AT&T/T-Mobile Merger Approval Rides on Telecom PR
As yesterday’s news on the proposed AT&T/T-Mobile merger plays out, media are hitting the second day lead: Will federal regulators allow this deal to go through? That depends not just on the legal briefs filed to support or oppose the merger, but on how effectively each side wages its PR campaign.
I wouldn’t call this fight a slam dunk for either.
What AT&T has going for it: Can you remember the last time that regulators didn’t approve a giant telecom merger? What AT&T has going against it: (1) A tenuous argument that the state of competition needs to be judged by individual local market; and (2) a potentially formidable list of opponents including Google, Sprint, network equipment manufacturers and others.
In opponents’ favor: Because the proposed AT&T/T-Mobile merger would combine companies in the identical business line, it can be argued that this is a horizontal merger that reduces competition — similar to the proposed MCI/Sprint deal that was denied over a decade ago. The downside for Sprint and Google: Times have changed. Om Malik speculates that the boldness of AT&T’s move signals a pre-approval “wink” from the Federal Communications Commission.
Sprint was quick to issue a statement condemning the proposed merger. It remains to be seen how doggedly AT&T will pursue its initiative in PR and social media.
Our perspective based on prior policy fights: The most aggressive side wins. During the debate over regulatory forbearance, XO Communications and competitive broadband providers beat much bigger Verizon through PR street fighting at the local and national level. Throughout most of that policy bout, Verizon played rope-a-dope — so confident of victory that they laid back and took the punches. Then XO funded research showing the negative market impact of Verizon’s bid, which Crawford pitched to the Wall Street Journal. Verizon realized its mistake too late. The cascading media effect of the resulting Journal article helped lead to a unanimous 5-0 FCC vote against the former Bell operating company.
The policy fight sparked by the proposed AT&T/T-Mobile merger will, of course, be on a very broad scale. Not just the FCC but also the U.S. Department of Justice will weigh in — and those guys at DOJ don’t wink. Expect a months-long battle.
Ladies and gentlemen, time to take off the gloves.
Jim Crawford is the president and founder of Crawford PR. In Crawford blogs, he offers hard-earned perspective on public relations for the tech and broadband industries.