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U.S. looks to block AT&T, T-Mobile merger (Updated)

by Mel Martin Aug 31st 2011 at 11:35AM

Both the New York Times and the Associated Press are reporting that the Justice Department is suing to halt the proposed merger of AT&T and T-Mobile, citing serious competitive issues with the US $39 billion deal.

The complaint says "AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market, thus, unless this acquisition is enjoined, customers of mobile wireless telecommunications services likely will face higher prices, less product variety and innovation, and poorer quality services due to reduced incentives to invest than would exist absent the merger."

AT&T announced its desire to merge in March, and the proposal has drawn fire from consumer groups, lawmakers, and rivals like Sprint which has been urging the government to stop the merger.

AT&T and Verizon are the sole US sources for the iPhone, but rumors have mentioned Sprint and T-Mobile as possibilities.

Update: AT&T isn't giving up. As Engadget reports, Wayne Watts, AT&T Senior Executive Vice President and General Counsel, issued the following statement:

"We are surprised and disappointed by today's action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated. We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court. At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

· Help solve our nation's spectrum exhaust situation and improve wireless service for millions.
· Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
· Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court."



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superberg@mac.com

So, will AT&T not be firing a huge chunk of T-Mo employees if this merger goes through? Otherwise, the claim of creating jobs is kind of a lie. The net effect of this merger is likely to be fewer available jobs, not more.

August 31 2011 at 9:53 PM Report abuse rate up rate down Reply
Gilad

I support the US government with this one. With whatever little competition AT&T has, the prices are already quite high. Almost complete monopoly of large companies is never a good deal for the customers.

August 31 2011 at 7:04 PM Report abuse rate up rate down Reply
Jim

"Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population"

So AT&T is providing service to 97% of the populaton after the merger? Sounds pretty anti-competitive to me!

August 31 2011 at 12:57 PM Report abuse +1 rate up rate down Reply
1 reply to Jim's comment
kenny

No. AT&T will OFFER 4G LTE service to 97% of the population. It will be AVAILABLE to 97% of the population. Not AT&T will own 97% of all LTE subscribers.

August 31 2011 at 2:03 PM Report abuse rate up rate down Reply
Thomas Fiscoe

Can someone explain to me why this merger is such a bad thing? A reason besides "AT&T sucks/is evil" would be great too.

Just because you folks are mad about throttling or lack of being able to tether for free doesn't mean this merger is a bad idea.

T-Mobile is losing subscribers lately, seems like they could use a boost from AT&T.

August 31 2011 at 12:49 PM Report abuse -1 rate up rate down Reply
5 replies to Thomas Fiscoe's comment
xxp84

Wow! It's almost like someone at the DOJ is actually awake and paying attention! Very refreshing. However, I am sure the money will win in the end. AT&T bet $6 billion on this deal because they were positive they could bribe their way to approval.

August 31 2011 at 12:14 PM Report abuse +2 rate up rate down Reply
digitalsedition

This is great news, especially in light of the recent document leaks concerning AT&T's real "need" for TMobile.

August 31 2011 at 11:45 AM Report abuse +5 rate up rate down Reply
1 reply to digitalsedition's comment
Colin Castro

source for this claim?

August 31 2011 at 2:17 PM Report abuse -1 rate up rate down Reply
1 reply to Colin Castro's comment
digitalsedition

Google Search quick reference (http://www.google.com/search?client=safari&rls=en&q=at&t%20tmobile%20merger%20leaked%20document&ie=UTF-8&oe=UTF-8#pq=at&hl=en&cp=35&gs_id=3n&xhr=t&q=at%26t+tmobile+leaked+merger+document&qe=YXQmdCB0bW9iaWxlIGxlYWtlZCBtZXJnZXIgZG9jdW1lbnQ&qesig=Yk5WWBfJDPLkqynZPwsxVw&pkc=AFgZ2tkX4UIggizzaUdPEUVL5F4jbxUHEhuLWqW8-bGK5ijWix33pZvGkxsKlbp78duuW9CCODodJbhfzeQlQGNCQDFO3FFLRw&pf=p&sclient=psy&client=safari&rls=en&source=hp&pbx=1&oq=at%26t+tmobile+leaked+merger+document&aq=f&aqi=&aql=&gs_sm=&gs_upl=&bav=on.2,or.r_gc.r_pw.r_cp.&fp=30826624ae1de6f2&biw=1024&bih=706)

August 31 2011 at 4:22 PM Report abuse rate up rate down
Howie Isaacks

The Justice Dept. can suck it. They should be focused on catching criminals, and protecting the security of this country. Nowhere in the Constitution is the authority given to the Justice Dept. to step in and try to interfere in corporate mergers. We don't need protection. We are capable of making our own choices about what services and products to purchase. I resent this kind of interference in the market place. The economy is in the toilet right now. Let businesses do what they need to do to grow and flourish.

August 31 2011 at 11:44 AM Report abuse -7 rate up rate down Reply
10 replies to Howie Isaacks's comment
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