Wednesday, August 31, 2011

US Dept of Justice Puts the Kabosh on AT&T and T-Mobile Merger!!

In March of this year AT&T announced plans to buy out rival T-Mobile. This merger would make AT&T the largest provider of cellular service in the United States effectively leapfrogging Verizon. Of course Sprint and Verizon were not big fans of this maneuver and the companies particularly Sprint have been quite vocal in their opposition. Now it seems that the United States Government has some issues as well.

Bloomberg is reporting today that the US Department of Justice has filed an antitrust complaint to stop this merger immediately. If the merger does not go through it would be a very bad day for AT&T since they will owe T-Mobile $3billion in the case of the deal not working. AT&T has promised alot of jobs to the American worker in the merger but it seems the DOJ needs a little more convincing and feel that the merger would result in “in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives.”

The FCC also issues a statement-“By filing suit today, the Department of Justice has concluded that AT&T’s acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws. Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile. Competition fosters consumer benefits, including more choices, better service and lower prices” Julius Genachowski, chairman, FCC

Not to be left out here is what AT&T Senior VP Wayne Watts has to say-
"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. At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

· Help solve our nation's spectrum exhaust situation and improve wireless service for millions.
· Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
· Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.
We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.

It seems that right now noone knows that this merger will mean for the US consumer and the Government is not comfortable letting it do through without some more research. Rest assured that this is only the first
strike in what is sure to be a long battle. With $3billion at stake AT&T will not go quietly into the night!!

JKeene AndroREV Writer
We are AndroREV, WE ARE!!!!

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