AT&T and T-Mobile Merger

Background

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:

  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.

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.

Proceeding Status

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.