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AT&T says merger would mean more 4G for west central Minnesota

This map shows the increased coverage area through the merger. Forum graphic

FARGO, N.D. -- While critics say the deal will be bad for cell phone consumers, the proposed merger of AT&T and T-Mobile could have a big upside for rural areas.

AT&T claims the acquisition would allow it to speed the expansion of its high-speed 4G data network to cover 55 million additional U.S. residents, able to reach 97.3 percent of the nation by 2018. Without the deal, AT&T expects to expand its high-speed network to 80 percent of the population in the same timeframe.

The larger gains in next-generation data networks would mostly come from wider deployments in rural states, said Beth Canuteson, AT&T's regional vice president for external affairs in the five-state area that includes Minnesota and the Dakotas.

"It's where this merger would be especially impactful," Canuteson said.

The broader data reach the communications giant is promising would include near-blanket 4G coverage in west central Minnesota and most of the Dakotas, based on AT&T's coverage maps.

Increased efficiency in larger markets is part of the reason more resources could be devoted to rural rollouts, Canuteson said.

Getting good 4G coverage is important for businesses as users increasingly use smartphones to monitor email and the Web.

"If you're not connected that way, you're losing out," said Andy Peterson, the president and CEO of the North Dakota Chamber of Commerce.

While AT&T's build-out projections could change, the extension of high-speed data networks in hard-to-rich regions is a key part of a merger sure to face stiff federal antitrust scrutiny, as the deal would collect 45 percent of cell customers under one corporate roof.

If AT&T didn't deliver on its data expansion plans, "I think we'd have a credibility issue," Canuteson said.

Planned 4G rollouts may even end up as conditions attached to federal approval of the deal, said AT&T spokesman Tom Hopkins.

Regional AT&T officials have been visiting smaller metro areas to tout how the deal could bring data service to low-population areas, Canuteson said. In just her region, she's made that pitch in Sioux Falls, S.D., Waterloo, Iowa, Fargo and Grand Forks.

"We're doing that all over the nation," she said.

While AT&T is heralding the benefits of the merger for rural areas, there have been numerous critics who claim the deal would consolidate too much of the share of the wireless market among the two largest providers.

AT&T and Verizon would have three-quarters of all U.S. subscribers, according to Free Press, a nonprofit advocate for media reform.

Joel Kelsey, a Free Press political adviser, said there is no reason why the deal would speed rural 4G rollout, other than the higher profits AT&T may see after taking over a competitor. The lack of high-speed data in those regions is simply a business decision, he said.

"I'd actually argue the opposite is true," Kelsey said, meaning that having more carriers competing is more likely to spur development of data networks in low-density areas.

The merger will require approval from the Federal Communications Commission and the Department of Justice. By Friday, more than 4,600 comments had been submitted to the FCC. A random check of dozens of submissions found nearly unanimous opposition to the deal, typically because of concerns about reduced competition.

A decision from federal regulators is expected later this year. Though it won't directly consider the proposal, Congress is holding hearings on the merger.

The first is scheduled for today in front of the Senate Judiciary Committee's antitrust panel, which includes Minnesota's Democratic senators, Sen. Amy Klobuchar and Sen. Al Franken. Both have expressed skepticism about the T-Mobile acquisition.

Klobuchar wrote a letter to the CEOs of AT&T and T-Mobile in March, posing 10 questions in a range of topics, including possible job losses, rate hikes, competition issues and rural data coverage.

In a written statement, Franken said he fears the merger will be a "raw deal" for customers, driving up rates and reducing choice.

Canuteson said consolidation was bound to happen, as T-Mobile had been up for sale for a year.

"The competitor was going to be off the market anyway," she said. "It was just a question of where they went to."

Dave Roepke writes for the Forum of Fargo-Moorhead, which is owned by Forum Communications Co.