Federal regulators and Congress aren't the only government entities preparing to have a closer look at AT&T's proposed $39 billion acquisition of T-Mobile. New York Attorney General Eric Schneiderman Tuesday announced his office would also be undertaking a "thorough review" of the planned merger that would leave AT&T and Verizon Wireless with nearly 80% of the wireless market.
The New York AG plans to analyze the merger for potential anti-competitive impact on consumers and businesses across New York State.
"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," said Schneiderman, in a statement. "Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future. We want to ensure all New Yorkers benefit from these important innovations that improve lives."
The statement noted T-Mobile is a low-cost provider of choice for millions of New Yorkers and that the merger could have an impact especially in areas like Rochester, Albany, Buffalo and Syracuse, where there are already fewer wireless options.
Against the anti-competitive risks, Schneiderman said he'll also consider potential benefits of the merger, such as expanding the coverage of AT&T's next-generation broadband wireless network to rural areas in upstate New York that are underserved and have poor wired broadband connectivity.
Schneiderman's announcement comes a day after Sprint formally voiced its opposition to the deal, arguing it would harm consumers and competition in the wireless industry. The No. 3 carrier vowed to fight the deal's approval.
At the federal level, the U.S. Department of Justice and the Federal Communications Commission are expected to take at least a year to review the proposed merger, and committees in both houses of Congress plan to hold hearings on the transaction.
At the same time, AT&T's planned acquisition of T-Mobile was already getting a vote of confidence on Wall Street, where AT&T's stock rose 2.4% to $30.05 Tuesday. Telecom stocks gained broadly on the prospect of further consolidation in the wireless industry that would bring greater efficiency to operators. The stock surge, however, didn't include Sprint, whose stock fell 3.4% to $4.62.