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FCC Petitioned to Block AT&T Wireless, Cingular Merger

Tuesday, May 4, 2004
Chris Murray, 202-462-6262

Consumer Groups Petition FCC to Block AT&T Wireless, Cingular Merger Citing Massive Consolidation Problems

Petition Says Merger Will Lead to Higher Prices, Diminished Service

(Washington, D.C.) — Consumers Union and Consumer Federation of America filed a petition to block the AT&T Wireless/Cingular merger, citing anticipated higher prices and diminished quality of service in the wireless market from consolidating the nation’s second and third largest cell phone companies.
“This merger proposes an unacceptable level of concentration at the national level, clearly in violation of the merger guidelines,” states the petition filed Monday with the Federal Communications Commission, which will determine the merger outcome. “But the anti-competitive effects this merger will have on local markets is of even greater concern.”
“Cingular and AT&T Wireless are the second and third largest carriers nationally, but in many local markets where Cingular’s parent companies are the monopoly landline telephone providers, these companies are the number one and number two players — a combination that proper anti-trust scrutiny would surely block,” the petition said.
Cingular Wireless is owned by two of the largest Bell local telephone companies in SBC Communications and Bell South. Allowing Cingular and AT&T Wireless to merge points to a dangerous consolidation trend that ultimately could lead to higher prices and poorer service for cell phone customers, the groups warned, as fewer competitors offer service to local customers.
“The Commission can easily find adequate grounds for rejecting this merger using traditional competitive guidelines, both under antitrust standards and the FCC?s public interest standard,” the petition states. “However, should the Commission fail to do so–the net result would be a massive consolidation in the wireless market leading to higher prices and diminished quality of service.”
Read the full petition to deny the Cingular/AT&T Wireless merger (PDF).