In June, more than 52,000 ColorOfChange members spoke out against a proposed merger between AT&T and T-Mobile, arguing that the deal is likely to destroy jobs, raise the price of cellular service, and threaten net neutrality for wireless high-speed Internet.
Now, there's one more reason to oppose the merger -- and AT&T gave it to us. The company has repeatedly claimed that merging with T-Mobile is the only way it would make good business sense to cover 97 percent of Americans with the latest mobile broadband technology.
But according to a letter filed by AT&T, the cost of building its 4G wireless system to the entire nation is $3.8 billion -- a mere one tenth the cost of the $39 billion merger! And if the merger isn't approved, AT&T will be obligated to pay T-Mobile a $3 billion fee, more than 75 percent of the cost of extending 4G coverage to 97 percent of Americans.
This new revelation makes clear that AT&T's major public interest rationale for merging with T-Mobile amounts to nothing more than fuzzy math. But Democratic 76 members of Congress, led by North Carolina Rep. G.K. Butterfield, have signed a letter advancing AT&T's false rationale.
In response, we've launched a campaign calling on these members to withdraw their support for the deal. Here's the message we sent to ColorOfChange members on Wednesday. We hope you'll consider signing the petition and spreading the word to your friends and family.
There’s just one problem with AT&T’s claim that buying T-Mobile is the only way it would be able to give 97% of Americans access to its high-speed mobile network: it isn’t true, and a letter filed recently by AT&T proves it.1
Seventy-six House Democrats wrote a public letter supporting the merger, largely based on the argument that purchasing T-Mobile was necessary in order for AT&T to expand its high-speed mobile Internet service to underserved communities.2 We now know that argument is false.
If history is any guide, the other claim made in the letter for supporting the merger — that the merger would protect jobs — is false as well, and what's most likely is that the reduction in competition that would result would raise the cost of wireless services for everybody and harm Internet freedom.3↓ Story continues below ↓
Join us in demanding that these members of Congress publicly renounce their support for the merger. Together we can expose AT&T's lies and make it impossible to justify approving this dangerous merger. It takes just a moment of your time:
In June, Congressman G.K. Butterfield of North Carolina worked with Congressman Gene Green of Texas to organize Democratic support for AT&T's merger with T-Mobile. The resulting letter to the Federal Communications Commission and Department of Justice — the two federal agencies responsible for approving or rejecting the acquisition — argues that the merger would benefit the public for two reasons: 1) it would enable AT&T to expand high-speed wireless Internet to low-income and rural customers, and 2) the required build-out would result in new jobs.4
Thanks to a letter filed by AT&T's attorneys that contained confidential information, we now know with certainty that AT&T could easily upgrade its wireless networks without buying T-Mobile — it has simply chosen not to do so.
The letter pegs the price of covering 97% of Americans with advanced 4G LTE wireless service at $3.8 billion, less than one tenth the cost of the $39 billion merger.5
And as we've stated before, the merger is likely to be bad for consumers. The merger wouldn't just allow AT&T to raise prices on its customers — every wireless carrier would be subject to fewer competitive pressures to keep prices low.6 If that happens, more poor people, Black Americans, and Latinos — who disproportionately rely on wireless broadband to access the Internet — would be subject to higher prices and undue economic hardship just to get online. There are also major implications for Internet freedom. Without competition from other wireless carriers or effective regulation by the FCC, AT&T and Verizon — net neutrality opponents who would together control nearly 80% of the wireless market — would have an unacceptable level of control over what we can and can't access on the mobile web.7
The 76 members of Congress who signed Rep. Butterfield's letter now have an opportunity to correct the record. With the letter's rationale for supporting the merger undermined, these representatives should publicly walk back their support for the merger.
Please join us in calling on them to do exactly that. Your action won't only protect consumers and the open Internet — together, we'll make it more likely that members of Congress take pause before supporting corporate positions that could harm our communities.
Thanks and Peace,
-- Rashad, James, Gabriel, William, Dani, Matt, Natasha and the rest of the ColorOfChange.org team
August 24, 2011
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1. "Leaked AT&T Letter Demolishes Case For T-Mobile Merger Lawyer Accidentally Decimates AT&T's #1 Talking Point," DSLReports.com, 8-12-2011
2. "71 AT&T-Funded Democrats Endorse Merger," The Bilerico Project, 6-28-2011
3. "Free Press Anti-Trust Letter," Free Press, 5-10-2011
4. See reference 2
5. AT&T Filing with Federal Communications Commission, 8-8-2011
6. "AT&T-T-Mobile merger will hurt wireless market, says Yankee Group", Network World, 8-17-2011
7. "The net neutrality threat of the T-Mobile merger with AT&T," The Guardian, 4-1-2011
8. See Reference 4