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US gov't. files complaint to block AT&T, T-Mobile merger

updated 11:45 am EDT, Wed August 31, 2011

Would remove 'significant' competition from market

The US Justice Department has sued to block AT&T's acquisition of T-Mobile, Bloomberg reports. A Washington, DC court filing charges that the absorption of T-Mobile would violate antitrust laws. "AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market," the document reads.

The T-Mobile buyout is valued at approximately $39 billion. Should the deal be successfully blocked, AT&T will still owe T-Mobile's parent company, Deutsche Telekom, about $3 billion in cash. It has also promised to provide T-Mobile with wireless spectrum in some regions, and reduce charges for calls into the AT&T network. In all AT&T would have to spend as much as $7 billion.

AT&T has claimed that a merger would lower prices while improving service in major urban markets. Some US politicians, though, have argued that it would eliminate competition, and as a result allow prices to climb. The Justice Department may still conceivably be influenced into accepting the merger, but this would likely only happen after some negotiated concessions by AT&T.



By Electronista Staff
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  1. Andrej

    Joined:

    -12

    comment title

    Why the h*** is the government sticking their nose in our business YET AGAIN?
    Stay out of our phone business.

    Comment buried. Show
  1. prl99

    Dedicated MacNNer

    Joined: Mar 2009

    -10

    agree

    I'm all for a strong government but this decision reeks of partisan politics. Verizon picked up other wireless companies leapfrogging AT&T. The whole idea of competition is a joke as prices aren't set because of competition. The US is having problems because of too many wireless carriers with too many different frequencies. Can't we standardize on a common frequency just like we try and standardize on other common things, like electrical outlets (sorry rest of the world, you have way too many outlets).

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    -2

    comment title

    your comment

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008

    +6

    Inside AT&T

    AT&T had to be broken up once... let's not have to do it again. It's not about too many carriers, or standards. It IS about LYING and mistrust since AT&T can't be trusted... ask people who trained there or who worked there. When Jobs threatened to kick AT&T''s a** over bad communications they started upgrading their system after first denying there was any problem. Big corps. do this. Deny until the hue and cry gets terrible or congressional investigations are threatened. WHEN has AT&T lowered prices on ANYTHING? Only when the competition does... they won't do it first. T-mobile was a pain in the neck to them. The "old" business model is if you can't control your competition you BUY them out.

    Verizon drives me nuts with their "little" scams but I would take them any day over AT&T, both of which I HAVE used. Those who complained vociferously about AT&T's bad service in big cities have basically disappeared... where is your voice and your memory?

    At last the government pulls its head out of the sand as most thought this merger was going to be a no-brainer for AT&T.

  1. facebook_Robert

    Via Facebook

    Joined: Aug 2011

    +2

    here we go

    They'll negotiate some concessions all right. AT&T will agree to do something that helps them and solves nothing - like they'll agree to give consumers a discount when they switch from competing carriers.

    At no point will the government actually ensure that competition is increased or that the rate consumers pay while be lowered.

    The whole point is AT&T wants more money, and if they aren't getting more money - they'd be the first to reject the merger.

    You should take the merger going through as a sign AT&T got what they wanted - regardless of the DOJ's fake concessions.

  1. aristotles

    Grizzled Veteran

    Joined: Jul 2004

    +5

    There is no direct compeition now

    With Veriizon on CDMA and Sprint on CDMA + WiMax, T-Mobile on AWS and AT&T being the only one on standard HSPA in the US, there is no direct competition for the same customers using the same handsets.

    Other countries like Canada manage to have multiple carriers sharing the same HSPA frequency bands so why can't the US companies do the same thing?

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Re: direct competition

    You don't need to all be running on the same frequencies to compete. If you go by that logic, Apple's no competitor to Microsoft because they don't run the same OS.

  1. PRoth

    Fresh-Faced Recruit

    Joined: Aug 2008

    0

    @aristotles - competition?

    Having companies share, say, HSPA frequency bands doesn't ensure competition. We here in Canada enjoy some of the highest wireless rates in the world... The "enjoy" part WAS sarcasm... :)

  1. facebook_Justin

    Via Facebook

    Joined: Sep 2011

    -1

    comment title

    So the government cares about AT&T buying out T-Mobile because it would create a monopoly, but it doesnt care about the fact that there are two major networks (Verizon and Sprint) that sell phones that cannot be unlocked even after the contract has expired, thus creating a perfect monopoly of the device?

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