AT&T’s highly controversial $39 billion proposed buyout of T-Mobile USA takes center stage on the hill this week, as the carrier enters its first congressional hearing while members on both sides of the debate flesh out their strategies to sway government officials.
President and chief executive at AT&T Randall Stephenson is expected to have more than a few words with opponents of the deal who claim that the merger will not only hurt competition, but stifle innovation within the industry. Alongside Stephenson, T-Mobile chief executive Philipp Humm and Sprint chief executive Daniel Hesse are also set to testify at the Senate Judiciary Committee. Both sides of the argument will be fairly represented at Wednesday’s Capitol Hill hearing, but one party that won’t be in attendance is none other than AT&T’s largest competitor and the carrier that (at least for now) truly does “rule the air”: Verizon Wireless.
While Sprint has shown no hesitation in making its position known on the matter, Verizon, on the other hand, has yet to come out with a formal rebuttal against the deal, only tentatively mentioning that the government may use the deal to further regulate the sector. Verizon’s executive VP of public affairs Thomas Tauke told the WSJ that he fears the government could use this opportunity to pressure AT&T into agreeing to various rules or regulations that other carriers must subsequently submit to, as well. “We are concerned this is an excuse for the government to insert itself into the marketplace,” Tauke said.
The government should be the biggest concern over at Verizon, as the deal will put Verizon and AT&T on an even battlefield, while knocking out the two underdogs T-Mobile and Sprint in one foul swoop. However, Sprint will have its hands full on Wednesday, as the carrier attempts to “explain why we think this takeover of T-Mobile is bad for consumers, bad for innovation and bad for the economy,” according to a Sprint spokesman. “We see it as a job killer that could create a vertically integrated duopoly,” he said.
Since the announcement of the deal, both sides have been gearing up for a true battle. Sprint, with far less fiscal prowess than its competitors, has hired three separate lobbying firms, whereas AT&T hired two outside lobbying firms in preparation for the hearing. Nonetheless, Sprint has only spent a fraction ($583,000) of the $6.8 million AT&T has spent on lobbying.