In documents filed with the FCC on Monday, AT&T outlined the new models it is using to justify its proposed acquisition of T-Mobile USA. The models, according to AT&T, prove that the $39 billion transaction “will result in lower marginal costs of output and higher quality levels.” Last week, the FCC’s Wireless Telecommunications Bureau stopped the agency’s informal 180-day merger review “shot clock” upon learning of the new models that AT&T is using to support its proposed merger with T-Mobile USA. In Monday’s filing, AT&T told the FCC that, “to provide additional support for the synergies that will result from this transaction, the Applicants conducted further, more detailed analysis of the likely output and price effects of the proposed transaction.” That analysis, continued AT&T, confirms conclusions that were reached by University of Chicago economics professor Dennis Carlton and reported in earlier submissions to the FCC. Among other things, Carlson’s study assessed “the likely impact of the proposed transaction on output and quality-adjusted price.” That study, in turn, was based on AT&T’s analysis of the marginal cost of additional output for AT&T and T-Mobile USA as standalone entities and as a combined entity in 15 sample markets. For each of the markets studied, AT&T said its further assessment confirms “that industry output will rise and average price adjusted for quality will fall as a result of the transaction.” Sprint Nextel senior vice president Vonya McCann countered that AT&T’s filing “does nothing to change the negative consequences of the takeover for consumers in the form of higher prices, reduced innovation and decreased investment.” Meanwhile, on Tuesday, Senator Al Franken (D-MN), the chairman of the Senate Privacy, Technology and the Law subcommittee, followed the lead of Senate Antitrust Subcommittee Chairman Herb Kohl (D-WI) in urging the FCC and Justice Department (DOJ) to block the deal in a 24-page letter to the FCC and the DOJ. Warning that, “the competitive effects of a merger of this size and scope . . . will affect consumer prices, customer service, innovation, competition in handsets, and the quality and quantity of network coverage,” Franken asserted “these threats are too large and too irrevocable to be prevented or alleviated by conditions.” Citing endorsements received from 26 state governors, 77 House Democrats, 72 mayors and “much of the high tech community,” AT&T senior executive vice president Jim Cicconi replied: “it is very clear that the few opposing voices are far outweighed by the enormous depth and breadth of support we are seeing.”