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Sprint complains of antitrust risk; T-Mobile out of keynote

updated 11:50 pm EDT, Sun March 20, 2011

Sprint warns ATT T-Mobile deal antitrust concern

Sprint and T-Mobile late Sunday quickly issued formal reactions to the AT&T buyout of T-Mobile. As expected, Sprint objected to the $39 billion deal and said it would "alter dramatically" the US cellular landscape. It would put too much power in the hands of AT&T and Verizon, making them gatekeepers for things such as backbones and roaming deals.

"If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete," Sprint wrote.

Democratic Senator Jay Rockefeller stressed to the Department of Justice and the FCC that it was "absolutely essential" the deal be investigated. He added that the Commerce Committee would be involved.

AT&T originally insisted the deal would be competitive as 18 of 20 major cities had five or more networks to compete from. Critics, however, have responded that the added clout gives AT&T an unfair advantage in device selection. T-Mobile also has unlimited-with-throttling data and doesn't block non-Market apps on Android devices, both of which would likely go away without the FCC imposing price and openness regulations on the deal.

T-Mobile, meanwhile, has chosen to back out of the official CTIA opening keynote. It was to have participated in an event at the Orlando show on Tuesday, March 22 at 9AM alongside the heads of other major carriers AT&T, Sprint, and Verizon. A statement said only that the exit was due to "extenuating work demands," though it's most likely either due to work relating to the merger or the complications of having to present after its position had suddenly changed.

A conference call discussing the AT&T and T-Mobile buyout is due to take place Monday at 7:30AM; Electronista hopes to provide live coverage.

By Electronista Staff


  1. JuanGuapo

    Fresh-Faced Recruit

    Joined: Jan 2008


    I find...

    ...myself looking at this merger with mixed feelings. On one hand, it's a win-win for AT&T and T-Mobile. On the other, it's a lose-lose for competition and consumers.

    AT&T only gains from their buyout of T-Mobile assets (eg. spectrum). DT gets a golden handshake to get out of the U.S. wireless market.

    Consumers are limited to Verizon, AT&T, Sprint, and a handful of MVNOs (ie. MetroPCS, Cricket, etc.) which gains them nothing because there is a shallowing pond of competition.

    Was this caused by the iPhone? Certainly a factor but not wholly--the smartphone in general juiced the market and people have flocked to the major carriers for iPhones, Droids, etc. iPhone was just Ford to Google's Chevy (or vice versa).

  1. bleee

    Mac Enthusiast

    Joined: Mar 2002


    I'm not sure what kind of response AT&T expected

    The execs at AT&T really need a history lesson that's... actually hosted on their own website

    "The changes in telecommunications during these years eventually led to an antitrust suit by the U.S. government against AT&T. The suit began in 1974 and was settled in January 1982 when AT&T agreed to divest itself of the wholly owned Bell operating companies that provided local exchange service. This would, the government believed, separate those parts of AT&T (the local exchanges) where the natural monopoly argument was still seen as valid from those parts (long distance, manufacturing, research and development), where competition was appropriate. In return, the U.S. Department of Justice agreed to lift the constraints of the 1956 decree. Divestiture took place on January 1, 1984, and the Bell System was dead. In its place was a new AT&T and seven regional Bell operating companies (collectively, the RBOCs.)"

    So now it's not copper but instead wireless spectrum...

  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999



    Companies built around an infrastructural paradigm; electricity, phones, trains, water etc. are intrinsically monopolistic because of the cost and extent of the network that the given industry needs. The alternative is many companies all digging up the roads to lay their own pipe. It seems that with such companies, there always comes a point when government says "...thank you for building this extensive infrastructure but now we're going to carve it up and give it to your competitors because that's... fair!" The U.S. were quite happy to let Bell build a telephone network over about fifty years and then decide that they didn't like the paradigm that makes the construction of such networks possible to begin with, economy of scale being the most important. I'm not saying monopolies are good, it's just that in some industries they are both inevitable and necessary.

  1. vintagegeek

    Fresh-Faced Recruit

    Joined: May 2007



    Come on GOOGLE!!!

  1. battles

    Fresh-Faced Recruit

    Joined: Mar 2011


    I remember this...

    ... Ma Bell is back! What's cooking Mama? Higher prices and consumer dissatisfaction (al a mode).

  1. Inkling

    Mac Enthusiast

    Joined: Jul 2006


    Follow the money

    Quote: "Democratic Senator Jay Rockefeller stressed to the Department of Justice and the FCC that it was "absolutely essential" the deal be investigated. He added that the Commerce Committee would be involved.

    Translation: Oops! In the 2008 election neither AT&T nor T-Mobile poured buckets of money into the Democratic campaign like Google did. The result is that Google's outgoing CEO, Eric Schmidt, is likely to become Obama's Secretary of Commerce, while the AT&T/T-Mobile merger will get water-boarded by a Senatorial committee.

    To understand politics, "Follow the money" is always a good rule.

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