US lawmaker has concerns over mobile megamerger

* Walden concerned about competition in wireless market

* Walden says will be very critical of FCC’s review

* Says spectrum issues will not be stalled by merger

By Jasmin Melvin

WASHINGTON, April 1 (Reuters) – A U.S. lawmaker with
oversight of technology expressed concern that AT&T Inc’s (T.N: Quote, Profile, Research)
plans to take over T-Mobile USA would stifle innovation in the
wireless market.

Representative Greg Walden, chairman of the House
subcommittee on communications and technology, said he did not
want to see a merger diminish the vibrant and competitive
nature of wireless.

AT&T’s $39 billion bid to buy Deutsche Telekom AG’s
(DTEGn.DE: Quote, Profile, Research) T-Mobile USA would concentrate 80 percent of U.S.
wireless contract customers in just two companies —
AT&T/T-Mobile and Verizon Wireless, a joint venture of Verizon
Communications (VZ.N: Quote, Profile, Research) and Vodafone Group Plc (VOD.L: Quote, Profile, Research).

AT&T, currently the No. 2 U.S. mobile carrier behind
Verizon, has said the merger will spur innovation and economic
growth by improving quality and expanding wireless service to
95 percent of Americans.

But Walden expressed concern about eliminating a national
carrier.

“It seems to me if there are fewer and fewer players in a
market, there’s less and less opportunity for that creative
innovation and invention that has occurred so far in the
wireless market,” he said at an event sponsored by news service
Politico Pro.

The merger needs the approval of the U.S. Federal
Communications Commission and the Justice Department and the
process is expected to take at least a year.

Walden has no direct input into those reviews but his
subcommittee has oversight of the FCC, and he did not rule out
hearings on the merger proposal.

He said his panel would be very critical of the FCC’s
merger review process, checking for potential abuses of power.

Walden criticized agencies that use their authority over
mergers to “extort policy changes.”

Congress may have to step in, Walden said, with tighter
definitions on agencies’ authority over mergers.

“The FCC needs to look in the mirror on this one because
we’re going to come at them very strongly, very forcefully,” he
added.

SPECTRUM

AT&T could face a tough battle at the FCC.

FCC Commissioner Michael Copps said at the onset of the
Comcast-NBCU merger that it would be a tough sell. That
transaction won a majority of the FCC members’ approval, but
Copps voted against it. [ID:nN18241655]

He said in an interview this week for C-SPAN television’s
“The Communicators,” that AT&T’s proposal “may be an even
steeper climb” and that the deal “sucks the oxygen” out of
other issues before the FCC, especially spectrum reform.
[ID:nN31263085]

But Walden said this was not a concern for him. “I think
we’re all fairly capable of multi-tasking, and a lot of work
goes on even if a hearing isn’t announced or scheduled,” he
said.

The FCC wants Congress to grant it authority to hold
incentive auctions that would compensate broadcasters for
giving up some of their spectrum to wireless companies.

The agency also wants lawmakers to consent to giving a
highly sought after chunk of U.S. airwaves known as the D Block
to public safety groups to build out a nationwide mobile
broadband network for emergency services.

Walden, a former broadcaster, said he hoped a bipartisan
consensus could be reached as spectrum reform is likely to
drive innovation, but he was wary of acting too quickly.

“We’re going to have a series of hearings to get all these
issues out in the open. We’re not going to cram something
through,” he said.
(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)

US lawmaker has concerns over mobile megamerger