AT&T Says More Competition Will Lead to Higher Prices
In the world in which Randall Stephenson, the CEO of AT&T Inc., resides, increasing competition leads to higher prices. He suggested that the blocking of the company's proposed $39 billion purchase of T-Mobile USA Inc. by federal regulators will lead to higher prices.
Mr. Stephenson's reasoning is that AT&T's capacity is constrained without T-Mobile. He believes that Congress has a misinformed regulatory policy when it comes to wireless carriers.
The Federal Communications Commission (FCC) struck first in a report last month that AT&T failed to show the public benefits of the proposed purchased of T-Mobile. The FCC went further and said that the purchase of T-Mobile would cause significant job losses and that AT&T would probably build high-speed wireless Internet connections without the merger with T-Mobile.
The purchase of T-Mobile would combine the second and fourth largest U.S. wireless carriers. The FCC permitted AT&T to withdraw its application to purchase T-Mobile. By withdrawing its application, AT&T is leaving open the option of filing with the Commission with a revised deal in the future.
In August, the Department of Justice sued AT&T to block the merger as anti-competitive, and a court date is pending in federal court in February.