AT&T caught in brazen 4G lie about expanded service following failed merger with T-Mobile

NEW YORK - AT&T on Wednesday announced a plan to cover 96 percent of the U.S. population with 4G-LTE service by the end of 2014. That's great news for customers -- but it reveals that AT&T told regulators a pretty big whopper last year while fighting for its doomed T-Mobile merger.

One of the deal's fiercest battle points was 4G access outside major cities. Without T-Mobile, AT&T said it was "very unlikely" that it would expand 4G-LTE service beyond the 80 percent coverage threshold it already planned to reach by 2013.

"In some of these [less-populous] areas, AT&T simply lacks the spectrum necessary to deploy LTE," the company told the Federal Communications Commission in a written defense of its proposal.

The FCC called AT&T's bluff. It released a damning report on the scuttled merger saying it believed AT&T would expand its 4G deployment with or without T-Mobile.

AT&T hit the roof, complaining that the FCC's analysis directly contradicted AT&T's "documents and sworn declarations." It got particularly irate about the FCC's prediction -- "based purely on speculation" -- that AT&T would eventually expand its LTE deployment to 97 percent of the population even if it didn't get T-Mobile.

Fast-forward 11 months. AT&T says that its $14 billion network investment will allow its 4G service to cover 300 million Americans, the overwhelming majority of the U.S. population.

"They painted the stakes as dire as possible when they were trying to buy T-Mobile, but the fact is AT&T had to match its competitors in 4G market roll-outs," said Ken Rehben, an analyst at Yankee Group.

Former AT&T executive Josh King is even more blunt.

"That poor-mouth 80 percent statement was about as credible as AT&T's claim that the merger would create 96,000 jobs," said King, who left AT&T Wireless in 2005 and now heads business development at Avvo, a legal and medical directory site.

AT&T insists that it wasn't being disingenuous with the regulators. Things changed, the company says, pointing to the 40 new spectrum deals it signed over the past year. The FCC recently made available some spectrum that wasn't on the table when AT&T was negotiating its T-Mobile takeover.

"We chartered a new path," AT&T spokeswoman Roberta Thomson told CNNMoney on Wednesday.

That's precisely what the FCC -- and industry analysts -- believed would happen.

"A decision not to say 'yes' at a particular moment is not the same as saying 'no' forever," the FCC said in its report last year. "The record does not support AT&T's claim that ... future consideration of an expanded LTE deployment was a 'slim possibility.'"

Didn't AT&T know all along that it would have to beef up its network?

"I am choosing my words carefully here," said Charles Golvin, an industry analyst with Forrester Research. "The simple answer is yes, I believe that AT&T's strategy has always been to expand LTE coverage to as much of the market as possible."

The FCC held off on taking a victory lap. It released a statement on Wednesday praising AT&T's expansion plans, calling them "proof positive that the climate for investment and innovation in the U.S. communications sector is healthy. "

NewsChannel5 reached out to the northeast Ohio representative for AT&T, who said the expansion announced Wednesday will greatly benefit Ohioans.

"Today's announcement is a critical step to bringing state-of-the-art communications technology to consumers and business owners in Ohio," said Tom Pelto, President, AT&T Ohio. "Working alongside our state and local officials, the immeasurable benefits of our ongoing investments will provide the infrastructure needed to propel the state forward for years to come."

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