AT&T, T-Mobile US merger opposed on anti-trust grounds

The United States Department of Justice has filed its opposition to the AT&T - T-Mobile US merger on anti-trust grounds.

AT&T’s elimination of T-Mobile as an independent low- priced rival would remove a significant competitive force from the market

AT&T was pursuing the merger in an attempt to get T-Mobile's AWS spectrum to use for a bigger, better LTE 4G roll out.

(Probably smart that T-Mobile wasn't waiting on AT&T to get iPhone 5.)

This story is still developing and we'll update with more information as it comes in.

[Bloomberg, thanks Jack!]

Have something to say about this story? Share your comments below! Need help with something else? Submit your question!

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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AT&T, T-Mobile US merger opposed on anti-trust grounds

26 Comments

"At a news conference Wednesday, Deputy Attorney General James Cole said the combination would result in tens of millions of consumers facing higher prices, fewer choices and lower quality products."
Perhaps fewer choices, but the others are debatable.

So if T-mobile customers want different service they can go to ATT/Verizon, etc.
How does ATT improve TM service by buying them since they can go to ATT now. It will only remove a low cost option.
Is "good service" a code for cost your a$$ more money. What drives costs down--Corp good will? Don't see that happening.

Are you some kind of retard? Less competition in the marketplace leads to less innovation and higher prices. That's economics 101, Comrad.

Doesn't Virgin use Sprint service? Which would really be a closer to rebranding, even if they have separate cust. serv, etc.
And Both are more pay as you go services which is a smaller segment.

Alltel was the ONLY other legitimate (Reads "able to actually make a call on the service") option besides Verizon in many rural areas. I know because I used to live in one, as well as many of my friends. Of course, not as big of a deal in larger areas, but in rural areas like the one I used to live in, that left Verizon as the ONLY option, which to me is far worse than having one less major carrier nationally. Verizon's shady billing was something I had hoped to avoid by being on Alltel, and thankfully, I no longer live in an area where they are the only option, thus the switch to AT&T. I personally was looking forward to the expanded service from the merger. And if it somehow made it more expensive, I could always become a trendy club savvy hipster, pour on the Drakkar Noir, grab me a couple of shirts from the American Eagle, and switch to Virgin Mobile.

AT&T claimed they were pursuing the merger in an attempt to get T-Mobile's spectrum, but a leaked internal email indicates they were not. [link], and that ATT's primary motivation was to reduce competition in the space.

Is there a hidden part of this filing that I am missing? Where does AT&T say they are looking to reduce competition?
IMO, I see a business decision that was made. The choice was pay $3.8 billion and all we get is LTE coverage to more people; who may not buy the service. Or acquire TMobile and get more LTE coverage, more cell sites that are already built, more spectrum across the board, and down the road an overall healthier network.
Now, I personally think the DOJ is right to block this. But AT&T is just as right to attempt to do what they think is right for their company and share holders.
It's nothing person, it's just business. Why does everyone read into everything and always come to the "their EVIL" conclusion?

Evil? Who said anything about evil? Put words in somebody else's mouth, not mine.
And then read the summary again, or, better yet, read the original letter. AT&T's stated reason -- to build out its network coverage through acquiring T-Mobile -- just does not stand up to scrutiny.
In addition to the timing problems, AT&T's own documents suggest they know they can build out an LTE network for far less than the purchase of T-Mobile, especially considering T-Mobile's is strong where AT&T is strong, and weak where AT&T is weak -- they would have to build out those areas themselves, anyways.
It is not a small difference, either -- AT&T is spending ten times on the purchase of T-Mobile what they would on infrastructure buildout. If the deal does not go through, another site suggests [link] AT&T is guaranteeing DT up to $7 billion -- almost twice as much as the entire infrastructure investment would cost were they to go solo.
Of course this is just a business decision. Given the above, however, AT&T's stated story just does not add up, from a business perspective. Given the 10x price difference and the almost 2x failure guarantee, in the absence of any more convincing story from AT&T that the elimination of a competitor itself is the only reason that could possibly justify those kind of outlays.
I could be wrong, of course, but at the very least the DoJ is acting entirely appropriately to investigate what those other reasons may be, and to block them if killing competition appears high on the list.

I think everyone reads into this way too much. For $39 billion AT&T would not just get to complete the build out of LTE. But the increased spectrum and all that comes with it will increase network capacity overall. AT&T and Tmobile have similar coverage in many areas. But Tmobile does not have the network demands that AT&T suffers. They would be getting much more for that money, their board thought it was the better investment. The $7 billion that goes to DT in the event of a failed buyout is also not new for deals of this nature.
The DOJ isn't saying that they found AT&T's dirty little secret was really only to eliminate competition. They are saying they disagree with the case AT&T presented and that the resulting loss of competition would be worse for consumers than what AT&T has proposed.
I agree with the DOJ's decision but I still see why AT&T proposed the idea. If their only motive was really to eliminate Tmobile, then...well...now they've been sued. But I don't buy that.

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," said Deputy Attorney General James M. Cole.
I was pretty pissed after I read this. Lower quality products? Are you freaking kidding me? another stupid statement by our stupid government. ATT has HIGHER quality products than Tmobile already right now! you dufus!!!! I don't see any iPhones on TMO. Not to mention dozens of other better phones. Ands ATT has WAY more towers and coverage. I don't get their stupid argument.
This whole thing stinks of DoJ kissing Sprint/VZW's ass. Ya let's make it harder for the GSM carriers to compete with those 2 (crappy service) carriers. Geez. I don't ever plan on switching from ATT and this news just sucks since getting LTE on a good carrier that doesn't suck will now take longer. Thanks DoJ you fools.

I was throwing some hard sarcasm in my statements but yes thank you we all realize ATT has a customer service perception dragging them down. However if you look at the statements made by the current owner of Tmobile about them no longer willing to invest in the US TMO business and the bleeding of customers you'll understand that in fact Tmobile NEEDS ATT to buy them up to save that network from failing. It's stated they made bad prior business decisions and the network is not viable in the long run. I hope the DoJ also considers those facts in the hearings coming soon because whether everybody likes it or not ATT and TMO need each other in the long run. With tmobiles great customer care and ATT's long term technology and business plans they would make a great competitor for VZW. Otherwise, we ATT users will have a long hard road of getting exactly what we want from our service.
I can see ATT "righting the ship" so to speak on their own without Tmobile but it will take greater time and some serious out of the box business decisions. ATT needs to drop LTE on the US like a MF'er with 100% network coverage and spend every penny they can to get it to every customer. That would be huge in changing perception. And lastly, ATT needs a complete overhaul of their customer care system. Although I'm a happy customer, I can see their faults and I know if I was running that division it would turned upside down within weeks to become a true standard in customer satisfaction.

I consider myself very pro capitalism. That being said I'm all for this move by the DOJ. As much as I hate what they have done on other issues. This one smacks a right in their wheel house. This has been and always will be about ATT eliminating a major competitor in the wireless industry. What ATT has said was all just a pack of lies and has been shown to be. Those 5K+ jobs to bring back is really just closing down the departments overseas. The calls then get redirected to the current departments in ATT. Costs will def go up either way. It was shown for that spectrum enhancement that they are paying a ridiculous premium for. Could be done for a 10th of the price they are paying. As far a choice of devices. If it wasn't for multiple carriers we would still be using bag phones. ATT got caught trying to pull a fast one on everyone. Sadly that money they spends buys a lot of pull down in DC.

The difference is that in some rural markets Alltel and Verizon were the ONLY options that could even make a phone call. I know of no markets or areas where that will happen with AT&T and TMobile being the only 2 providers that are available. TMobile has worse rural coverage than AT&T right now. So I doubt there are any markets where this would happen.

Renee Ritche. Will u hip out ur big Canadian cock and masterbate for me and cum all over my titties. Thanks :)

You forget that before it was Verizon, it was Bell Atlantic. BA then acquired NYNEX (the largest provider in the NE), and then acquired national carrier GTE before renaming themselves, Verizon. They were doing exactly what AT&T is trying to do now - become the largest provider in America.

You are delusional if you think this merger would be good for customers. Do you really think AT&T, a company that has the lowest-ranked wireless network, is going be better at deploying a network after buying T-Mobile?

Thank you SBMobile! someone that knows whats going on and doesnt just talk without thinking or doing any research first.

AT&T Biggest Coverup of the Century. This will stop the AT&T T-Mobile merger in it's tracks.
AT&T stock holders will be lining up to sue AT&T executives involved CEOs and Presidents of AT&T finger prints are on it thousands of time.
Breaking story coming soon.