State regulators on Wednesday voted 4-1 “not to oppose” the $39 billion merger of AT&T Inc. and T-Mobile USA Inc., which would create the nation’s largest cellphone company.
The five-member Louisiana Public Service Commission said they have limited authority over wireless phones, but believe the move would lead to improved service and to 98 percent of the state having cellphone coverage within six years.
PSC Chairman Jimmy Field, of Baton Rouge, said the commission regulates hard-wire telephones but is limited to only “terms and conditions” of wireless phones, which amounts to a “fairly nebulous” jurisdiction for cellphones.
But the commissioners would leverage what authority they do have to ensure AT&T makes the investments necessary to expand coverage and improve service in Louisiana, Field said.
If approved by the Federal Communications Commission, called FCC, the merged company would make AT&T the nation’s largest wireless carrier with roughly 118 million customers - about 43 percent of the cellphone market.
Verizon Wireless would be the second-largest company. About 80 percent of the nation’s cellphone users would contract with one or the other company.
“The resulting market dominance would dwarf Sprint and the remaining carriers,” said William R. Atkinson, senior counsel for regulatory affairs, for Sprint Nextel, which would be the third largest.
Atkinson asked PSC members not to approve the merger.
Louisiana is one of five states that sought to review the merger being considered by the FCC. The other 45 states chose not to get involved.
“I hate to see something this big zooming through here without asking any questions,” said PSC Commissioner Foster Campbell, of Bossier Parish.
Campbell said 593 of the 639 complaints involving phone service that his office received during the past year were about AT&T.
“The service can’t get worse,” Campbell said.
Campbell was the sole vote against approving the merger. He asked his fellow commissioners to slow down and hold hearings and collect information and opinions. Obtaining written promises from AT&T to invest more in Louisiana is easier to get when the company wants something, Campbell said.
“It’s good common horse sense,” he said.
Many of the problems in Louisiana, such as dropped calls, are caused because the demand for the service has increased so fast that existing infrastructure has trouble handling the volume of calls, said Edward H. Bergin, a New Orleans lawyer representing AT&T.
“The biggest, quickest single thing you can do is approve this merger,” Bergin said. The merger would speed up innovation and help the company expand into small towns and rural areas, he said.
AT&T is planning to spend $6 billion to $8 billion over the six years after final approval of the merger to install equipment that would expand coverage across the nation, Bergin said.
PSC Commissioner Eric Skrmetta, of Metairie, asked if voting to approve the merger would give Louisiana any greater preference when the company decides where the infrastructure investment would be made, which he said some AT&T officials had told him.
“It puts Louisiana in light of being a business-friendly state,” replied Debbie Canale, the executive director for regulation for AT&T Louisiana.
Skrmetta said he wanted to know how much money would be spent, plus where and when it would be spent. “It’s not just going to lay out there in wonderland,” Skrmetta said.