WASHINGTON-Consumer groups today warned federal and state regulators that a merger of Cingular Wireless L.L.C. and AT&T Wireless Services Inc. would lead to excessive concentration in the local telecom access market in top U.S. markets.
“Approval of a merger between the No. 1 and No. 2 firms in a market would be highly unusual, if not unprecedented. Approval of such a merger where the resulting wireless carrier will be larger than all but one of its remaining competitors combined, and will have the many advantages of affiliation with the dominant incumbent wireline carrier seems unthinkable,” the Consumer Federation of America and Consumers Union said in a letter to the Federal Communications Commission and 10 state attorneys general.
Yesterday, FCC Chairman Michael Powell said the agency plans to vote in the next few weeks on the proposed $41 billion merger between the No. 2 and No. 3 mobile-phone carriers. Cingular Wireless is 60-percent owned by SBC Communications Inc. and 40-percent by BellSouth Corp.
“In our review of the top 50 markets, we find 32 that are in the BellSouth and SBC service territories,” the consumer groups stated. “Although market shares may change slightly over time . we find that in 18 of these, the merger represents a dramatic increase in concentration.”
Cingular Wireless and AT&T Wireless want to complete the merger, which would create a new No. 1 mobile carrier surpassing Verizon Wireless, before the end of the year.
The FCC and Justice Department, despite some objections, are expected to approve the merger subject to certain conditions. The proposed merger is supported by organized labor, disability and public-safety advocates, and others.
