CPUC to investigate AT&T, T-Mo merger

The California Public Utilities Commission is going to study whether AT&T Mobility’s (T) proposed $39 billion acquisition of T-Mobile USA Inc. (DTEGY) is good for California residents and business. The agency noted that the combined company would serve 47% of the California market, with 20 million customers and that Verizon Wireless (VZ) and AT&T affiliates would control 77% of the California wireless market if the merger is completed, up from the 65% they control today.
The commission said it plans to analyze any conditions that would mitigate any California-specific effects of the merger, and whether the CPUC will need to take any further action. The CPUC plans to share its information with the Federal Communications Commission as well. States vary on how strictly they regulate telecommunications, although the CPUC has butted heads with AT&T before. AT&T in 2007 agreed to pay more than $30 million and withdraw a U.S. Supreme Court challenge to end a highly controversial, seven-year-old case at the California Public Utilities Commission over early termination fees. The CPUC found that AT&T asset Cingular Wireless L.L.C., was charging early-termination fees without disclosing network coverage issues.
“We recognize that the wireless market is dynamic and growing, having gained more than 100 million customers since 2002. Yet, the potential for greater wireless market concentration, and specifically, a greater potential concentration in California than nationally, prompts us to gather facts and receive comments,” said Commissioner Catherine J.K. Sandoval. “Our examination will address a number of issues, including what is the relevant market, will the proposed merger maintain or improve the quality of service, whether T-Mobile’s lower-priced plans would continue to be available to customers, and whether the proposed merger, overall, is in the public interest.”
The commission said it plans to hold workshops and public participation meetings in July in several of T-Mobile’s service areas and expects to conclude its investigation in October.