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

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

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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Companies: at&t, t-mobile

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Comments on “Surprise: Justice Department Says AT&T/T-Mobile Merger Would Be Anticompetitive”

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Anonymous Coward says:

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?

Anonymous Coward says:

Re: 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.

Anonymous Coward says:

Re: 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!

Someantimalwareguy (profile) says:

Re: 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…

Someantimalwareguy (profile) says:

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…

AW says:

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.

Anonymous Coward says:

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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