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Consumer groups have formally petitioned the Federal Communications Commission to block Cingular Wireless LLC’s $41 billion acquisition of AT&T Wireless Services Inc., saying the deal would boost prices and lower quality of service. “This merger proposes an unacceptable level of concentration at the national level, clearly in violation of the merger guidelines,” the Consumer Federation of America and Consumers Union said in a joint filing that was made public on Tuesday. The petition was one of three the FCC received by Monday’s deadline for groups and businesses to formally oppose the merger. Their filing kicks off what is likely to be an eight-month war of words between the companies and activists over the effects of the wireless telecom merger. Mark Cooper, research director at Consumer Federation of America, said in the filing that the deal hurts consumers because it would reduce the number of phone and broadband providers. Less competition results in higher prices, he said. In many local markets Cingular and AT&T Wireless are the largest and second-largest cell phone providers, which shows they already have market power, Cooper said. Consumers have even fewer options in markets where Cingular’s corporate parents, BellSouth Corp. and SBC Communications Inc., offer landline service, he said. The filing also disputes the claim by Cingular and AT&T Wireless that the deal would reduce the number of national cell-phone companies from six carriers to five. “A closer look shows that this set of competitors is almost never present in even the largest 100 markets,” Cooper said. That means at best the merger would leave four players in most big cities and far fewer in smaller markets. Besides the activists, Thrifty Call Inc., a defunct Bell company rival in San Marcos, Texas, also petitioned the FCC to block the deal. It said Cingular would have roughly 39 percent of U.S. wireless subscribers if the deal were approved. That level of concentration will result in “anticompetitive incentives and opportunities” for Cingular, the group charged. The FCC is expected to complete its review in early 2005. Telecom observers expect regulators to approve the deal, though they may require the companies to divest assets in some markets. �Copyright 2004, The Deal, LLC. All rights reserved.

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