Sprint hatchets AT&T's new T-Mobile economic analysis as 'do-over'

AT&T's (NYSE:T) proposed $39 billion acquisition of T-Mobile USA will lead to lower prices "adjusted for quality," AT&T said in a new filing to the FCC that is aimed at bolstering its case that the deal should be approved.

The filing is based on new economic analysis of the potential impacts of the deal, and the FCC has halted its 180-day review "shot clock" so that it can analyze the data and allow third parties to comment. AT&T said that the deal "will relieve significant capacity restraints faced by both companies and lead to improved service quality," according to a letter AT&T submitted to the FCC accompanying the filing.

According to the letter, the new economic analysis focused on "the likely output and price effects of the proposed transaction, focusing on the extent to which the efficiencies of the proposed transaction will result in lower marginal costs of output and higher quality levels." The filing itself, which looks at the deal's potential impact on 15 U.S. markets, including Los Angeles, New York and Washington, D.C., will be confidential and filed under seal. The letter has some parts redacted. Representatives from AT&T and the FCC did not immediately respond to requests for comment.

"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," AT&T and T-Mobile parent Deutsche Telekom said in the letter.

Sprint Nextel (NYSE:S), the most outspoken critic of the deal, blasted AT&T's new filing as an attempt to "distract regulators."

"AT&T's 'do-over' submission is a last-ditch attempt  to distract regulators, politicians and consumers from the fact that it has failed to provide any evidence that its proposed takeover of T-Mobile yields meaningful benefits," Vonya McCann, Sprint's senior vice president of government affairs, said in a statement. (Vonya McCann is also one of FierceWireless' most influential women in wireless.) "Its latest model, clearly constructed with predetermined results in mind, does nothing to change the negative consequences of the takeover for consumers in the form of higher prices, reduced innovation and decreased investment." McCann said that Sprint continues to believe the FCC and Department of Justice will not approve the deal.

For more:
- see this AT&T letter (PDF)
- see this Bloomberg article
- see this National Journal article

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