It’s no secret that Sprint, the nation’s third largest mobile service provider, opposes AT&T’s proposed $39 billion takeover of T-Mobile. Sprint CEO Dan Hesse testified before Congress earlier this month that the deal could do “irreparable harm” to consumers by creating a “1980s-style duopoly” in which two giants, AT&T and Verizon, would dominate the market.

Now, Sprint has formally registered its objections with the Federal Communications Commission, which is scrutinizing the deal along with the Justice Department.

In a 377-page Petition to Deny (.pdf) filed Tuesday, Sprint warned that the deal, which would create the largest mobile provider in country, would “stunt investment and innovation” and result in “less choice for consumers and higher prices.”

Hours after Sprint made its filing, AT&T struck back, accusing its competitor of “confusing the public interest with their own particular corporate interest.”

The arguments against the deal are familiar. In addition to Sprint, several consumer groups have loudly protested the proposed deal. At the Senate hearing, Gigi Sohn, president of Public Knowledge, a Washington public-interest group that opposes the deal, went so far as to produce a Wall Street–era Gordon Gecko–styleMotorola DynaTac 8000X in order to evoke the bleak future critics say lies ahead if the deal is approved.

In short, critics argue that reducing the number of nationwide mobile providers from four to three would put too much market power in the hands of AT&T and Verizon, which would control 80 percent of the market. This market power could be used to raise prices for consumers or muscle out smaller competitors, especially regional carriers.

The deal is so bad, Sprint and other critics argue, that even if regulators applied conditions or required AT&T to give up certain assets, the merger would still be unacceptable.

In particular, Sprint attacked AT&T’s claim that it needs T-Mobile to expand its network capacity in order to provide better service for its customers.

“Like any other carrier, AT&T can invest in new cell sites and network technologies to maximize efficient use of its spectrum to meet consumer demand for its services,” Sprint said in the filing. “AT&T has made the business decision not to do so. That decision may mean higher dividends for its investors, but it also has resulted in the worst customer-satisfaction ratings among all major wireless carriers.”

“In effect, AT&T is seeking a bailout for problems of its own making, with the cost of the bailout paid by consumers in terms of higher prices, less innovation and poor service,” Sprint added.

For its part, AT&T dismissed Sprint’s criticism. In a blog post, AT&T public policy chief Jim Cicconi described opposition to the deal as “unsurprising, underwhelming and unpersuasive.”

“Even if combined with those few groups who routinely oppose every merger, this opposition pales in comparison with the scale of public-interest support we are already starting to see … and which we have every reason to feel will continue to grow,” Cicconi wrote.

Cicconi characterized public support for the merger as, “perhaps the broadest, deepest range of public-interest support ever filed at the FCC in support of any transaction.”

Cicconi listed supporters including the AFL-CIO, NAACP, Microsoft, the National Grange, the Cattlemen’s Association, state chapters of the Farm Bureau, and the Rural Health Association.

But critics of the deal aren’t backing down.

“A combined AT&T, along with Verizon, would control nearly 80 percent of the wireless market, with free reign [sic] to squash competitors and limit consumer choice,” said a statement from Craig Aaron, CEO of Free Press, a public-interest group opposed to the deal. “It would be like [sic] if ExxonMobile merged with BP, Shell, Chevron-Texaco and Citgo, and then forced you to sign a contract to buy only Exxon’s gas for the next two years.”

Tuesday was the deadline for comments in the proceeding, FCC 11-65. The deadline for “reply comments” is June 20.

Image: John Abell/Wired.com

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