Government sues to block AT&T, T-Mobile merger

The Justice Department filed suit Wednesday to block AT&T's $39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers.

Associated Press

WASHINGTON —

The Justice Department filed suit Wednesday to block AT&T's $39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers.

The government contends that the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and that would lead to price increases.

At a news conference, Deputy Attorney General James Cole said the combination 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."

The lawsuit seeks to ensure that everyone can continue to receive the benefits of competition, said Cole.

AT&T said it would fight and ask for an expedited court hearing "so the enormous benefits of this merger can be fully reviewed." The company said the government "has the burden of proving alleged anti-competitive effects, and we intend to vigorously contest this matter in court."

Four nationwide providers - Verizon, AT&T, T-Mobile and Sprint - account for more than 90 percent of mobile wireless connections.

T-Mobile has been an important source of competition, including through innovation and quality enhancements such as the roll-out of the first nationwide high-speed data network, according to Sharis Pozen, acting chief of Justice's antitrust division.

Mobile wireless telecom services play an increasing role in day-to-day communications, with more than 300 million smart phones, data cards, tablets and other mobile wireless devices in use.

Deutsche Telekom, the owner of T-Mobile, had no immediate comment.

The proposed cash-and-stock transaction would catapult AT&T past Verizon Wireless to become the nation's largest wireless provider, and leave Sprint Nextel Corp. as a distant number three.

In a statement, Sprint said the Justice Department's lawsuit "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."

AT&T and T-Mobile compete nationwide, in 97 of the largest 100 cellular marketing areas, according to the suit filed in U.S. District Court in Washington. They also vie for business and government customers.

The suit says AT&T's acquisition of T-Mobile would eliminate a company that has been a competitive factor through low pricing and innovation. T-Mobile had the first handset using the Android operating system, Blackberry wireless email, the Sidekick smart phone, national Wi-Fi "hotspot" access and a variety of unlimited service plans.

In support of its case, the department quoted an unidentified AT&T employee on a competitive issue, the sophisticated wireless broadband devices that can provide high-speed data connections. The AT&T employee, according to the suit, noted that T-Mobile was first to have such devices in its portfolio and that "we added them in reaction to potential loss of speed claims."

Federal Communications Commission chairman Julius Genachowski said the record before his agency "raises serious concerns about the impact of the proposed transaction on competition." The FCC's separate review of the proposed merger is not complete.

Commission member Michael Copps, a Democrat and a staunch opponent of industry consolidation, said that he shares "the concerns about competition and have numerous other concerns about the public interest effects of the proposed transaction, including consumer choice and innovation."

Democratic Sen. Herb Kohl of Wisconsin, who heads the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, said the suit was an effort to protect consumers "in a powerful and growing industry that reaches virtually every American."

The suit used some of T-Mobile's own documents describing its role in the market to explain why the merger shouldn't take place. In those documents, the company calls itself "the No. 1 challenger of the established big guys in the market and as well positioned in a consolidated 4-player national market."

T-Mobile said its strategy is to attack other companies and find innovative ways to overcome the fact that it is a smaller company.

T-Mobile "will be faster, more agile and scrappy, with diligence on decisions and costs both big and small," one company document said. "Our approach to market will not be conventional, and we will push to the boundaries where possible."

Since AT&T first announced the deal in March, it has insisted that consumers would have a choice of multiple wireless providers, including Leap, Metro PCS and U.S. Cellular, in many markets even if the deal is approved.

But the department rejected that argument. It said regional providers face "significant competitive limitations" because they do not have national networks. The department said the enormous investments and resources needed to acquire wireless spectrum and build a network make it very difficult for new companies to enter the wireless market.

AT&T and T-Mobile also have said the merger would reduce dropped and blocked calls, and speed mobile Internet connections for subscribers. Faster service would result by combining their limited wireless spectrum holdings at a time when both companies are running out of airwaves to handle mobile apps, online video and other bandwidth-hungry services.

Finding more airwaves to keep up with the explosive growth of wireless broadband services is a priority of the FCC and the Obama administration.

But the Justice Department said AT&T could "obtain substantially the same network enhancements ... if it simply invested in its own network without eliminating a close competitor.".

Online:

Justice Department's lawsuit: http://tinyurl.com/44lx4qo
  http://seattletimes.nwsource.com/html/businesstechnology/2016065718...

Views: 81

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

Comment by truth on August 31, 2011 at 4:09pm

T-Mobile International is Deutsche Telekom - A German-based holding company

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Doc Vega posted blog posts
6 hours ago
Doc Vega posted a photo

main-qimg-5806e1adb3109cf42e236b6063e7e3ec

The cowardly murderous Democrats out to destroy America.
7 hours ago
Sandy posted videos
10 hours ago
Burbia commented on Sandy's photo
Thumbnail

FB_IMG_1710523455761

"Is that the narrative now? Its more like Tik Tok influenced the younger generation to not be…"
21 hours ago
Burbia commented on Less Prone's photo
Thumbnail

Rebuilding Khazaria

"Who exactly are these beings? They violently push their way into the Middle East claiming it their…"
22 hours ago
Less Prone posted a photo

Famine or War What Would it Be

How far are these monsters allowed to go?
yesterday
Less Prone favorited cheeki kea's blog post The saddest post I've ever read. ( vaccine victim speaks out. )
yesterday
Less Prone commented on cheeki kea's blog post The saddest post I've ever read. ( vaccine victim speaks out. )
"It's so cruel and unfair. So many innocent people fell for it and even now the wictims are…"
yesterday
Doc Vega commented on truth's video
Thumbnail

MSM Admits US Funding Al-Qaeda & Taliban Terror Attacks

"In all likelihood if the MSM comes up with an explanation it's probably pure unadulterated…"
yesterday
Doc Vega commented on truth's video
Thumbnail

MSM Admits US Funding Al-Qaeda & Taliban Terror Attacks

"Mark Levin talks about all the front groups funded by Soros that have provided revenue for the…"
yesterday
Doc Vega favorited cheeki kea's blog post The saddest post I've ever read. ( vaccine victim speaks out. )
yesterday
Doc Vega commented on cheeki kea's blog post The saddest post I've ever read. ( vaccine victim speaks out. )
"Sad, but this is the fate of those who don't take heed and refuse to do their due diligence…"
yesterday
Doc Vega posted blog posts
yesterday
cheeki kea commented on Sandy's photo
Thumbnail

FB_IMG_1710523455761

"Hi Thia I'm back with news.... gvmnt will not protect you from Tick Tock, at this point it…"
yesterday
cheeki kea commented on cheeki kea's blog post Dr. Aseem Malhotra's Explosive Court Testimony on COVID "Vaccines"(UPDATED)
"More news dripping out from this story. ( found on Slay news…"
yesterday
cheeki kea commented on cheeki kea's blog post The saddest post I've ever read. ( vaccine victim speaks out. )
yesterday
cheeki kea posted a blog post

The saddest post I've ever read. ( vaccine victim speaks out. )

You know what, I think if God had a message for us here it would be the one that goes... Be as Wise…See More
yesterday
Burbia commented on Burbia's group The Comment Section is Closed
"So far, there are 14 comments here for the video about Iran's influence on Generation Z and…"
Wednesday
tjdavis posted videos
Wednesday
tjdavis posted photos
Wednesday

© 2024   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted