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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!
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
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.
It makes sense. Think about all the business that T-Mobile lost while this thing was pending. People did not renew, some people did not switch to T-Mobile due to the uncertainty, etc. If it DOESN'T go through, T-Mobile needs to be compensated for that loss.
Copying a post of mine from earlier, yes, T-Mobile actually will be compensated quite well for this.
If this deal is blocked, it would not be bad news for T-Mobile as some here have claimed. According to Bloomberg,
"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.