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Franken Takes Aim at AT&T/T-Mobile

Sen. Al Franken (D-Minn.), one of the strongest media consolidation critics in Congress, has asked the FCC and Justice to reject the AT&T/T-Mobile merger as not in the public interest and a route to higher prices and less competition. That came the same day AT&T submitted additional evidence of what it said was the merger's public interest benefits of lower prices and higher capacity.

AT&T has proposed buying T-Mobile from parent Deutsche Telekom for $39 billion.

Franken says the deal will likely cost thousands of jobs and drive up prices for wireless customers. AT&T has said it did not expect the deal would result in job losses.

But the deal has union support, notably the Communications Workers of America, which says it will be good for workers and consumers.

In a lengthy (24 pages) letter, Franken said the merger would be a "major step toward an entrenched duopoly" and would make Sprint an acquisition target. Sprint is a big opponent of the deal, having also asked the FCC to deny it. In Hill hearings on the deal. Spring CEO Dan Hesse said he might be forced to sell out to Verizon or AT&T if the deal went few, raising the specter of further consolidation in front of Democratic Senators, including Franken, already concerned about decreased wireless competition.

"The transaction is not in the public interest," he said, urging the agencies to deny the application in order to protect wireless competition.

Franken's came the same day that AT&T submitted new evidence to the FCC it says supports its previous arguments that the deal relieves capacity constraints, lower costs, and higher quality service.

According to AT&T, its new economic models show that "In each market, the merger simulations project that industry output will rise and average price adjusted for quality will fall as a result of the transaction."

The FCC has stopped the clock on its review of the merger until it can vet those new models and evidence, including putting them out for public comment.

AT&T submitted them confidentially and under seal, so it will be up to the FCC to make copies public in redacted form.