Sprint Nextel CEO Dan Hesse has testified before members of the Senate Judiciary Committee, Subcommittee on Antitrust, Competition Policy and Consumer Rights, voicing opposition to the proposed takeover of T-Mobile USA by AT&T. In his testimony, Hesse argued that the takeover will create a duopoly, "twin Bells" which will together control around 80 percent of revenues in the mobile industry. The new market giant would have "significant, unchecked leverage" to increase prices for consumers for voice and data. The new group would control most of the nation's fixed infrastructure and Last Mile Access. This would give it the ability to raise costs for competitors, reduce their network quality and quash competitive alternatives. Hesse noted that the takeover deal would also affect choice, saying that next-generation smartphone and tablet manufacturers would be discouraged from partnering with any company other than AT&T or Verizon because of their massive scale, limiting choice to consumers and opportunity for manufacturers. Meanwhile, content and application developers would lack incentive to create content for companies other than the Twin Bells, diminishing innovation and harming developers as well as the capital markets that fund them. Hesse disputed AT&T's claims relating to spectrum constraints and rural reach. AT&T has been warehousing its largest, most desirable spectrum holdings rather than deploying them to solve its customer needs, Hesse said, also arguing that T-Mobile's congested spectrum will not give AT&T the relief it claims to need.
