acquisition of T-Mobile.