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Competition would increase
Competition would increase

The claim: AT&T said that its merger would increase competition, since regional carriers like MetroPCS and Leap Wireless would add subscribers, essentially filling the void left by T-Mobile. AT&T also says that merging with T-Mobile would not limit competition for its own customers, since the companies don't actually compete.

The response: The FCC said that its analysis of data provided by the wireless carriers suggests that AT&T and T-Mobile are, in fact, competitors. Many AT&T customers switch to T-Mobile and vice versa, viewing one another as a clear second choice.

The companies themselves also acknowledge that by launching ad campaigns directly targeted at one another, the FCC said. Most recently, T-Mobile launched a campaign earlier this year that portrays AT&T's network as a burden to customers.

"Our review of the evidence indicates that T-Mobile is a substitute for AT&T," the FCC said in its report.

That's not the case for small, fringe carriers, the regulator argued.

"We are skeptical of the applicants' position that the regional providers -- firms with considerably less spectrum, much smaller footprints ... -- would and could expand and compete effectively in the space now occupied by T-Mobile."

By David Goldman @CNNMoneyTech - Last updated December 01 2011: 6:07 AM ET
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The Federal Communications Commission on Tuesday blasted AT&T, accusing the telecom giant of lying about the benefits of its proposed merger with T-Mobile.