Surprise: Justice Department Says AT&T/T-Mobile Merger Would Be Anticompetitive

from the did-not-see-that-coming dept

Wed, Aug 31st 2011 12:55pm — Mike Masnick

Wow! Well, this is a bit of a surprise. The US government, who had been rubber stamping various mergers for a while now, especially in the telco/broadband space, may finally have had enough. The Justice Department has officially moved to block the merger, technically filing a lawsuit against it on antitrust grounds. From the beginning, most people had assumed that no one would block the merger, though in the last few weeks there were definite rumblings suggesting that the tides were shifting. Even so, having the DOJ jump in with a lawsuit is a surprise. AT&T insists that the move was a surprise to it as well, which is also a bit odd. Typically, the DOJ tends to telegraph this kind of move, in order to either pre-emptively end the merger attempt or to get much greater concessions. It's not entirely clear what pushed the DOJ off the fence on this one, but AT&T accidentally revealing that it had lied about the key reasons for the merger couldn't have helped...

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Filed Under: anticompetitive, antitrust, merger
Companies: at&t, t-mobile

31 Comments

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The Incoherent One (profile), 31 Aug 2011 @ 1:09pm

And suddenly my day is actually a little bit better.
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A Guy (profile), 31 Aug 2011 @ 1:10pm

WOW. I am shocked. Did AT&T forget to pay someone off? Or, maybe the administration decided it really wouldn't be good to approve a merger that would lay off tens of thousands of people in the current economic climate. Either way, this is good news for everyone that isn't AT&T and T-Mobile.
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The Incoherent One (profile), 31 Aug 2011 @ 1:12pm

Re:
"Did AT&T forget to pay someone off"

No, Im sure they payed off many people. Problem is they either forgot one, or they payed the wrong people.
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Ninja (profile), 31 Aug 2011 @ 1:17pm

This shouldn't come as a surprise. It's like DUH, it IS anti-competitive. Every1 can see it.

But it still surprises us to see the Government doing sane and sensible things.

Still, kudos for DOJ on this one!
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Anonymous Coward, 31 Aug 2011 @ 1:19pm

Every once in a while they do the right thing. More often than not this doesn't occur.

It is high time that the pendulum swings the other way. Too big to fail means it should be broken up. Somehow we aren't seeing that.

Even this small victory is an improvement. However AT&T is now back where it was before the breakup that resulted in the baby Bells. Isn't it time to do the break up again?
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Anonymous Coward, 31 Aug 2011 @ 1:25pm

Re:
Even blind squirrels find acorns once in a while!
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Jeffrey Nonken (profile), 31 Aug 2011 @ 1:37pm

*dies from shock*

I'm glad to see this. I want to keep my T-Mobile customer service which, while not perfect, beats the crap out of AT&T's.
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Joshua Perry, 31 Aug 2011 @ 1:40pm

The DOJ is filing suit to provide favorable terms to consumers, this will go through.
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Anonymous Coward, 31 Aug 2011 @ 1:43pm

Re:
At the rate T-Mobile is bleeding subscribers you should probably start looking for another provider.

The merger not happening doesn't really matter, T-Mobile is dying off and the other large Telco's will move in and fill the void anyway. It's likely why the DOJ blocked it, because at the end of the day it won't change anything.
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Anonymous Coward, 31 Aug 2011 @ 1:45pm

Re:
Woot Woot goes the nets
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Glen, 31 Aug 2011 @ 1:45pm

I will be curious to see it is for more concessions. I hope not. This is just a bad idea.

What I have been hearing from the defenders of the merger now is that if there is no merger, T-Mobile will go bankrupt. Are they grasping as straws because I have never heard of this in the first place.
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Berenerd (profile), 31 Aug 2011 @ 1:46pm

I don't think so....
I don't think AT&T was really caught off guard. They also reported today that if the merger is approved they would add something like 5000 (or 50k) jobs by bringing them back from over seas...I would link to the CNET article but they have updated it from the looks to point out this stuff about the DOJ.
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DCX2, 31 Aug 2011 @ 1:48pm

Re: Re:
"How do I know you're the last cop I'm gonna have to grease?"
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Greevar (profile), 31 Aug 2011 @ 1:50pm

My pants...
I have to change them!
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Squirrel Brains (profile), 31 Aug 2011 @ 1:53pm

Re: Re:
Hey now.
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Anonymous Coward, 31 Aug 2011 @ 1:54pm

Wow...
Our government actually does have someone in it with some common sense! It's a miracle!
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Anonymous Coward, 31 Aug 2011 @ 2:08pm

Re:
I think somebody payed some more money to see it blocked.
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Joe Publius (profile), 31 Aug 2011 @ 2:15pm

Re:
However AT&T is now back where it was before the breakup that resulted in the baby Bells. Isn't it time to do the break up again?

I've been thinking the same exact thing ever since Alltel was taken over by AT&T for my state then saw what they were charging for data plans.
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Anonymous Coward, 31 Aug 2011 @ 2:23pm

Re: Re:
The merger not happening doesn't really matter, T-Mobile is dying off and the other large Telco's will move in and fill the void anyway. It's likely why the DOJ blocked it, because at the end of the day it won't change anything.
Nice try at deflecting the joy we all feel at this move by the DOJ. The problem here is that T-Mob was bleeding subs BECAUSE of the merger and has actually been maing a profit in the billions.

This fantasy that T-Mob is in fact dying is just that, a fantasy perpetuated in the press by those who want to eliminate the disruptive, low cost carrier alternative that it has actually been all along.

The death of this deal will mean at least 3 billion in T-mob/DT's coffers and the expanded spectrum they needed to continue to compete with AT&T, Verizon Wireless, and Sprint. In other words, the death of this deal is a boon to the entire industry, more jobs going forward, lower prices for consumers, greater innovation in products/services, and better overall quality of service.

I couldn't be happier about the news - go DOJ!
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Someantimalwareguy (profile), 31 Aug 2011 @ 2:30pm

Re:
...Are they grasping as straws because I have never heard of this in the first place.
Yes, it is simply not true as T-Mob has been very profitable; not as profitable as the other majors, but still in the single digit billions.

The death of this merger will in fact give T-Mob/DT the resources they need to effectively compete and gain ground due in large part to the spectrum AT&T will have to give them along with the 3 billion in cash. This is going to make the market stronger and will drive down costs to consumers while forcing the majors to compete aggressively to retain their subs.

It's a win for all except AT&T...
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Someantimalwareguy (profile), 31 Aug 2011 @ 2:37pm

Re: I don't think so....
Those 5,000 jobs are simply low paying call center positions they would simply send back overseas once the dust settled and no one was paying attention. The 50,000 figure is the actual total number of jobs that would be eliminated through redundancies after the deal went through.

AT&T is simply trying to hide that fact by dangling the "jobs" carrot in front of the government who by now is no longer buying or drinking the cool-aide...
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Jay Flatiron, 31 Aug 2011 @ 3:17pm

Mike I love you but did you really just imply that the DOJ should have telegraphed AT&T? No one? Bueller?
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Korben (profile), 31 Aug 2011 @ 3:44pm

Elephant in the Room
I can't dismiss the fact that I am actually surprised that the DOJ stepped in to point out that not only is an elephant in the room, but that it's new robes are in fact invisible.

Any person not blinded by their own greed can see that this is not a good deal. I am glad that that DOJ
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Jesse (profile), 31 Aug 2011 @ 4:43pm

I can never tell when you mean "Surprise:" sarcastically or genuinely, from the headlines that is.
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ScytheNoire, 31 Aug 2011 @ 6:39pm

Well Duh
AT&T should reply to the DOJ "Well duh, that's the entire point. Get rid of competition so you can give worse service while charging more money. That's what we do in North America."
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AW (profile), 31 Aug 2011 @ 7:40pm

I am way too skeptical about this to be elated. The track record of the current and former administrations elicits a need to temper our joy until all the moves by all sides have played out. As much as I would love to believe that functions of the government have started to be restored, there is a lot of money paid to prevent just this kind of legal action. Perhaps we have reached the requisite tipping point to where the public starts reasserting our rights, but the disaffected state of so many and the need of involvement from those in the largest portions of our society makes me believe we still have farther to go before sanity is restored.
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Daniel, 31 Aug 2011 @ 10:31pm

It's ok, if Tmo starts to go bankrupt Google can always buy them, and its never anti-competitive if it's Google!
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The Incoherent One (profile), 1 Sep 2011 @ 8:03am

Re:
In the end of this the consumer loses regardless of the concessions which are gained by this. At&t has a history of doing this. They are like the T1000. You break it all apart and overtime it reassembles itself.
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Anonymous Coward, 1 Sep 2011 @ 8:08am

Chess strategy
If the Obama administration doesn't first move to block the deal then they can't get a better sweetener from AT&T.

If you think this isn't a 100% politically-driven move by Obama's DOJ (it is important to remember they aren't going to pull a move like this w/o O's directive to do so) then you are dreaming. Obama doesn't do ANYTHING without a deliberate political motive.

I'd bet $100 that DOJ will poo-poo the deal until they get some more grease from AT&T's lobbyists. Don't forget that AT&T is headquartered in Rick Perry's home state. If you think that is irrelevant then you're still dreaming.
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Just Ice, 1 Sep 2011 @ 8:49am

Antitrust?
Where was this Dept. when ALL major news organizations (and movies, radio...) were acquired by five organizations? Now, we do not have news (noose, yes... but no news), but we do have propaganda, and lots of it.
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Austin (profile), 6 Sep 2011 @ 12:35am

Thank You DOJ!
As a happy T-Mobile customer with unlimited bandwidth on my data plan, I would love to personally thank the DoJ for blocking this merger. I'm not a lobbyist, so I can't afford to send you to Napa Valley for the weekend, but please let me know where I can mail one of you a decent bottle of something alcoholic!
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