MMTC Endorses AT&T/T-Mobile Merger in Amicus Filing to FCC

MMTC Endorses AT&T/T-Mobile Merger in Amicus Filing to FCC

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For the first time in its 25 year history, the Minority Media and Telecommunications Council (MMTC) today announced its endorsement of a merger — the proposed combination of AT&T and T-Mobile USA.

“MMTC has been a vocal opponent of consolidation in the media and telecommunications industries,” said David Honig, president and executive director of MMTC, on a press call to discuss the organization’s rationale for supporting this deal.  “A transaction may be compelling to shareholders or have an attractive economic rationale, but transactions that shrink a sector usually come at the expense of communities of color.”

In this case, however, after evaluating the facts before it, MMTC, like several other respected progressive organizations — including the National Association for the Advancement of Colored People, the AFL-CIO, Communications Workers of America, League of United Latin American Citizens and the Sierra Club — rendered its support in favor of the merger, by filing Amicus Curiae comments before the Federal Communications Commission.

Honig based MMTC’s rationale for support on three primary factors, namely, the merger can benefit:

  1. minority consumers, by alleviating the spectrum crunch and narrowing the digital divide;
  2. minority telecom workers, by extending AT&T’s diversity in hiring practices and neutrality toward unionization; and
  3. minority broadband entrepreneurs, because AT&T is an industry leader in procurement.

Honig also cited as support for MMTC’s position the profound importance of connecting minorities to the Internet, and the goals held by President Barack Obama, Congress, the FCC, and others to ensure that next-generation (4G) mobile broadband networks be universally deployed across the nation to promote “continued economic prosperity and to individual empowerment.”

According to Honig, “The proposed merger would help solve the spectrum crunch by putting this scarce resource to the most efficient and consumer welfare-enhancing uses.”  He went further to note that:

In the absence of such a solution to the spectrum crunch, carriers may begin to raise prices in order to suppress demand for advanced services. This would have to be done in order to prevent against network outages resulting from too much traffic riding over networks that are built on spectrum that’s unable to keep up with the demand for data. Such a scenario would present a considerable danger to minority communities because affordability remains a key impediment to minorities’ adoption and use of broadband owing to the deep and persistent racial wealth gap and to deep racial disparities in income and unemployment status.

The priority MMTC assigns to this merger as bearing the potential to curtail the spectrum crisis cannot be understated.  As explained in the Amicus:

In a democratic society, the nation simply cannot afford to guess wrong and see the digital divide widen — especially at a time when minorities are poised to become the nation’s majority.  In today’s digital age, access to high-speed Internet is no longer a luxury — it is a necessary predicate of first-class citizenship, and thus it is a fundamental right for all Americans.  By easing capacity constraints, the merger will help avert the spectrum crunch — especially in very large majority-minority markets — and thus alleviate the pressures that could drive prices up, drive down minority adoption, and widen the digital divide.  In this way, the merger would buy the nation the time it needs to implement a long-term cure for the spectrum crunch through such mechanisms as spectrum incentive auctions and repurposing of some government spectrum.

For years, MMTC has said that universal broadband adoption and use should be the nation’s highest broadband policy priority.  When Politic365 asked Honig why this is and how that plays into the FCC’s evaluation of this merger, he said that during our nation’s previous transition from an agricultural society to an industrial one, people of color were unable to reap the benefits of economic, social and political opportunities because of structural discrimination, lack of educational opportunities and government neglect.

Now, as we transition from an industrial to a digital society, he said, “there is still a 20-point gap between whites and African Americans and whites and Hispanics in home broadband adoption, and half that gap is attributable to race and class.” Noting that this is an endemic issue and is something that the FCC must take into serious consideration, Honig said, “We can’t afford to lose this one bright spot that we have — which is wireless — because of a lack of spectrum.”

This, according to Honig, was the most important factor for MMTC in supporting the merger.  “We need something,” he said, “that is going to serve as a stopgap on spectrum demand until we can get spectrum auctions in place.”

5 COMMENTS

  1. This is a very interesting look at the merger – many are opposing it based on the idea of downsizing the marketplace, but MMTC is showing a very different point of view. I never would have thought of this! The spectrum issue is a big one, and this could definitely be a way help to resolve it without driving prices up.

    MMTC advocates for minorities, but we shouldn't forget that this merger is something that will affect EVERYONE – no one wants to pay more for their cell service (I personally pay over $100 per MONTH, and that is ridiculous!)

    Really hoping this merger, if it goes through, will help avert price increases in the future.

    Thanks for the different perspective!

  2. Mergers are part of business. If a large telecom company wants to sell the unfortunate truth is that there are only a few companies who can afford to buy it. However, the government can impose merger conditions on AT&T.

    These conditions should center on increasing diversity and competition in telecom, including providing more opportunities for minority and women owned businesses participation in the industry, and closing the digital divide. As numerous sources have repeatedly noted, closing the digital divide will require significant public and private investment – this is an ideal setting to further these goals.

  3. MMTC's insights shows an opportunity in which we, as a nation, can make huge gains in how we all interact. It provides for a rare opportunity to directly impact rural and urban communities in a way like never before. Given the importance of broad band access in today's society, it is essential that we encourage such bold moves, while keeping a watchful eye to ensure they come to pass, as we would expect. I'm thankful for the wisdom, of MMTC and the many other Civil Rights Organizations, who have taken the time to think in a much more broad sense, and see that this is not merely about dollars and cents, but about our very way of living and who will be included in all aspects of society.

  4. Sounds like a great opportunity for minority companies in the telecom supply/service chain. I also hope the diverse corporate culture is continued as AT&T picks up T-Mobile employees.

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