July 28th, 2011

Franken: AT&T, T-Mobile Merger Threatens Net Neutrality

Online Media Daily

A merger between AT&T and T-Mobile could “undermine” Net neutrality, Sen. Al Franken warns in a letter to the Federal Communications Commission and U.S. Department of Justice.

Franken, who is asking the government to block the proposed $39 billion merger, says the deal would create an effective duopoly with AT&T and Verizon controlling a combined 82% of the wireless market. The result is that consumers would be left with fewer alternatives if their wireless carriers start discriminating against competitors, he says.

“As a result of the limited regulation of Net neutrality in the wireless market, consumers are extremely dependent on competitive market forces to provide an open network,” Franken (D-Minn.) argues in a 24-page letter opposing the merger.

The FCC late last year voted to require broadband carriers to follow open Internet rules, but imposed less stringent requirements on wireless carriers than wireline providers. The FCC’s neutrality order bans all broadband providers—wireline and wireless—from blocking or degrading sites or applications. But the order only prohibits wireline providers from engaging in “unreasonable discrimination,” which can include giving certain types of content preferential, fast-lane treatment. Wireless providers appear free to create fast lanes for companies that pay extra.

“The FCC has opted to apply only very limited Net neutrality rules to mobile devices,” Franken writes. “One of the primary reasons why the FCC found it unnecessary to apply the broader set of protections to wireless broadband is that ‘consumers have more choices for mobile broadband than for fixed (particularly fixed wire line) broadband.’”

He adds that AT&T and Verizon historically lobbied against neutrality rules, and that Verizon filed suit in an attempt to block them. That lawsuit was dismissed as premature, but observers expect Verizon and other providers to sue again as soon as the rules are published in the Federal Register.

“After a merger, AT&T and Verizon will have less incentive to cater to consumers, and we can expect that they will make more blatant attempts to monitor and discriminate against certain content, Web sites, or applications in order to further their own financial interests,” Franken notes.

The senator argues that allowing the merger to go through will result in price hikes, job losses and diminished innovation. “T-Mobile has consistently remained competitive by innovating. T-Mobile was the first provider to offer the BlackBerry, the Sidekick and the Android operating system,” he writes.

T-Mobile’s Tom Sugrue, senior vice president of government affairs, stated that Franken’s analysis “is just wrong. ... We are confident that a thorough review of the record will demonstrate the transaction advances the public interest.”

Read more: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=154844

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