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Justice Dept. Files Antitrust Complaint Against AT&T and T-Mobile Merger
Hitting the front page for the first time, AngryDeuce writes with a piece of exciting news hot off the news wire. From the article: "The Justice Department is blocking AT&T's $39 billion deal to buy T-Mobile USA, saying the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices. The deal has faced tough opposition from consumer groups and No. 3 carrier Sprint since it was announced in March."
The DOJ has released a full statement on their decision to file the antitrust suit, and AT&T has drafted a response. So much for AT&T's paltry promise of bringing 5000 unskilled call center jobs back to the U.S. if the merger were approved. Competition may yet live!
Sure, they'd hire 5000 new people, but how many would they fire from T-mobile in the process?
My money is on a good deal more than 5000.
What do I know, I'm just an idiot, right?
"We are surprised and disappointed by today's action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated. We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court. We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court."
FWIW, I think the Justice Department did right today. As a T-Mobile customer, I am very happy. Here's hoping that the justice department succeeds.
I thought I would never live to see the day that a governmental department would block yet alone sue to block the merger of two mega corps.
If I wanted AT&T as my service provider I would have subscribed to their service.
If you have to buy customers perhaps it's time to change ones business strategy.
Don't know something? Look it up. Still don't know? Then ask.
Their own internal documents show AT&T does not need T-Mobile to expand service, and that AT&T intends to raise prices. This is a deal that should not happen. At last the DOJ does something right on the merger front.
"Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery?" - Patrick Henry
Sure they could afford to bring back a paltry 5000 jobs.
They would be eliminating one of their main competitors, laying off way more than 5000 (more skilled!) workers, and opening the way to raising their prices by grabbing a customer base with even less choice and jacking up their rates.
Nice to see government doing what its supposed to do for a change.
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I wonder how long until the usual conservative pundits start ranting and raving about their sudden new interest in anti-trust law.
A failure of the deal puts T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.
However, AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.
Huh? If the deal DOESN'T go through, AT&T is giving T-Mobile money and spectrum?
I don't get it.
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In Soviet Russia, pants complain you!
the crappiest carriers in the USA who did the race to the bottom thing by offering the cheapest prices but the worst phones until recently suddenly find themselves in trouble. Sprint is the worst with their proprietary wimax offering. not only that but they should offer unlimited data so all the data hoggers would leave VZW and AT&T and improve service for the rest of us
T-Mo has a good phone selection this year and Sprint is getting better as well but Apple killed them with the iphone
Do not welcome our AT&T overlord masters.
I like T-Mobile!
I had AT&T and paid dearly to escape their evil clutches. I did not want to go back. Yeah for the DOJ! I hope they win.
* Carthago Delenda Est *
Yay!
Now lets hope they don't negotiate a deal (or worse yet, that the Department of Justice doesn't flat out lose the case).
Mergers are bad for everyone, except for one of the two CEOs involved. Employees lose out as their jobs become redundant. Customers lose out from lack of options and the inevitable price increases following consolidation. Stockholders lose out (in the long run) as there's one less successful business to invest in.
I played cat-and-mouse trying to get away from AT&T for a number of years: I was an Ameritech Wireless customer until they got bought out, at which point I switched to Cingular... jerks.
Given the incredible history of consolidation in the American telecom industry over the past decade anything that slows the return of Ma Bell's monopoly is a good thing, even if the overall picture is still dire.
Ma Bell was broken up by the DOJ because it was a serious problem in the marketplace. These telecom corps are essentially trying (deliberately or not) to reassemble back into a new incarnation of it. AT&T has already reclaimed 4 of it's DOJ separated pieces and a good section of the internet service. Now they want mobile too?
Um... If I was the DOJ and knew my history of the department big warning bells would be ringing in my mind. I'm not surprised they've opposed this. Personally, I think the current telecom leaders are already pushing the limit given how much control they have over a lot of television, communications, and mobile services.
Not all slashdotters believe the same thing. For instance I think libertarians are either woefully naive, liars, or morons. I applaud the government taking action to ensure the cellular service market does not become a duopoly.
Every once in a while, the Feds get it right. From the article,
"Moreover, the department said that AT&T could obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor."
We have been saying this here forever. AT&T et al need to invest in their own infrastructure. It is about time that the Federal government is on board with that.
"Small government for "Libertarian" Slashdotters, big, intrusive government for those we don't like."
You need to study up on two things, mister small-brained conservative.
1) the concept of a false dichotomy.
2) the concept of antitrust law.
You are apparently unwilling or unable to understand there are some functions which can only be accomplished by the government. Antitrust law is a very good example. Without antitrust law, the consumer can and will be abused. To prevent this or at least mitigate it, government intervention is required.
As a T-Mobile customer since 1999 (when they were Voice Stream) I couldn't be happier. I want no part of AT&T.
I've been with T-Mobile 8 years. When this merger goes through they will lose at least one customer. I would rather have NO phone than use AT&T - one in the same really.
I am pleasantly surprised to hear this news.
I can't help but wonder what lead to this; if this was a matter of AT&T not making contributions to the right politicians, not being as connected as a company like GE, or not being in an industry like finance or healthcare. I'd say Bank of America gets away with far worse and not only are they not investigated but they're rewarded with bailouts. Of course, this all could be for show and the merger will end up going through anyway.
I think it reflects a sad state of affairs in this country that we would even be surprised by this turn of events and that I'm inclined to assume the worst.
I never made such a claim. Again you act as though as all slashdot posts come from one person.
The government is not coming for me, as far as I can tell, and if it did I would defend myself in court. Government is needed and all functional societies have one.
Isn't this a few days early to be appearing on /.?
Have gnu, will travel.
Baghrea, India - Abrupt halt to the creation of new AT&T call center has left the mayor and hundreds of tentative call center employees angry.
"We had assurance from their top man that once the T-Mobile acquisition completes, this call center would handle bulk of the customer calls during and after the acquisition. We went a head and had supporting infrastructure put in, and then they pull the rug right out from under our feet!" the mayor complained bitterly.
"We wasted spent months of our lives perfecting our American English accent to work in this call center. Whatever would we do now?" the now unemployed work force vented.
(yes, I made these up.)
other cell carriers have a lot more to do with it than common sense in the government. I fear this "outbreak" you speak of is at best, overly exaggerated.
ELOI, ELOI, LAMA SABACHTHANI!?
Y'know for the past year or so I've been wondering how AT&T was ballsy enough to drop unlimited data and tiered text messaging for users, not to mention their tethering plan scam, when they should have been keeping up appearances to the DOJ that they actually care about their customers. Looks like that was a bad idea!
A sentence you'll never see on an Internet discussion board: "You know what? You're right."
I'm sure it didn't help Microsoft any, but I didn't mind when bing sent me a check last year for buying a nice camera on tigerdirect. I'll gladly encourage them to continue using a business model that involves giving me free money!
And honestly, it seems to be working wonders for Firefox with google paying big bucks to be the default search engine--and unlike MS, I'm sure google is actually getting a positive return on that investment.
Just because the merger is not approved does not mean that T-Mobile will continue as a viable alternative. My understanding was that the reason that Deutsche Telekom was selling T-Mobile was because they were not making enough return on investment.
The first article says that AT&T will give T-Mobile $3 billion if the deal does not go through, but that is not the case. AT&T will give Deutsche Telekom $3 billion if the deal does not go through. There is no reason to suppose that Deutsche Telekom will pass that money on to T-Mobile.
Are we any better off if T-Mobile goes bankrupt? I do not know if that will happen if this deal does not go through, but there is reason to suspect that it might.
The truth is that all men having power ought to be mistrusted. James Madison
"Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month."
So T-Mobile would get $3 billion in cash, more spectrum, and reduced fees for calls going through AT&T's network. This would seem to be good news for T-Mobile, as all of these things would make them more competitive.
Jobs shouldn't be the point of this in any way. If you think the government should force companies to hire more people you've fallen for the broken window fallacy. It's not about efficiency it's about competition. This action is supposed to improve service and lower prices by allowing other companies to compete. And guess what? If another company can compete by farming out 50% of its support to India and still sell phone services that's the way it's supposed to go.
If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.
I'm a current T-Mobile customer with 2 cell phones on a single plan (one for me and one for my wife). After years of horrible customer service experiences, sub-par network service and, of course, after being psychologically sick of giving a company money that was involved with wholesale illegal wiretapping, we canceled our 2 cell phones, DSL service, and home landline (all AT&T).
We went to T-Mobile because they were one of the only other companies left. They were "new" to us, a fresh company with young motivated employees that actually sounded genuinely glad to help you. We were so happy with them.
When we heard about the pending merger with AT&T, we immediately started looking around. We haven't switched yet, but as soon as the merger was complete we would have broken our contract (we were pretty sure there would be something we could say about not paying an early cancellation fee since a merger wasn't in our contract). Over the past few months, we noticed little things start happening with our account (which may or may not be related to the merger, yet we never experienced it before the word was out). Extra bill charges, randomly having our account turn on Internet access on my wife's cell phone without us asking for it (and them charging us $30/month for it), and even when we called them, the vibrance in their voices were completely gone. I might be sounding wishy-washy about the customer service enthusiasm, but seriously. It was a DRAMATIC change. It already seemed like the call centers were moved to AT&T.
I really hope this thing is blocked. I want to stick with T-Mobile. I want to give my money to a company that isn't involved with an enormous constitutional rights violation. I want to be able to choose. I don't want another Ma Bell.
It is pitch black. You are likely to be eaten by a grue.
This makes Slashdot sounds like a sportscaster:
"With his 63rd consecutive summary, CowboyNeal writes..."
"With a record breaking 3 spelling errors in one summary, Rob Malda writes..."
It'd be a shame if something happened to it. Why, we even have union thugs standing by to cut your cables!
We see you have not donated to Obama's reelection
Unlike GE.
See, they didn't even have to pay taxes!
Donate enough, and we'll even find an Obamacare waiver for you!
Ain't shakedown government great! It's the Chicago way!
I put my girlfriend in a pre-paid T-Moblie plan about a month ago, long after the announcement.
Here's proof: http://prepaid-phones.t-mobile.com/
Um, can I just point out that this does not mean the deal is automatically blocked?
The summary is wrong in stating that DoJ is "blocking the deal." They can't do that. All they can do is go to court and ask for an injunction, and the court may or may not grant one based on what DoJ presents to it.
So, it's not time to celebrate or mourn yet.
This is just stupid. We WANT AT&T and T-mobile to merge because having one carrier maintain all the GSM infrastructure and manage that spectrum is simply more efficient.
What the government needs to regulate is consumer's access to the competitive market. Require all phones to come with both GSM and CDMA radios (or have a cheap, replaceable part to do so) and be compatible with all networks. Then allow consumers to get out of their contracts if they find a minimum data speeds or voice quality isn't met. The markets will take it from there.
i am glad we elected a dem in 2008 - if the GOP had won, they would not even have considered this - the GOP mantra is that business knows what is best for everyone
Are there any companies that aren't surprised and disappointed by lawsuits against them?
Not to be jaded but the DoJ is ultimately an extension of the President. The primary motivation here is political. The President has seen that this move is incredibly unpopular and has remained so for an extended period of time so he's told the Attorney General to move to block it, or at least be seen to do so. This gets him great press and lets him tout that he fights for the masses not just the Rich ("like the Republicans" at least implied).
I completely support blocking the merger but I don't for one second trust the base motivations of those involved.
Also for those of you talking about the 5,000 jobs AT&T has promised to return to the US you might want to look into how many jobs they off shored first. AT&T is starting to realize that off shoring is no longer as economically feasible as it once was and creates significant discontent with the customers, this was likely coming regardless of the merger's success. That would also be why many corporate support centers are still in the US and the consumer support has primarily been off shored. If AT&T wants to make a splash they can promise to move ALL off shored jobs back to the US.
I'll meet you at the intersection of "Should be" and "Reality"
The main argument of all government haters right now is I want the government out of my life because I get no benefits and pay huge amount of taxes.
First of all this, of course, ignores the fact that they use the roads, they live in safe conditions, etc etc etc that the government in its form has provided.
But, they always leave out the 2nd part which is they want government there when they are in need of something. I am not talking about the level of the individual so much as at the level of the organisation... the first thing a big org. wants when threatened is government help! (see RIAA, MPAA, the railroads in the early 1900s, etc.).
We live in the age of hypocrisy. It's so pervasive we don't even notice it any more.
Apparently AT&T didn't learn their lesson the first time.
http://en.wikipedia.org/wiki/Bell_System_divestiture
The DOJ will eventually relent and allow the merger to go through; AT&T just has to deliver more bribe^h^h^h^h^h campaign money to the current administration. Sprint had been free-flowing the cash to try to stop this.
Ah, the sweet, sweet, naivete of the slashdot crowd to think that Eric Holder's DOJ cares about anything but political power. Maybe they should go and ask ICE Agents Jaime Zapata and Victor Avila, or Border Patrol Agent Brian Terry about the DOJ trying to do the "right thing."
One glorious day mobile pricing will be based entirely on bandwidth usage. Text messaging will be- for all intents and purposes- free, as the associated bandwidth costs carriers practically nil. Nobody will be punished for tethering their computer to their phone- data is data, however it gets consumed. You'll be able to use any phone/broadband modem/etc which adheres to standards with any carrier, and applications for your phone etc won't be under carrier control at all (goodbye to paying monthly fees for software which should be built in). Carriers will have to compete on price, and enough carriers will have coverage in any given area that prices will be much less painful (especially for light-bandwidth users)- they will better reflect the cost of providing service rather than the demands of monopoly profits.
Wireless coverage in Europe is already there on some of these counts. It will take a long hard battle to bring this kind of consumer-friendly atmosphere to the US. Blocking a merger like this which threatened to narrow competition down to two firms (Sprint would likely have been edged out and finally purchased by either the behemoth AT&T-mobile or Verizon) is only the beginning.
I think you fall under his moron category. Three felonies a day? Give me a break. You have gone off the deep end.
Support a great indie game: http://www.abaddon360.com
The average respectable middle class male commits something like two or three federal felonies a day
Not me, I only commit local and state felonies!
The average respectable middle class male commits something like two or three federal felonies a day
If it is that common then name them.
First of all this, of course, ignores the fact that they use the roads,
I wish I only had to pay for roads. My tax burden would be a fraction of what it is now.
they live in safe conditions, etc etc etc that the government in its form has provided.
The police don't keep me safe, and the government tries to prevent me from providing for my own safety.
Three felonies a day? Give me a break. You have gone off the deep end.
I am not posting to defend the GP's statements. Instead, I would like to point you to the book Three Felonies a Day, which I have read. It does a good job of showing the pervasiveness with which liberty has been (and continues to be) eroded by inappropriate application of outdated laws and regulations. It was written by a well respected lawyer who champion's individuals' legal rights. It is worth a read.
I welcome our new 99% overlords.
I want ATT to overpay for a prior generation cell phone network. The small, local cell phone companies will build new LTE networks instead. People should stop complaining about high prices from the big cell phone companies, and get to know the smaller cell phone companies, like US Cellular, MetroPCS, and Cricket Wireless.
Who wants a wireless carrier called AT&T-Mobile?
This was sent out at 8:05AM EST. Interesting timing given the news article.
... and pledge that the merger will not result in any job losses for U.S.-based wireless call center employees of T-Mobile USA or AT&T who are on the payroll when the merger closes.
... especially during these times of economic uncertainty. This will only strengthen our position as a premier U.S. wireless company. I'm proud that we are investing even more in the United States as our customers remain hungry for faster data networks and world-class service.
... along with a workforce that will be best positioned to grow in today's competitive technology environment.
--------
To: All Mobility and Consumer Markets employees
Dear Colleagues:
By now I hope you've heard the great news that we plan to bring 5,000 wireless call center jobs back to the United States following the close of the T-Mobile acquisition
This is truly great news for our customers, for our employees, for AT&T and for the country
What does this announcement mean for the rest of Mobility employees? While it's impossible at this point to project every organizational decision we'll make after the merger closes, we've stated publicly that we expect most workforce reductions from the merger to be achieved by natural attrition. More importantly, through this merger we'll create new opportunities
I'm counting on you to remain focused on your job and to continue delivering the highest quality level of service every day to every customer.
Thanks for all you do.
Ralph de la Vega President and CEO AT&T Mobility and Consumer Markets
Casey Jones was a Son Of A Bitch.
Rode his engine up a whore's house ditch.
Walked up the stairs with his dick in his hand said 'xcuse me Ladies I'm a RailRoad Man.
Lined 98 up against the wall.
Fucked 96 'till his balls turned blue.
Turned around jacked-off and fucked the other two.
Old Casey Jones dies and went to hell.
Two little babies poped out of the wall and said Fuck that Bastard 'before he Fucks up all.
When has a merger ever created more jobs? IIRC there was a leaked memo that mentioned they were planning on laying off about 20,000 employees after the merger. I can't remember the source at this time, but will post again once I find it.
I've been through mergers. It's always the same. There is always a duplication of services within the newly formed larger business entity so in order to create more efficiency they will remove those duplicate positions from the payroll.
An effective "democracy" creates the illusion the people have a say in their government.
For one, you'd better have appropriate documentation before buying or selling anything made out of wood.
I don't do that.
Also that is only 1 uncommon thing, not the two or three you claimed were common. In fact that is a law I agree with. You should have to prove that you do not use endangered woods in products you sell. You could just avoid using those types of woods altogether if ti is too much hassle. Interstate regulation of commerce is a federal power in the constitution!
Holy crap. Someone dump AT&T into a vat of molten steel quick! You can break the mother-fucker up, but it just keeps reforming!
Cool post bro, highfive \o
You seem to be ignorant of how relationships like this work.
DT gets the cash. Most likely they will use it to fund other subsidiaries, pay dividends to shareholders, or the like. What they will not do with it is sink it back into T-Mobile. Which means T-Mobile will not be able to use it to expand infrastructure, acquire more subscribers, etc.
Think of it like a guy that owns 5 convenience stores. He decides that one is unprofitable and he's unwilling to invest any more money into it. He tentatively agrees to sell it to a woman who agrees to pay him a sum of money if the deal falls through. The deal falls through. The woman pays the guy the money. The unprofitable store is still unprofitable, is no better off, and will likely close shortly. But the guy that owns the store walks away with a nice spot of cash to offset his losses.
Federal agencies have two types of positions, career and appointed. The appointed positions generally set the tone and direction for the career positions. So, it could be the same zombies but more likely than not a different witch is the one holding the staff of power that directs their actions.