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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?
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
Agreed. I'm quite happy that the Department of Justice has fallen on the side of reason (for once). As a T-Mobile customer who moved to T-Mobile to avoid AT&T, I'm hopeful that this merger will fall apart, giving T-Mobile a bit of cash (meh) and some more spectrum (yay!).
AT&T doublespeak. Yes they met with the DoJ and the DoJ gave no indication that they would block the ruling. However it most likely the DoJ had not formed an opinion until after reviewing the implications and AT&T's documents. Or that the DoJ probably wanted to block it from the beginning but prudence would dictate they hear from AT&T first. If they hadn't met with AT&T, then the company would complain that they were being treated unfairly.
Well, there's spam egg sausage and spam, that's not got much spam in it.
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.
Standard practice in M&A. The acquiring company must always put something on the table if the deal doesn't go through due to the restrictions placed on the company to be acquired by the SEC and the agreement the two companies enter into. Google has put similar stuff on the table for Motorola if their deal doesn't go through.
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.
The HTC Evo 4G and Evo 3D are both great phones (3D gimmicking asside). Just because they aren't iPhones, doesn't mean they aren't good. And yes Sprint has poor coverage in a few areas, but they have amazing coverage in others. Not to mention you can't beat the price. I left AT&T and my iPhone after AT&T decided they could alter the way they applied my corporate discount in the middle of my contract. Even after paying an early termination fee, I was saving $30 a month with Sprint in just a few months.
Oh yeah and I have a hell of a lot fewer dropped calls with Sprint, too.And no more "The network is busy" when trying to make a phone call.
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.
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'm actually sort of expecting a Sprint and T-Mobile combination. I've been happy with Sprint via Virgin Mobile but would prefer them to move to GSM and amp up their offerings, coverage, and user base.
I was grudgingly considering a move to AT&T for an iPhone, primarily because my wife uses them so I could get the family rate. But with the recent iPhone Sprint rumors I've decided to wait; I expect that with Sprint I can pay just a little more for the same service and not have to give any money to warrantless-wiretappers.
It doesn't hurt to be nice.
Hey! We totally pinkie-swear that if we are given nigh-unlimited power to bleed the nation's wireless users dry, we promise to build a couple of towers in rural nofuckingwhereistan and call it "Universal Access"! C'mon, it's a totally reasonable trade!
Does doublespeak count against my 'anytime' minutes; but at twice the normal rate, or do I need to upgrade my plan?
Their "5000 jobs" claim seems to belong in the same pile as the "Give us $100 million to build a stadium, and we promise to hire 6 hotdog vendors and a janitorial team!" arguments that get trotted out every time a pro sports team shakes down a municipality to build their business infrastructure for them... These sorts of things are so openly cynical and insultingly paltry that I'm honestly not sure why anybody even bothers pretending...
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."
Wrong.
AT&T Wireless had a TDMA and GSM network before Cingular. AT&T went from AMPS to TDMA to GSM. You might be thinking of US Cellular and Cricket when customer regions were swapped due to divestments. I was there.
The ideal outcome is that Sprint dumps it's CDMA network post-haste and adopts the GSM-LTE standards. Reason? iPhone. T-Mobile gets the iPhone next. The entire reason Sprint is in such a hurting position right now is because they have no plan, and are seeking dead-end solutions like Clearwire.
The DOJ, should they bring down the ban-hammer, should tell the American cellular providers to adopt a common network (LTE next generation), all phones are to be carrier unlocked and usable on any network. If they want competition, they need to break down the anti-competitive barriers first. Incompatible frequencies, technologies and subsidies are what keeps the mobile phone carriers customers from churn.
The one thing Sprint could possibly bring to the table in a merger with T-Mobile if they didn't completely botch it is (theoretical) compatibility with international UMTS frequencies.
International UMTS uses 1900MHz for uplink, and 2100MHz for downlink (give or take a few MHz)
T-Mobile bought 1700 & 2100Mhz licenses during the AWS auction. They have very little 1900MHz spectrum, and it's all used by GSM voice and 2/2.5G data.
With a little creativity, Sprint could start repurposing 1900MHz spectrum currently used for EVDO to UMTS uplinks, and start shipping phones like the ones used in Canada that use CDMA for voice, but UMTS for 3G data. There wouldn't be any compatibility problem with pre-existing T-Mobile UMTS phones, because AFAIK, every UMTS phone ever sold by T-Mobile can do 1900/2100 UMTS in addition to 1700/2100 UMTS. There might be some temporary bandwidth crunches for EVDO, but if they got their act together quickly and shifted all new Android phones to 1900/2100 UMTS (falling back to 1900MHz EVDO only where 1900/2100 UMTS didn't exist), and simultaneously improved their 4G network options, the problem would largely solve itself within a year or two as heavy data users dumped their old phones and bought new ones within a year or two anyway.
The problem is, Sprint completely fucked up the merger with Nextel, which kind of casts doubt on their ability to merge a 1900MHz CDMA2000 network with a 1900MHz legacy GSM network, a 1700/2100MHz UMTS network, and a 2.6GHz WiMax (soon to be LTE) network. If they could manage to avoid completely screwing up T-Mobile's existing network in the process, it would put SprinT-mobile in a unique position among American carriers -- they'd be the one carrier capable of providing UMTS on international frequencies within the United States. For that reason, I'd prefer they both remain separate. But if anyone has to merge, Sprint and T-Mobile would probably be the least of all evils. Especially if Google ended up buying both of them to keep Sprint from physically screwing up T-mobile's network along the way.
More like they think they are above the law, and to a large degree, they are correct. :(
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.
The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.
I have their evidence. Prior to the announcement of the merger, T-mobile offered a number of no contract plans that were slightly cheaper than 2-year contractual obligation plans, thus allowing the customer more freedom to pick a carrier that suited their needs based on changing lifestyles and habits over a two year period. After the proposed merger was announced, all of the no-contract plans were eliminated, and I have three recorded conversations with T-mobile customer service representatives explicitly saying that the no-contract plans were dropped in an effort to lock users into using T-mobile's services for two years.
Explain to me how moving a customer from a no-contract plan that allows them to switch carriers on a whim, to a 2 year contractually obligated plan that locks the customer to one carrier for two years increase competition AT&T&T(-Mobile).
Motorcycles, Robots, Space Gossip and More!
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.
I'm pretty sure Nextel was iDEN, not GSM.
this is my sig
Deutsche Telekom didn't want to put more money into T-Mobile because they're investing it all in their LTE buildout in Europe. T-Mobile is in bad shape because they need to build a 4g network to keep up with every one else, but they didn't buy any spectrum to do it. Whether the $3b goes to T-Mobile or not, DT has no reason to keep the spectrum. So T-Mobile will get the spectrum they need for a 4g network, they just need cash to build it.
DT could look at it in a number of ways;
they find another buyer for T-Mobile as it sits (but they won't get the premium price AT&T was offering),
they could look at the $3b as found money and use it to build T-Mobile's 4g network (making them more profitable and a better candidate for sale),
or they could keep the $3b and tell T-Mobile to find their own money to utilize the new spectrum (possibly pissing away their investment as T-Mobile falls farther behind).
Another day, another update to a Google android app.
Nextel used IDEN which is not GSM. It uses SIM cards, but it is an incompatible standard.
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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.
I've already seen rants about the "free market" on other sites.
Here is something that people need to know: Adam Smith 1) didn't figure huge corporations into his thinking because he thought they could never be a force in the marketplace and 2) didn't believe that monopolies were a good thing so would probably not be hostile to breaking them up for the good of the market.
People that spout about the free market solving ALL problems are believers in faith-based economics...
Sprint's getting an iPhone anyway in September.
Peter predicted that you would "deliberately forget" creation 2000 years ago...