Uncle Sam says no to AT&T eating up T-Mobile: The Department of Justice has filed an antitrust suit against AT&T, Bloomberg reports. Things just got real.
The US says "AT&T's elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market." Yep, pretty much. AT&T's efforts just got a hell of a lot harder—the DoJ doesn't take kindly to monopolistic encroachment, and when the crosshairs are up, they're rarely lowered.
We're happy to see the feds sticking up for our freedom of choice as consumers—something we don't see often enough, even if they're threatening a network apocalypse if the deal fails. Nobody's going to be coerced into a merger that screws everyone but AT&T shareholders. [Bloomberg]
Update: AT&T's stock is currently down over 4 percent.
Update 2: The WSJ points out Sprint's stock is currently up over 9% after the news. This'll fluctuate all day, but no matter what, the antitrust complaint is good news for Sprint—who's been fighting the merger tooth and nail, on the national, state and local levels—and those who own its stock.
Update 3: You can read the DoJ's statement in its entirety here. A salient chunk:
"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Deputy Attorney General James M. Cole. "Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."
Update 4: AT&T hasn't commented yet on the news today, although CEO Randall Stephenson did take the opportunity today to use 5,000 US jobs as a bargaining chip, in a move as cynical as it is misleading:
"At a time when many Americans are struggling and our economy faces significant challenges, we're pleased that the T-Mobile merger allows us to bring 5,000 jobs back to the United States and significantly increase our investment here."
Misleading because however many jobs AT&T magically creates with this merger, they'll likely be eliminating just as many thousands, since that's the kind of "cost-reducing synergies" or whatever that companies merge for in the first place. Cynical because if they really cared that much about American jobs for their own sake they've have kept them here in the first place.
Update 5: Mobile industry expert and analyst Phillip Redman of Gartner tells us the AT&T-Mobile deal now has a "Very, very slim chance" of going through. He added that although he believes the DoJ's suit is unwarranted on the grounds of anti-competition, "It's very doubtful that this deal will ever happen" with AT&T as suitor.
Update 6: The FCC has come out in support of the DoJ's move:
FCC Chairman Julius Genachowski said, "By filing suit today, the Department of Justice has concluded that AT&T's acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws. Competition is an essential component of the FCC's statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile. Competition fosters consumer benefits, including more choices, better service and lower prices."
Update 7: AT&T finally speaks, via Wayne Watts, AT&T Senior Executive Vice President and General Counsel:
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. We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.
So AT&T's sure not giving up on their longterm plans, and we can expect a legal battle against the DoJ.
Update 8: PC Mag's Sascha Segan raises an excellent question amid all of AT&T's bleating: "Why can't AT&T bring call center jobs back to the US if the deal isn't approved? Nobody's stopping them."
Update 9: You can read the DoJ complaint in its entirety here.
Update 10: The DoJ's just held a press conference explaining their motives and argument in the case. Basically: the deal sucks for everyone but AT&T, which is afraid of T-Mobile, and they're not going to let it happen:
The Department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services.
As can be seen in the Department's complaint, AT&T felt competitive pressure from T-Mobile. One example cites an AT&T employee observing that "[T-Mobile] was first to have HSPA+ devices in their portfolio…we added them in reaction to potential loss of speed claims."
So as you can see, a merged AT&T and T-Mobile would combine two of the four largest competitors in the marketplace, and would eliminate T-Mobile, an aggressive competitor, from the market.
[T-Mobile] compete[s] on price, plan structure, network coverage, quality, speed, devices, and operating systems. A combination of AT&T and T-Mobile would eliminate this price competition and innovation.
Emphasis is our own.
Update 11: Sprint just chimed in—surprise, they're really happy!
"The DOJ today delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T's proposed takeover of T-Mobile, the DOJ has put consumers' interests first. Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T's assertions, today's action will preserve American jobs, strengthen the American economy, and encourage innovation."
You can keep up with Sam Biddle, the author of this post, on Twitter, Facebook, or Google+. Related Stories
View the original article here
This post was made using the
Auto Blogging Software from
WebMagnates.org This line will not appear when posts are made after activating the software to full version.
9 
We've been big supporters of everyone's favorite bald, t-shirted, vaguely Eastern European slingshot madman since the early days, which is why we're especially glad to see him a) with a fancy new intro reel and b) killing. all. of. them.
Last Friday, What's Trending tweeted—erroneously—that Steve Jobs had passed away. Which sent the internet into a frenzy! The tweet was deleted minutes after it was published. But how did it get out there in the first place?
I have to admit. Despite some widespread panic, the first ever evacuation of NYC, and the threat of billions of dollars being lost, part of me wouldn't be surprised if Irene just struck us a glancing blow. That perception gap is a problem.