Government Files to Block AT&T's T-Mobile Acquisition
The U.S. government has filed to block AT&T's attempt to acquire rival T-Mobile.
You might remember back in March when AT&T announced plans to acquire T-Mobile in a deal worth $39 billion in cash and stocks. As per the agreement, Deutsche Telecom would receive an equity stake in AT&T that would give the German company an ownership interest in AT&T of approximately 8 percent. A Deutsche Telekom rep would also take up residence on the AT&T board of directors. As with all acquisitions, the announcement from AT&T included a line or two about the deal being subject to usual regulatory checks. While that's not usually a problem for the majority of deals, this one is a big fish that would see two of the nation's top carriers become one. Problem? Yes. Today, the U.S. government threw a spanner in the works with a filing aimed to block the deal.
Bloomberg reports that the U.S. Department of Justice is suing to block the deal on the grounds that if it went ahead, it would "substantially lessen competition" and violate antitrust laws.
"We conducted dozens of interviews of customers and competitors, and we reviewed more than 1 million AT&T and T-Mobile documents," the Department of Justice said in a prepared statement today. "The conclusion we reached was clear. Any way you look at this transaction, it is anticompetitive. Our action today seeks to ensure that our nation enjoys the competitive wireless industry it deserves."
The DOJ went on to praise T-Mobile for its innovation and ability to generate competition in the mobile space, highlighting the fact that T-Mobile was the first to roll out HSPA+ and the first with Android.
"Unless this merger is blocked, competition and innovation in the mobile wireless market, in the form of low prices and innovative wireless handsets, operating systems, and calling plans, will be diminished—and consumers will suffer," the Department added.
Of course, this is bad news for AT&T (the company's stock is down roughly 4.5% at time of writing). AT&T this afternoon released a statement regarding the suit and indicated that it had no idea the DoJ was thinking of putting the breaks on its $40 billion deal.
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.
Read the full complaint from the Deparment of Justice here (PDF) or check out the department's press briefing here.
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I have T-Mobile right now... Please don't take it away!
Purely a political move by the Obama regime. T Mobile is a third place network. Sprint will be next to get eaten up. This merger will happen one way or another. Its inevitable. Oh and Iphone 5 on AT&T ftw. Unlimited data plan - check..... Verizon - capped.
I have T-Mobile right now... Please don't take it away!
There still would be T-Mobile but it would be ran by AT&T. I could be wrong but you wouldnt have to pay for a whole new 2 year with AT&T or anything.
I have AT&T and i really was hoping it went through but with this news i really dont know anymore.
With more competitors comes more competition, normally, meaning lower prices. My instinct tells me ATT acquiring Tmobile wont be a good thing..
Purely a political move by the Obama regime. T Mobile is a third place network. Sprint will be next to get eaten up. This merger will happen one way or another. Its inevitable. Oh and Iphone 5 on AT&T ftw. Unlimited data plan - check..... Verizon - capped.
Cute comment but.....
AT&T does not offer unlimited data any more, just like Verizon does not. Both are capped unless you are grandfathered in. The "obama regime" has nothing to do with it. Can you please explain how having less companies competing for business is better for the consumer?
I have heard of android and apple fanboys....but this is my first AT&T fanboy.....
I don't see a duopoly as a reason for DOJ to step in. It's not like Verizon wouldn't compete with the unified ATT and T-Mobile company.
It shouldn't be ATT's fault that Verizon exists. This argument should be whether or not Verizon can stay competitive against ATT instead of whether other companies can stay competitive with the TWO of them.
If they're really aiming to make sure 2 companies cannot be dominate in a market, how come they haven't stepped in on:
UFC (purchased Strikeforce), monopoly in the MMA sport
Nvidia and ATI (only 2 mainstream graphics entities)
Intel and AMD
etc
etc
etc
This decision makes no sense. As long as there is an equally strong competitor, DOJ needs to step back and let the market work.
After the meger there wouldn't be a T-Mobile from what I understand. The change might not be immediate but eventually everyone would be merged into AT&T. The infrastructure would be combined so that both AT&T and current T-Mobile uses would be using the same network.
I don't see a duopoly as a reason for DOJ to step in. It's not like Verizon wouldn't compete with the unified ATT and T-Mobile company.It shouldn't be ATT's fault that Verizon exists. This argument should be whether or not Verizon can stay competitive against ATT instead of whether other companies can stay competitive with the TWO of them.If they're really aiming to make sure 2 companies cannot be dominate in a market, how come they haven't stepped in on:UFC (purchased Strikeforce), monopoly in the MMA sportNvidia and ATI (only 2 mainstream graphics entities)Intel and AMDetcetcetcThis decision makes no sense. As long as there is an equally strong competitor, DOJ needs to step back and let the market work.
If left alone businesses will do what is good for business which is never good for the customer/voter/tax payer/citizen. The government is there to protect the customer and their rights. You can call it socialism if you want but when done right the only people it hurts are the elite top of the top rich people, just about everyone (aka 99.99%) benefits considerably - and the rich can still be rich by the way. Or should we just go "hands off" let telco's end up like the banks and have to throw nearly a trillion dollars at them to clean up their mess?
Wasn't there a story a few days back about how Verizon was petitioning the White House to do something about Apple patent lawsuits against Android? I don't know if that will happen but at least the government helped them out with this.
I don't see a duopoly as a reason for DOJ to step in. It's not like Verizon wouldn't compete with the unified ATT and T-Mobile company.It shouldn't be ATT's fault that Verizon exists. This argument should be whether or not Verizon can stay competitive against ATT instead of whether other companies can stay competitive with the TWO of them.If they're really aiming to make sure 2 companies cannot be dominate in a market, how come they haven't stepped in on:UFC (purchased Strikeforce), monopoly in the MMA sportNvidia and ATI (only 2 mainstream graphics entities)Intel and AMDetcetcetcThis decision makes no sense. As long as there is an equally strong competitor, DOJ needs to step back and let the market work.
ATT and T-Mobile GSM
Verzion and Sprint CDMA
ATT would create a monopoly over GSM phones in the US, and considering that most phones outside of the US are GSM, I wouldn't like to be stuck with ATT if I acquire a phone overseas.
+1 for the gov.
Its Trash mobile, let AT&T have them and become a player in 4G, make Verizon lower their prices, make sprint the new $hity 3rd leader, and a newcomer will step up fill the last place provider
and btw, if this merger gets blocked, hasnt poor trash mobile already lost like 200 trillion subscribers since this talk started, sux to be them again
Didn't Verizon acquire Alltel a while ago and the only concession they had to make was giving the Mid-Western Alltel branch to ATT?
Can you please explain how having less companies competing for business is better for the consumer?
There would be less towers needed in an area for coverage. The problem is that businesses are greedy and generally less competition means consumers end up paying more. I wouldn't have a problem with a monopoly if they'd keep the prices low.
The problem here is that it's a lot like electrical or water companies. There's no reason to have duplicate network infrastructure, and there's only so much "space" for wireless data. It would be a lot more efficient to only have one company. Of course, a single company would charge whatever it wanted to, but it would be more efficient than multiple companies doing the exact same thing. How many places have two, three, or more sets of water pipes to the same houses? It doesn't make sense there, and likewise makes little sense for wireless carriers.
Woot. Go sneak that shi!t now Sprint. Who cares if you use two completely different technologies that would make it even more costly to combine. I want the option to use sim cards!
It is sad to think that AT&T does little to nothing to improve their cell phone reception or coverage, unless it means purchasing another company.
If they were able to purchase T-Mobile, it wouldn't mean better coverage, because they would consolidate the cell towers and close stores to increase their profit margins. This is simply an attempt to get rid of the competition and acquire T-Mobile's customers.
It's all about the $$$$$
Thank goodness. I would hate for less options to be available. AT&T is already greedy enough and a bunch of deceitful liars.
The problem here is that it's a lot like electrical or water companies. There's no reason to have duplicate network infrastructure, and there's only so much "space" for wireless data. It would be a lot more efficient to only have one company. Of course, a single company would charge whatever it wanted to, but it would be more efficient than multiple companies doing the exact same thing. How many places have two, three, or more sets of water pipes to the same houses? It doesn't make sense there, and likewise makes little sense for wireless carriers.
There is nothing stopping companies from leasing tower space from other people/companies....which already happens most of the time by the way. You think Verizon owns all its towers? No, it just owns the equipment hanging off of them, right next to other telco's equipment because both of those companies are leasing tower space off of a 3rd company
Fantastic, well done DoJ. They just need to stop this merger period. Sure Verizon is the one lobbying for this, but who cares, this merger does not need to happen.
Purely a political move by the Obama regime. T Mobile is a third place network. Sprint will be next to get eaten up. This merger will happen one way or another. Its inevitable. Oh and Iphone 5 on AT&T ftw. Unlimited data plan - check..... Verizon - capped.
Have you noticed that anytime Obama gets it right it's a political move? Well, I hope Obama keeps making political moves. I'm more inclined to think the decision was made more by Verizon lobbying against the merger. Moreover , honestly, the president has way more stuff on his plate than to worry about if ATT and T-Mobile merger. The President in the US is more of an executive than someone who is involved with every single decision.
If left alone businesses will do what is good for business which is never good for the customer/voter/tax payer/citizen. The government is there to protect the customer and their rights. You can call it socialism if you want but when done right the only people it hurts are the elite top of the top rich people, just about everyone (aka 99.99%) benefits considerably - and the rich can still be rich by the way. Or should we just go "hands off" let telco's end up like the banks and have to throw nearly a trillion dollars at them to clean up their mess?
Exactly, people have this warped sense of reality where they think. that capitalism is good for the country or greed is good for the country. Capitalism is neither good or bad, Capitalism exists to make money for an individual. Sometimes along that way it helps more often than not it hurts the country in this day and age. Capitalism is good for the individual but not neccessarily good for the collective. The sooner people really this, I think the better off they will be, they won't be shocked when corporations outsource, make record profits and don't hire, or simply just out right fxk consumers. Maybe, then, you'll stop hearing people say corporations need more benefits, subsidies for private jets, tax breaks and so on ... they can take care of themselves just fine, the rich have one thing to worry about that is generally revolution putting themselves in the best position to maintain and acquire more wealth is not usually something they have to worry about, or need the peasants to do for them.
http://www.youtube.com/watch?v=rsCp-1hgfxI
Purely a political move by the Obama regime. T Mobile is a third place network. Sprint will be next to get eaten up. This merger will happen one way or another. Its inevitable. Oh and Iphone 5 on AT&T ftw. Unlimited data plan - check..... Verizon - capped.
Obvious troll is obvious!
Purely a political move by the Obama regime. T Mobile is a third place network. Sprint will be next to get eaten up. This merger will happen one way or another. Its inevitable. Oh and Iphone 5 on AT&T ftw. Unlimited data plan - check..... Verizon - capped.
Nowhere in the article is Obama's name mentioned. The government is more than just Obama. This could turn into an antitrust issue if ATT acquires Tmobile and I think the government sees that, and that's why they are trying to block it. I don't like Obama either, but there is no need to make things up.
I don't see a duopoly as a reason for DOJ to step in. It's not like Verizon wouldn't compete with the unified ATT and T-Mobile company.It shouldn't be ATT's fault that Verizon exists. This argument should be whether or not Verizon can stay competitive against ATT instead of whether other companies can stay competitive with the TWO of them.If they're really aiming to make sure 2 companies cannot be dominate in a market, how come they haven't stepped in on:UFC (purchased Strikeforce), monopoly in the MMA sportNvidia and ATI (only 2 mainstream graphics entities)Intel and AMDetcetcetcThis decision makes no sense. As long as there is an equally strong competitor, DOJ needs to step back and let the market work.
ATI no longer exists.... nVidia and AMD aren't the only mainstream graphics entities. Intel also produces mainstream graphics chips, as does S3.
Intel and AMD aren't the only processor makers. VIA dominates the embedded market and ARM dominates the mobile market.
UFC is considered "sports entertainment"...same as WWE, ECW and WCW, so no monopoly.
Also, AT&T has a long standing history or anti-trust and anti-competitive behavior. I'm guessing you're probably rather young based on your post. It is AT&T's fault that Verizon exists. Verizon is among the side-effects of AT&T being given free reign in the communications market. AT&T/Bell Labs faced anti-trust suits in the past which resulted in Bell Labs being split up into multiple companies. Bell South, Pacific Bell, Bell Atlantic, Central Bell, etc.....AT&T/Bell Labs was referred to as "Ma' Bell" because it completely dominated the communications market. AT&T/Bell Labs has been actively trying to re-establish their prior market dominance since the DoJ forced the company split-up.
Lucent Technologies, a former wholly owned subsidiary of AT&T/Bell Labs, spun off a cellular communications company named "360 Communications". After becoming an independent subsidiary, they sold "360 Communications", which then became Alltel. Alltel was later purchased by Verizon. AT&T later started "Suncom", which was later sold to Bell South and merged with Bell South cellular communications division Cingular Wireless. Bell South (SBC), purchased AT&T from Bell Labs. Bell South later merged with Southwestern Bell and formally changed the company name to AT&T and Cingular became AT&T Wireless. (That's 3 of the "7 baby bells" recombined as Southern Bell and South Central Bell had already combined to create Bell South). Bell Atlantic merged with NYNEX (that leaves 2 "baby bells" independent). Bell Atlantic later merged with MCI (after AT&T successfully strangled the company into bankruptcy) and the combined company became known as Verizon TeleCommunications. This is all directly related to AT&T's history of market domination and anti-competitive actions. AT&T is actively making attempts to rebuild the market dominating business they were forced to divest in 1984....this is not, in any way, beneficial to consumers.
Good
Now what would really benefit the consumer is if Sprint and T-mobile merged, then offered phones that worked on both networks (CDMA & GSM).
that's 1 more monkey wrench in the equation. now can we make this final!
ATI no longer exists.... nVidia and AMD aren't the only mainstream graphics entities. Intel also produces mainstream graphics chips, as does S3.Intel and AMD aren't the only processor makers. VIA dominates the embedded market and ARM dominates the mobile market.UFC is considered "sports entertainment"...same as WWE, ECW and WCW, so no monopoly.Also, AT&T has a long standing history or anti-trust and anti-competitive behavior. I'm guessing you're probably rather young based on your post. It is AT&T's fault that Verizon exists. Verizon is among the side-effects of AT&T being given free reign in the communications market. AT&T/Bell Labs faced anti-trust suits in the past which resulted in Bell Labs being split up into multiple companies. Bell South, Pacific Bell, Bell Atlantic, Central Bell, etc.....AT&T/Bell Labs was referred to as "Ma' Bell" because it completely dominated the communications market. AT&T/Bell Labs has been actively trying to re-establish their prior market dominance since the DoJ forced the company split-up.Lucent Technologies, a former wholly owned subsidiary of AT&T/Bell Labs, spun off a cellular communications company named "360 Communications". After becoming an independent subsidiary, they sold "360 Communications", which then became Alltel. Alltel was later purchased by Verizon. AT&T later started "Suncom", which was later sold to Bell South and merged with Bell South cellular communications division Cingular Wireless. Bell South (SBC), purchased AT&T from Bell Labs. Bell South later merged with Southwestern Bell and formally changed the company name to AT&T and Cingular became AT&T Wireless. (That's 3 of the "7 baby bells" recombined as Southern Bell and South Central Bell had already combined to create Bell South). Bell Atlantic merged with NYNEX (that leaves 2 "baby bells" independent). Bell Atlantic later merged with MCI (after AT&T successfully strangled the company into bankruptcy) and the combined company became known as Verizon TeleCommunications. This is all directly related to AT&T's history of market domination and anti-competitive actions. AT&T is actively making attempts to rebuild the market dominating business they were forced to divest in 1984....this is not, in any way, beneficial to consumers.
That is quite possibly the best breakdown of what 'Ma Bell' Was spliced into and is now reforming into the 'Destructocom' to be named 'Ma Cell'