Sep 02 2011
DOJ Brings Antitrust Suit Against AT&T/ T-Mobile Merger
The Department of Justice filed a lawsuit Wednesday seeking to stop the proposed $39 billion buyout of T-Mobile by AT&T. AT&T executive Wayne Watts said his company was “surprised and disappointed” by the action, and would take up the fight in court. The DOJ’s 25-page complaint concludes the deal would decrease competition, result in higher prices, less innovation, and less access to wireless services, especially for rural consumers. Among the evidence presented by the DOJ are internal documents from T-Mobile and AT&T showing they are engaged in head-to-head competition, pressuring each to offer lower prices and better products. In one memo, T-Mobile describes itself as “[p]aving the way one “first” at a time,” referring to its status as a pioneer of wireless development. It introduced consumer favorites like the Sidekick – the first all-in-one-messenger product, and the first Android. The wireless market is already concentrated with only the Big Four national carriers. A merger, according to the DOJ, would reduce that to the Big Three, increasing the likelihood of “anti-compeittion coordination” among Sprint, Verizon, and the bigger, more powerful AT&T. While the lawsuit is a major blow, industry analysts say its no knock-out. The Federal Communications Commission has not made a formal decision, although chairman Julius Genachowski followed the DOJs announcement by stating his department also had “serious concerns.” AT&T has the money and motivation to push hard against the government’s case. A broken deal requires a pay-out of $3 billion to T-Mobile under the terms of their contract. Meanwhile, consumer and media watchdogs around the country are praising the DOJ, and seeing the fruit of months of organized campaigns. The Center for Media Justice called the action, “[a] major victory for communities of color, rural communities and America’s poor.” Likewise, a statement from the Consumers Union cheered, “This is something for consumers to celebrate.”
GUEST: Tim Karr, Campaign Director of Free Press, a national, nonpartisan, nonprofit organization working to reform the media.
Fin out more www.FreePress.Net and www.SaveTheInternet.com
One Response to “DOJ Brings Antitrust Suit Against AT&T/ T-Mobile Merger”
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