Letter to Randall Stephenson, CEO, President, and Chairman, AT&T Inc. and Philipp Humm, CEO and President, T-Mobile USA

Letter

Klobuchar Presses AT&T, T-Mobile on Consumer Issues
Senator calls on the heads of AT&T, T-Mobile to address adverse impacts of a possible merger before Senate hearings

U.S. Senator Amy Klobuchar wrote a letter to the CEOs of AT&T and T-Mobile today, asking the companies to respond to concerns that their impending merger will lead to fewer choices, higher prices, and reduced services for their customers. If AT&T's purchase of T-Mobile is approved, AT&T and Verizon would control approximately 75 percent of the entire wireless market, creating a duopoly. Klobuchar noted in her letter that major wireless providers have resisted her efforts to adopt meaningful pro-consumer measures in the industry -- arguing instead that competition among providers would lead to consumer reforms -- and expressed concern that increased consolidation will diminish the possibility that the industry will act on its own to institute pro-consumer practices.

"Wireless phones are increasingly becoming the sole means of telephone communication in this country, so it's vital that competition in that industry remain robust," Klobuchar said. "AT&T and T-Mobile ought to be forthright and transparent with their customers about the potential effects the merger might have on prices and the quality of service."

Klobuchar is the only senator who serves on both the Judiciary and Commerce Committees, which oversee the Department of Justice and the Federal Communications Commission, respectively. In March, she wrote to both agencies and urged them to take a close, hard look at the proposed merger to ensure that consumers are provided adequate choice in the wireless market.

The full copy of the letter to AT&T and T-Mobile follows:

May 6, 2011

Randall Stephenson
CEO, President, and Chairman
AT&T Inc.
208 South Akard Street
Dallas, TX 75202

Philipp Humm
CEO and President
T-Mobile USA
12920 SE 38th Street
Bellevue, WA 98006

Dear Mr. Stephenson and Mr. Humm:

I write to you today about AT&T's announcement of its intention to purchase T-Mobile. I remain concerned that the merger will lead to fewer choices, higher prices, and reduced services for wireless consumers.

As you know, the major wireless providers have resisted my efforts to adopt meaningful pro-consumer measures in the industry, arguing instead that competition among providers would inevitably yield consumer reforms. If AT&T's purchase is approved, however, AT&T and Verizon would control approximately 75 percent of the entire wireless market -- effectively creating a duopoly and diminishing the possibility that the industry will act on its own to institute pro-consumer practices.

As required, both the Department of Justice and the Federal Communications Commission will be reviewing the proposed acquisition. I have previously written both Assistant Attorney General Varney and Chairman Genachowski requesting that they take a close, hard look at this proposed deal to ensure that consumers are provided with adequate choice in the wireless market. As the only Senator on both the Judiciary and Commerce Committees, which oversee the Department of Justice and FCC, I want to make sure that these agencies do just that. To that end, and to better understand the effects of this proposed deal, please answer the following questions by providing as much specificity as possible:

1.How will you ensure that the proposed transaction will not lead to higher prices for consumers?

2.What impact will decreased competition in the wireless industry have on practices that impact consumers such as cell phone exclusivity, early termination fees, and bill shock?

3.Will AT&T commit to continuing to sell T-Mobile's lower-priced plans after the merger to all T-Mobile and AT&T customers?

4.Will the acquisition of T-Mobile enable AT&T to reach rural parts of the country that AT&T could not reach if it simply entered into data roaming agreements with T-Mobile or other wireless carriers?

5.Will AT&T support device interoperability and ensure that devices built to work on AT&T's future Long-Term Evolution (LTE) networks are usable on the LTE networks of other carriers?

6.AT&T and Verizon will control 75 percent of the wireless market. Given this concentration, can the wireless market be competitive? If yes, can you articulate any specific level of concentration that would render the wireless market no longer competitive?

7.Will AT&T allow existing T-Mobile customers to switch providers without penalty if they do not want service from AT&T?

8.Will AT&T offer smaller carriers data roaming agreements at reasonable rates?

9.Will AT&T commit to forego any handset exclusivity agreements with cell phone manufacturers?

10.What impact would a potential merger have on T-Mobile employees and will the combined company commit to maintain current employment levels?
Thank you for your prompt attention to this matter.

Sincerely,

Amy Klobuchar
United States Senator

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