Leaked AT&T Letter Damages Case For T-Mobile Merger

An anonymous reader writes "Yesterday a partially-redacted document briefly appeared on the FCC website, accidentally posted by a law firm working for AT&T on the $39 billion T-Mobile deal (somewhere there's a paralegal looking for work today). While AT&T engaged in damage control, telling reporters that the document contained no new information, a review of the document shows that's simply not true. Data in the letter undermines AT&T's primary justification for the massive deal, while highlighting how AT&T is willing to pay a huge premium simply to reduce competition and keep T-Mobile out of Sprint's hands."

Comments

Nothing new here

[nurb432]

No, really there isn't. Corporate takeovers to stifle the competition is normal practice ( hell its the primary reason they exist ), so nothing 'new' was really released here.

Re:Nothing new here

[Baloroth]

You're right, anyone who is surprised by this is, well, lacking in foresight, to put it diplomatically. The merger was obviously about anti-competition, especially given that T-Mobile is one of only two contract companies (Sprint is the other) to undercut Verizon and At&T prices and data caps. This deal should not only not go through, the attempt should result in massive penalties against AT&T (splitting the company? Forced regulation of prices or removal of data caps? Ah, one can dream.) More likely, this will be brushed under the table, the right people will get "campaign donations", and everything will go smoothly. For AT&T. And the customers will get screwed. More screwed, that is. But, in the wireless provider business in America, that's pretty much how these things go.

US cell system

[Anonymous Coward]

I was a recent visitor to the USA and was astonished at the 3rd world nature of its cell system. I had never imagined it was so bad, before visiting. Why USAians don't demand better regulation is a mystery to me. They seem intent on defending the very thing that makes their lives miserable compared with most developed nations.

This was also the impression I had of its subway system. I've ridden subways in Moscow, Tokyo, London, and other major cities. All were clean, safe, and the sort of system a developed nation can be proud of. The subways in the US smelled of urine (!!), were infested by RATS (!!), covered with trash, and had the feel of a thing you'd only want to use if you do not value your personal safety. This was my first exposure, and really changed the view I used to have of the USA as an advanced nation. It really is on par with some very poor and undeveloped countries in terms of civic infrastructure.

Capitalism at its best

[v(*_*)vvvv]

It's no new information because we knew it already.

Law of Capitalism #1: Customer value directly conflicts with corporate income. If more value goes to the consumer, less value will go to the corporation.

Mergers are never for the benefit of the consumer.

AT&T is willing to pay a huge premium simply to reduce competition and keep T-Mobile out of Sprint's hands

Law of Capitalism #2: Monopolies win.

But the problem isn't with our understanding of these laws. It's with the FCC not doing it's job, and everyone involved being paid off.

Re:Capitalism at its best

[immakiku]

Law 1: not true. In a competitive market, the corporation that can give customers the most value will keep the most value for itself. What you say is only true in monopolistic and (sometimes) oligopolistic environments. In this case, however, the market is pretty much an oligopoly. That's why the government has to step in to determine if this merger is something that allows AT&T to compete better and provide more value to the customers or if it's something that will altogether transfer more value from customers to AT&T.

Would Sprint buy T-Mobile?

[nine-times]

Sprint had (has?) a substantial problem when they bought Nextel, since it meant that they had to maintain two incompatible networks: CDMA and IDEN. Now they're going to buy a GSM carrier too? Seems silly.

Re:I don't think much will come of it

[Surt]

Do you have any idea how hard it is to make ends meet on a one-time 165 million dollar payout? Because the CEO will be toxic if he resigns over this, he'll never work for more than maybe 10 million a year again.

Re:Merger will still happen

[medv4380]

FCC stopped EchoStar from merging with DirectV. Otherwise Dish and DirecTV would be the same company. But that did allow NewsCorp to step in and buy DirecTV instead. http://www.marketwatch.com/story/echostars-directv-bid-blocked-by-fcc

I'm a TMo Customer...

[milbournosphere]

...and this merger won't be good for me. I went to my local public dialog forum here in San Diego, and found quite a few others like me. Yet, we weren't able to talk because AT&T had lined up minority group after minority group after interest group after volunteer group talking about how "good AT&T is for the community." I shit you not, one lady even came up and spoke for her whole two minutes about how her pregnant 14-year old daughter wouldn't be able to function without this merger.

The sad thing? Almost every person who stood up disclosed that they had received grants, money or deals from AT&T. Two hours later, I walked of the forum disgusted. I've been an ATT customer before, and I don't want to be again, and people must agree with me, because 50k people jumped ship from T-Mobile last quarter.

I'm bummed because T-Mobile has historically been a great company to work with. Any company that rings you up to make you aware of and retroactively pay for an overcharge is okay in my book. For some reason, I couldn't see ATT doing that kind of thing. Oh well, at least I'll be able to jump ship to Sprint when ATT officially acquires T-Mobile. I don't trust the FCC or the FTC to lift a finger to stop this merger.

Re:Deal will still probably go through

[quarterbuck]

The story pretty much says the same thing.
AT&T has said that it will cost them $39 Billion to buy TMobile. It has also claimed to investors that it will save them $10Billion.
The justification is that it will enlarge Wireless coverage in USA.
The leak now claims that the expanded network coverage will cost only $3.8 Billion http://www.wirelessweek.com/news/2011/08/unredacted-ATT-filing-shows-high-price-tag/
So AT&T Pays $39 Billion, saves $3.8 Bilion in network costs and $6.2 Billion in non-network costs (say closing and selling stores/laying off duplicated jobs). Assume that Sprint is worth the same as TMobile intrinscially - which is approx. $10B. The remaining $19 Billion premium paid must then be the cost of eliminating competition or the cost of keeping sprint from expanding.

Re:Ma Bell seeking to reduce competition?!

[ColdWetDog]

No, wait, that would just be a huge overreaction. Suicide it is, then.

Can I have your UID then?