Did Sprint Jump the Gun in Praising AT&T and T-Mobile's Failed Merger?

It might have seemed like a good idea today, but will it come back to haunt Sprint? Yesterday afternoon, the telecommunications giant released a statement regarding the abrupt death of the proposed merger between AT&T T and T-Mobile. “Earlier today, AT&T terminated its definitive merger agreement with Deutsche Telekom to acquire T-Mobile USA,” said Vonya B. McCann, senior vice president of Government Affairs for Sprint S. “This is the right decision for consumers, competition and innovation in the wireless industry. “From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T's proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer. “Sprint commends the Department of Justice, the Federal Communications Commission and the bi-partisan group of state attorneys general who gave voice to the concerns of consumers across the country. We look forward to competing fiercely in the robust, competitive market that exists today and continuing to deliver the world class service and products that consumers have come to expect from Sprint.” Sprint has previously argued that with T-Mobile under AT&T's control, both competition and innovation would be stifled. While those accusations were spot-on, these statements were obviously the words of a company that was scared of its own future. If AT&T, the number-one mobile carrier, was allowed to take control of T-Mobile, the number-four carrier, it would fulfill Sprint's fears while creating an even stronger corporation. In that sense, Verizon – the number-two player – should have been equally concerned. But Verizon is much too comfortable with its current position (and AT&T-style unlimited pricing strategy) to speak up on the matter. (Get instant alerts, earnings updates and analyst ratings on Sprint, AT&T, Verizon and more with Benzinga Pro.) On the other hand, when the FCC decided to release a 266-page analysis of the merger (in which the Federal Communications Commission concluded that the merger would create a duopoly), AT&T didn't hesitate to reply with a statement of its own: “We expected that the AT&T-T-Mobile transaction would receive careful, considered, and fair analysis,” said Jim Cicconi, AT&T Senior Executive Vice President of External & Legislative Affairs. “Unfortunately, the preliminary FCC Staff Analysis offers none of that. The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis.” Cicconi questioned whether the authors of the report were predisposed, accusing them of cherry-picking facts to support its views. “We have summarized here only a portion of the infirmities we see in the FCC's report,” Cicconi concluded, adding that AT&T encourages all observers to read the report itself. “We believe that the utter absence of balance is clear, and demonstrates that the document lacks all credibility. The decision to issue such a report that has no legal status, without a vote of the Commission, and in a proceeding that has been withdrawn, was also without precedent, and underscores that this was intended more for advocacy and to impact public perceptions. And neither is a proper basis for action by a regulatory agency. “If our economy is to recover and once again create jobs, major private-sector investment will be required. Over the past several years, no company has invested more in the United States than AT&T. In our merger with T-Mobile, we made commitments to invest additional billions—investments made possible because of the merger. We also face spectrum constraints of a nature and magnitude faced by no other carrier as we strive to provide services everyone concedes are vital. In this circumstance, we understood the issues such a combination might raise, and we made clear, publicly and privately, our readiness to address those concerns. We are still ready to do so.” Cicconi's statements came on December 1, just a little over two weeks ahead of the merger's demise. Is this the failed merger a victory for the telecommunications industry? From where I'm standing, yes. I'm not particularly happy with AT&T's dominance, especially when the company continues to raise the price of new data plans. The whole concept is absurd, and the consumer attitude toward AT&T is even crazier. When Comcast CMCSA raises its rates and/or bombards it customers with technical issues, people complain to no end. But AT&T is the golden network in the eyes of too many consumers; only those who don't use AT&T are eager to complain. Is the failed merger a victory for Sprint? Absolutely. Sprint got what it wanted. But in opening their mouths on more than one occasion, Sprint executives have now put themselves in a very difficult position if the company ever decides to merge with or buyout another carrier. While the current assumption is that this would never happen – Sprint is too small and there are too few competitors for Sprint to go this route, many would say – there is no telling what will happen in the future. If Sprint is able to continue offering an unlimited data plan, it could one day overtake Verizon VZ as the number-two mobile carrier. After that, who knows? Sprint might eye a company or two that is worth a buyout. It might even see an acquisition as an opportunity to become the industry's number-two player, since that may ultimately be the only way for Sprint to surpass Verizon. Right now, Sprint isn't concerned about that. The company is – or was – too worried about the prospects of an AT&T/T-Mobile merger to think about its own future. Follow me @LouisBedigian