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US government files antitrust suit to block AT&T purchase of T-Mobile

post #1 of 134
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AT&T's planned purchase of carrier T-Mobile hit a snag on Wednesday when the U.S. government filed an antitrust lawsuit to block the proposed deal, saying it would hurt competition in the American wireless industry.

The government believes the $39 billion deal with "substantially lessen competition" in the wireless market, according to Bloomberg. The U.S. Justice Department filed the complaint in federal court on Wednesday in Washington.

"AT&T's elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market," the filing reads.

AT&T announced in March that it hopes to acquire Deutsche Telekom's American T-Mobile subsidiary in a cash and stock deal worth $39 billion. The deal would give the German carrier an 8 percent stake in AT&T.

T-Mobile and AT&T share similar GSM and UMTS/HSPA networks, and AT&T has claimed that the addition of T-Mobile would allow it to offer faster network performance and better coverage for its customers.

One of the largest opponents to the deal has been Sprint, the third largest carrier in the U.S., ahead of only T-Mobile in terms of subscribers among the "big four." Sprint has formally petitioned the merger with the U.S. Federal Communications Commission, accusing AT&T of wasting spectrum it already owns, and attempting to convince the government that a deal with T-Mobile would hurt the profitability of Sprint.



AT&T and T-Mobile executives were grilled by members of the U.S. Senate in May during a hearing on the proposed deal. Members of the Senate Judiciary subcommittee expressed skepticism over alleged benefits to consumers from the deal that have been portrayed by the two companies pitching the deal.

Since the launch of the original iPhone in 2007, AT&T has faced skyrocketing data traffic, which the carrier has said shot up 8,000 percent in the last four years. The significant bandwidth consumed by active iPhone users led one high-profile report from The New York Times to refer to Apple's handset as the "Hummer of cellphones," referring to the gas-guzzling vehicle.

AT&T has argued that the U.S. wireless industry will remain "vibrantly competitive" if the T-Mobile purchase were to gain federal approval. In expanding its 4G long-term evolution network and merging the two companies' wireless networks, AT&T has asserted that the deal would create jobs and generate economic growth.

Earlier this month, it was reported that AT&T is also considering the sale of some $8 billion in network assets to gain regulatory approval to purchase T-Mobile. From the beginning, AT&T was characterized as facing a "steep climb" to receive approval from the Federal Communications Commission.
post #2 of 134
*APPLAUSE*

Our government still works! A little!

Screw you, AT&T.

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post #3 of 134
Agree, Tallest Skil. ATT's claim that the acquisition increases competition is simply ridiculous.
Kudos to the Justice Dept.
melior diabolus quem scies
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melior diabolus quem scies
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post #4 of 134
Quote:
Originally Posted by Tallest Skil View Post

*APPLAUSE*

Our government still works! A little!

Screw you, AT&T.

My AT&T contract ended two days ago! Now I feel safer about switching to T-Mobile. (repeated but worth saying)... SCREW YOU AT&T!!!
post #5 of 134
everyone can stand behind this decision. or should at least.
post #6 of 134
Quote:
Originally Posted by AbsoluteDesignz View Post

everyone can stand behind this decision. or should at least.

So long as the government actually makes a good case. The US government went after Microsoft for anti-trust as well and basically let them off with what amounts to a slap on the wrist. I worry that out anti-trust laws lack any teeth.
post #7 of 134
It's ABOUT TIME

This actually makes my day. How it got this far is beyond me.

Agreed with above statements and good on Sprint for leading the pack.
post #8 of 134
Quote:
Originally Posted by diddy View Post

So long as the government actually makes a good case. The US government went after Microsoft for anti-trust as well and basically let them off with what amounts to a slap on the wrist. I worry that out anti-trust laws lack any teeth.

doesn't help that these "people" (corporations) pretty much control the government.
post #9 of 134
Quote:
Originally Posted by Gatorguy View Post

Agree, Tallest Skil. ATT's claim that the acquisition increases competition is simply ridiculous.
Kudos to the Justice Dept.

Yeah, I never understood how AT&T could claim the the elimination of a competitor would strengthen or at least not reduce competition. I guess logic isn't their forte.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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post #10 of 134
For this to be accepted, AT&T would need to show how this will improve service to its customers, lower costs to the customers, and create jobs (no layoffs). Otherwise, no deal.
post #11 of 134
What are you all smoking? Pretty much ALL mobile operators in the US are together in a cartel.

This is why in the US of A, we have the worst packages of any other country.

Even a small country like The Netherlands, with a faction of the US population, offers a 10 Euro per week unlimited internet package, and that's for prepaid customers!! I mean COME ON?!

The American people are being "played", and this move by the US Government is almost meaningless, whether or not it actually goes through.
post #12 of 134
My question about this is the fact that T-Mobile Germany wants to sell its American company.

T-Mobile as a company is not doing well and if they simply go out of business, how is that any better for the consumer?
post #13 of 134
Quote:
Originally Posted by AbsoluteDesignz View Post

doesn't help that these "people" (corporations) pretty much control the government.

Yup - This decision must have cost somebody a big wad of cash.
post #14 of 134
Quote:
Originally Posted by Skaag View Post

This is why in the US of A, we have the worst packages of any other country.

That's not true.

Quote:
Even a small country like The Netherlands, with a faction of the US population, offers a 10 Euro per week unlimited internet package, and that's for prepaid customers!! I mean COME ON?!

You do realize once they leave the Netherlands that rate no longer applies. How big is the Netherlands again?

Quote:
The American people are being "played", and this move by the US Government is almost meaningless, whether or not it actually goes through.

We do get to travel the third largest country in the world with our phones. We don't have to swap sim cards, the rates stay the same, there are no additional fees or charges for doing so.
post #15 of 134
Quote:
Originally Posted by Skaag View Post

What are you all smoking? Pretty much ALL mobile operators in the US are together in a cartel.

This is why in the US of A, we have the worst packages of any other country.

Even a small country like The Netherlands, with a faction of the US population, offers a 10 Euro per week unlimited internet package, and that's for prepaid customers!! I mean COME ON?!

The American people are being "played", and this move by the US Government is almost meaningless, whether or not it actually goes through.

My Verizon unlimited internet plan costs the equivalent of 5 euros per week.
post #16 of 134
Quote:
Originally Posted by TenoBell View Post

My question about this is the fact that T-Mobile Germany wants to sell its American company.

T-Mobile as a company is not doing well and if they simply go out of business, how is that any better for the consumer?

Deutsche Telekom isn't going anywhere. Like most players in the telecoms market, it's had its fair share of problems but it's still a profitable company.

And even if Deutsche Telekom did go bust, someone could come in and buy their infrastructure.
post #17 of 134
If the US gov't wants more competition in the cellular market, they should standardize the spectrum that carriers can use for cell phones, and outlaw locked phones and subsidization. As it stands today, even LTE handsets between ATT and VZW won't be compatible.

This opposition to the ATT - T-Mobile merger is some weird sop to politics or something. As it stands today, there really isn't a cellular market. It's really 4.5 separate kingdoms with well defined boundaries. It's more like the cable company market, than the auto/car company market.
post #18 of 134
This is a JOB KILLER. Many offices will be closed in consolidation process.

Thank heavens, someone is finally paying attention to merger-mania.
post #19 of 134
Quote:
Originally Posted by Tallest Skil View Post

Our government still works! A little!.

VERY LITTLE!
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post #20 of 134
"Big Government" finally doing BIG Things. On a side note, anyone planning on jumping to sprint if they get the IP5?
post #21 of 134
Quote:
Originally Posted by TenoBell View Post

My question about this is the fact that T-Mobile Germany wants to sell its American company.

T-Mobile as a company is not doing well and if they simply go out of business, how is that any better for the consumer?

You are very right.

T-Mobile has been (quietly) looking for a way out of the US market for a while now. They are stuck as the "cheap" option for consumers, and their profits have been on a downward trend for awhile. The main way for them to reverse that is to raise their prices, which would of course hurt their standing with their customer base.

They also are at a great disadvantage when it comes to buying US wireless spectrum, since they are fully owned by Deutsche Telekom (a German company), which is of course appropriate (US based companies and government should own the majority of something so valuable, not a foreign interest) - which is why you see them running their 3G/4G on such an odd frequency (1700Mhz), and why, along with not having the cash to compete with US giants, they did not have a strong showing in the spectrum auction where Verizon and AT&T bought a majority of their 700Mhz spectrum for their LTE networks.

I think the story that is getting overlooked here is that T-Mobile recognizes that the path they are on is not sustainable, and they want a way out. They after all agreed, and have been staunch defenders of the sale. Preventing this merger in no way guarantees that T-Mobile will stay around as a competitor for years to come.

Now how much AT&T is overstating their need for the spectrum is another story all together.
post #22 of 134
Quote:
Originally Posted by RichL View Post

Deutsche Telekom isn't going anywhere. Like most players in the telecoms market, it's had its fair share of problems but it's still a profitable company.

I don't think you understand that Deutsche Telekom itself offered to sell T-Mobile to AT&T. Because T-Mobile is an ailing company.

Deutsche Telekom Quarterly Profit Declines on T-Mobile USA



Quote:
And even if Deutsche Telekom did go bust, someone could come in and buy their infrastructure.

What then happens to T-Mobile's customers?
post #23 of 134
Quote:
Originally Posted by TenoBell View Post

My question about this is the fact that T-Mobile Germany wants to sell its American company.

T-Mobile as a company is not doing well and if they simply go out of business, how is that any better for the consumer?

I've asked the same question but the hate for AT&T on this site overwhelms logical thought many times. T-Mobile USA is going out of business one way or the other. This suit is being brought so the US Gov can get a piece of the action or force concessions for the "good of the public" a.k.a. big donors.
post #24 of 134
I'm guessing this is primarily a political move, as the timing seems unusual. I don't think that the courts will actually block the merger, though they may force AT&T to make additional concessions (e.g. give spectrum to Sprint or US Cellular, refrain from entering into exclusive phone deals for a period of time).

Note that the DOJ is under pressure because of the whole Fast and Furious debacle, and the President has also had a rough month politically and is starting up a re-election campaign. The deal has been on since March, so it seems odd that it would take so long to come up with an objection. I'm not arguing the merits, just pointing out what I think the motives are.
post #25 of 134
Ok let me give you a bit of a reality check, because you are all living in dream land.

You guys have already been "captured" by the mobile operators in the US, so you don't seem to be able to think out of the box.

I came to the US in April, with a GSM iPhone. I am leaving in 2 month. It made no sense for me to get a 2 year contract, so what do I do?

I want Data, and Voice. I want Unlimited Data, too, not just 2gb which I will finish in 2 weeks, then start paying ridiculous prices for over usage.

Sprint and Verizon are CDMA, leaving me with AT&T and T-Mobile. However, AT&T will NOT give you Data on a prepaid SIM Card, so my only option is T-Mobile, which charges me $70/month! EXCEPT: the iPhone 4 doesn't do 3G on T-Mobile because their 3G Network runs on the 1700Mhz band, leaving me stuck on Edge!

So yah, maybe when you're in a contract (which is where they want you), you are given the illusion that you are paying little per month. But in the grand scheme of things, this is working for AT&T, Sprint, and Verizon. Even for T-Mobile, and even for Boost (which runs on the Sprint network).

But for people like me who do NOT want a contract, or for tourists who come here for 1 month or so, we're screwed, and have to pay ridiculously high prices, for pretty crap services.

And aren't people complaining about AT&T's dropped calls? What I'm hearing is that Verizon has the most stable network, with the least dropped calls. How does AT&T prevent all customers from migrating to Verizon?... think about it. It's all an elaborate scheme. And Verizon are selling a CDMA iPhone - Why doesn't Sprint get it at the same time? Shouldn't Sprint WANT to sell an iPhone? What powers are working behind the scenes to produce this kind of anti-competitive behavior?
post #26 of 134
Quote:
Originally Posted by buckdutter View Post

They also are at a great disadvantage when it comes to buying US wireless spectrum, since they are fully owned by Deutsche Telekom (a German company), which is of course appropriate (US based companies and government should own the majority of something so valuable, not a foreign interest) - which is why you see them running their 3G/4G on such an odd frequency (1700Mhz), and why, along with not having the cash to compete with US giants, they did not have a strong showing in the spectrum auction where Verizon and AT&T bought a majority of their 700Mhz spectrum for their LTE networks.

I think the story that is getting overlooked here is that T-Mobile recognizes that the path they are on is not sustainable, and they want a way out. They after all agreed, and have been staunch defenders of the sale. Preventing this merger in no way guarantees that T-Mobile will stay around as a competitor for years to come.

Now how much AT&T is overstating their need for the spectrum is another story all together.

Excellent points.
post #27 of 134
on the one hand I'd celebrate but this doesn't happen nearly enough and where the hell was the government when verizon made a similar acquisition not that long ago? Now a days Verizon has the true monopoly in terms of coverage and their prices show it... building out to compete with them will take forever so you have to grow through acquisitions to compete just like verizon did. I agree that we need to limit these giants but we need to limit all of them... ideally I'd love to be able purchase some temporary service for when I might be out in the boonies from the likes of verizon and then go with whatever company I want when Im back around civilization... the 2 year prison sentences (contracts) are becoming a real drag
post #28 of 134
Quote:
Originally Posted by RichL View Post

And even if Deutsche Telekom did go bust, someone could come in and buy their infrastructure.

Like ATT is trying to do with T-Mobile USA?

So what you are saying is all ATT has to do is wait?!

Besides, I thought Deutsche Telekom was selling off their non profitable American division as a means of severing a hemorrhaging money losing appendage (operation).
/
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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #29 of 134
Quote:
Originally Posted by paxman View Post

Yup - This decision must have cost somebody a big wad of cash.

That's for sure. AT&T are already running expensive ads in prime time about the acquisition!
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post #30 of 134
You don't have to sign a contract. The point of the contract is to buy a new phone for a cheaper price. You have the option to pay full price with no contract.

Over all you've only complained about what you don't like about the US. You did not at all describe what so better about Europe.

The two are so very different situations it can be difficult to compare.

Quote:
Originally Posted by Skaag View Post

Ok let me give you a bit of a reality check, because you are all living in dream land.
post #31 of 134
Quote:
Originally Posted by TenoBell View Post

I don't think you understand that Deutsche Telekom itself offered to sell T-Mobile to AT&T. Because T-Mobile is an ailing company.

Deutsche Telekom Quarterly Profit Declines on T-Mobile USA





What then happens to T-Mobile's customers?

I agree...Deutsche Telekom is trying to get out of the US market because they are not making money. So if they cannot sell and continue to lose market share then they will eventually pull out of the US market or sell to someone.....
But in the meantime a sale to AT&T would mean a larger market for Apple and the iPhone.
This would be good for Apple IMHO..... and give the current T-Mobile customers services from AT&T. Becuase if Deutsche Telekom pulls out of the US market where will T-Mobile customer go? Options are Verizon Sprint and AT&T.....

Tallest Skil:


"Eventually Google will have their Afghanistan with Oracle and collapse"

"The future is Apple, Google, and a third company that hasn't yet been created."


 


 

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Tallest Skil:


"Eventually Google will have their Afghanistan with Oracle and collapse"

"The future is Apple, Google, and a third company that hasn't yet been created."


 


 

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post #32 of 134
I wish this suit never ends. IE they just keep arguing while T-Mobile keeps launching new products, keeping low products and making mocking ads about ATT and iPhone. Plus their lady is hot!
--SHEFFmachine out
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post #33 of 134
Before people cry for poor 'ol Deutsche Telekom, remember that AT&T is on the hook to pay them $3 Billion if the deal fall through. If your heart is still bleeding for Deutsche Telekom, let them have a fire sale and hand over T-Mobile to Sprint.
post #34 of 134
Quote:
Originally Posted by Skaag View Post


But for people like me who do NOT want a contract, or for tourists who come here for 1 month or so, we're screwed, and have to pay ridiculously high prices, for pretty crap services.

And aren't people complaining about AT&T's dropped calls? What I'm hearing is that Verizon has the most stable network, with the least dropped calls. How does AT&T prevent all customers from migrating to Verizon?... think about it. It's all an elaborate scheme. And Verizon are selling a CDMA iPhone - Why doesn't Sprint get it at the same time? Shouldn't Sprint WANT to sell an iPhone? What powers are working behind the scenes to produce this kind of anti-competitive behavior?

Welcome to America bro.
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post #35 of 134
Quote:
Originally Posted by sheff View Post

I wish this suit never ends. IE they just keep arguing while T-Mobile keeps launching new products, keeping low products and making mocking ads about ATT and iPhone. Plus their lady is hot!

That my friend is a true statement!

Tallest Skil:


"Eventually Google will have their Afghanistan with Oracle and collapse"

"The future is Apple, Google, and a third company that hasn't yet been created."


 


 

Reply

Tallest Skil:


"Eventually Google will have their Afghanistan with Oracle and collapse"

"The future is Apple, Google, and a third company that hasn't yet been created."


 


 

Reply
post #36 of 134
Edit...double post?
post #37 of 134
Quote:
Originally Posted by Skaag View Post

What are you all smoking? Pretty much ALL mobile operators in the US are together in a cartel.

This is why in the US of A, we have the worst packages of any other country.

Even a small country like The Netherlands, with a faction of the US population, offers a 10 Euro per week unlimited internet package, and that's for prepaid customers!! I mean COME ON?!

The American people are being "played", and this move by the US Government is almost meaningless, whether or not it actually goes through.

Exactly.

I didn't want to be the one to say it but I'm glad someone did. The time for the Government to step in is not when the market consists of two identical giants with matching (ridiculously high) prices and one pipsqueak without a hope in hell of ever being one of the big guys.

We have a similar situation in Canada. There are five big players who all collude on high prices and plans. All the plans are essentially the same and the costs are essentially the same. Then there are five or so "little fish" who offer decent prices and alternatives, but they are all locked out by the big five because they have different frequencies and can't operate on the big five's towers even if they decided to let them. So you can go for cheap, but only if you want to give up any kind of cool new phone like the iPhone and anything approaching decent coverage. If you go for any of the big five, you are basically getting the same bad deal everywhere.

The US situation is not a healthy market and while what the government has done is admirable, it's really far too little and far too late. I bet they even lose their case or are somehow "convinced" down the road that AT&T is right.

Certainly this is nothing to jump for joy over.

The real answer is having the government provide and control the infrastructure, and have the cell providers provide the service in an open market with competition. This will never fly in places like the USA of course for ideological reasons (evil socialism etc.).
post #38 of 134
Quote:
Originally Posted by sheff View Post

Plus their lady is hot!

100% agree.
post #39 of 134
Quote:
Originally Posted by ChristophB View Post

I've asked the same question but the hate for AT&T on this site overwhelms logical thought many times. T-Mobile USA is going out of business one way or the other. This suit is being brought so the US Gov can get a piece of the action or force concessions for the "good of the public" a.k.a. big donors.


If they keep their prices consistent, AND, get the iphone, i think you will see a mad dash from ATT/Verizon to tmobile.

I know the same was said when Verizon got the iphone, but the issue there was the plans were more or less the same. Not so with t-mobie.
post #40 of 134
Quote:
Originally Posted by Tulkas View Post

Yeah, I never understood how AT&T could claim the the elimination of a competitor would strengthen or at least not reduce competition. I guess logic isn't their forte.

"People lie."
- House, M.D.
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