The following is in response to comments made today by FCC Chairman Julius Genachowski at the International CTIA Wireless Show. It can be attributed to Jim Cicconi, AT&T Senior Executive Vice President, External and Legislative Affairs.
“The need for more spectrum is an industry-wide issue and problem. The merger AT&T proposed last year was all about creating more capacity by combining the spectrum holdings and networks of two companies. The FCC was within its rights to withhold its approval. But it is incorrect when it denies the impact such decisions have on the price of wireless services.
“Basic economics, and the law of supply and demand, apply to the wireless industry as to all others. In the case of wireless, without additional capacity, which would have been created by our transaction, prices rise. This simple point was made last week by AT&T’s Chairman.
“Last year, when Chairman Genachowski spoke at the CTIA convention he made essentially the same point, saying,
‘If we do nothing in the face of the looming spectrum crunch, many consumers will face higher prices—as the market is forced to respond to supply and demand….’