Seven states join DOJ lawsuit trying to block AT&T, T-Mobile
updated 04:50 pm EDT, Fri September 16, 2011
New York, Calfornia back DOJ opposing ATT buyout
Resistance to AT&T's proposed buyout of T-Mobile grew on Friday after seven states joined the Department of Justice lawsuit aiming to block the deal. California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, and Washington all supported the view that the merger would reduce competition. DOJ officials were "pleased" at the support and reiterated its view that the deal would hurt the US.
"Together, we will seek to protect consumers from the anticompetitive harm that would result from this proposed transaction," the DOJ said.
AT&T, as it has done every time it has faced any opposition to the lawsuit, tried to downplay the significance of the deal. It wasn't uncommon for states to get involved regardless of the deal, the carrier said. The company went on to try and give itself the numeric advantage, pointing to 11 state attorneys general and "hundreds" of officials ranging from the federal to the local level that were backing the deal.
A rare instance of support from Democrats came just on Thursday when 15 Congresspeople voiced support. The public support isn't legally binding.
Lawsuits opposing mergers aren't unheard of in the US but typically only occur for a small minority of the proposed mergers each year and usually signify a strong possibility the merger will be denied outright. AT&T has said it would be willing to negotiate a settlement, but the lawsuit by its existence implies the DOJ doesn't believe any amount of divested network areas or price guarantees would resolve the problems.
Much of the more recent action occurred shortly after AT&T inadvertently posted an unredacted version of a filing that said it only needed $3.8 billion to reach the 95 to 97 percent LTE coverage it has been promising with the merger. AT&T has officially insisted that it still needs to spend ten times more and eliminate a major competitor for the same goal, but it has never touched on the direct implications that it either made false statements about what it initially needed for LTE or that the merger isn't needed at all.
Sprint has also sued AT&T and T-Mobile out of a view that it would have to compete against a rival that would have majority market share and much more control over device choice, prices, and network rates.
Fresh-Faced Recruit
Joined: Jan 2010
Hurt who ...
It helps T-Mobile subscribers. T-Mobile already said they would be able to build out LTE/4G across their network without the merger. It helps AT&T subscribers because they gain better coverage immediately after the merger in some congested markets and then a much better LTE transition for the longterm. There is still Sprint and Verizon as competitors. We tolerate markets like direct broadcast satellite with two players. There will be three in mobile phone service in the US. And that is not counting the folks like Virgin, H2O, BOOST, Cellular One, and lots more pre-paid or smaller market players. When the iPhone 5 comes out and is available unlocked from Apple, I am jumping ship from AT&T as they already said they were changing the terms of my contract (unlimited will be capped then rate reduced). I am jumping ship to either Sprint, or H2O wireless. H2O is the karmic justice choice, as they use the AT&T network.
But the consumers benefit from the AT&T T-Mobile merger.
The people who don't benefit are Sprint and Verizon. I think that those companies are who the various governmental agencies are representing no the whole of the people in the lawsuit.
The FTC and FCC have the power to force a negotiation of terms for the merger. Like if a phone is off contract, unlock it. Make SMS costs reasonable. The cost using the carriers own high data fees would be $0.01 per 5000 sms messages if they used the same rate structure for the data as the data plans use. They are actually cheaper in network as they use a substitution in the message the phones exchange with the cell towers to set signal strength and handoff the phone tower to tower. The equivalent of many many SMS messages each second in congested areas.
There is more they could ask for, and this may be their ploy. But the subscribers end up paying the price for the lawsuits. We pay the government salaries, and if they are successful, we pay the money into AT&T used in any settlements and the extra 6+ billion that AT&T then pays to T-Mobile for the deal failing.
The cheapest solution is to use the existing regulatory agencies rather than a lawsuit. The lawsuit is not needed. And the public utility commissions of the individual states could unilaterally enact what they'd need from any compromise (as in they don't have jurisdiction over a lot, and what they do can be controlled regulatory inside the state rather than messing up my life in another state...) It would be nice to see the other 43 states sue the 7 states to block them from blocking it. Who do those seven states think they are to affect the other 43 not aligned with them. This is a federal matter in terms of the merger. No states rights in the issue. Once it is or isn't merged the states can play with their states regulations.
And for the love of all that is money, the government is representing Sprint and Verizon interests in these suits not yours and mine.