Foster Campbell

Louisiana Public Service Commissioner

Telecom Merger Vote a Missed Opportunity to Improve Service

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The Louisiana Public Service Commission missed an opportunity to hold the state’s largest telecommunications company accountable for poor service when it favored AT&T’s merger with T-Mobile last month.
Over the past 12 months I’ve had 639 telecom complaints in my North Louisiana PSC district, and 593 of them – more than 90 percent – were about AT&T.
Yet the commission voted 4-1 to allow AT&T to grow even bigger with its proposed $39-billion takeover of T-Mobile. There was no investigation and no conditions were imposed.
I cannot operate on blind faith. I voted no. It is a mistake to let AT&T grow even larger when it already offers poor service in Louisiana.
AT&T has many fine people working for it. The company has a new state director, Sonia Perez, based in New Orleans. I have met Ms. Perez and she has pledged to work closely with me to solve service problems and to advance my highest telecom priority: expanding broadband service throughout rural areas of North Louisiana.
But this proposed merger is a big deal, bigger than any one person. I made that point repeatedly during the two hours of debate before the LPSC last month as I urged my fellow commissioners to investigate the merger before making a decision.
What’s the rush? I asked. Is it wise to see something this big get approved with no questions asked? AT&T’s takeover of T-Mobile creates a “duopoly” that will dramatically reduce competition in the wireless industry. A combined AT&T and T-Mobile will have 44 percent of the market and Verizon Wireless will have 35 percent, for a total of 79 percent. What impact will that have on costs to consumers? The commission was silent and attached no conditions to its approval of the deal.
In my years as a businessman and cattle farmer, I have never been so uncomfortable as when I have been approached with a deal that has to be done “now.” Those are the deals you instinctively want to reject, or at least delay until you can review them.
I expressed concern about the impact of the merger on jobs. In its lobbying campaign before the vote, AT&T noted that the Communications Workers of America favored the deal, but I am concerned that the expanded company will cut jobs, making service even worse than it is already. AT&T has publicly said it will make $40 billion in cost cuts. The acquisition of T-Mobile will eliminate stores, jobs, back offices and spending on marketing. In addition, 19 T-Mobile locations in Louisiana and an estimated 128 jobs are in jeopardy.
The merger raises issues for other wireless companies. AT&T will gain additional leverage to control roaming and the cost of carrying wireless calls on its landline system.
I was supported in my call for a review of the proposal by Sprint Nextel representative Bill Atkinson and LSU-Baton Rouge business professor Dr. Andrew Schwarz.
Atkinson, whose company is fighting the merger all over the nation, had this to say: “AT&T’s takeover of T-Mobile will reduce competition among wireless companies and harm consumers. The alleged public-interest benefits promoted by AT&T are not real; they are not backed up by the facts.”
Dr. Schwarz said Louisiana was near the bottom among states in access to high-speed Internet service, and he questioned AT&T’s promise to improve that record by taking over T-Mobile.
“We broke up Ma Bell some years ago, and now we’re letting it get back together,” he said. “That’s going to hurt competition.”
I raised other issues. Can we get a universal charger that will fit all AT&T and T-Mobile telephone handsets? Can we get a guarantee that you will speak to a live person when you call AT&T and hit “0” to get out of the automated customer-service system that so many people complain about?
As I stated earlier, my biggest telecom priority is access to high-speed Internet service. AT&T argued that taking over T-Mobile will allow the expanded company to make broadband service available over 98 percent of the territory of Louisiana. That sounds good, but the company is not promising access to hard-wired DSL (“digital subscriber line”) broadband, but “mobile” broadband over wireless devices. Are the two comparable in speed and quality of service? What about price? Dr. Schwarz testified that he has serious doubts about these issues, but the commission refused to attach any conditions or require any answers from AT&T before approving the merger.
Ironically, AT&T’s own lawyers accidentally revealed confidential information to the Federal Communications Commission in August that the company could deliver high-speed service to 97 percent of the United States for $3.8 billion – less than one-tenth of the cost of its proposed takeover of T-Mobile.
Those of us questioning this merger can direct our concerns to the FCC and the U.S. Justice Department, which are both reviewing the deal. I hope the federal agencies will seriously consider whether this proposal is good for the United States and good for Louisiana. I have my doubts.