Sprint files lawsuit to block AT&T's proposed purchase of T-Mobile
Sprint on Tuesday filed a lawsuit against AT&T, Deutsche Telekom and T-Mobile in an effort to block a proposed merger of the wireless carriers.
Sprint's complaint, filed in the District of Columbia, is a related case to the Department of Justice's own antitrust lawsuit filed last week. Sprint is the third-largest wireless carrier in the U.S. and is looking to block AT&T's proposed purchase of T-Mobile, the fourth-largest carrier.
"With today?s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal," Susan Z. Haller, vice president-Litigation with Sprint, said in a statement.
In its lawsuit, Sprint alleges that an AT&T takeover of T-Mobile would hurt wireless competition in the U.S., and would be bad for consumers. The complaint argues that AT&T's purchase of T-Mobile would:
Harm retail consumers and corporate customers by causing higher prices and less innovation.
Entrench the duopoly control of AT&T and Verizon over the nearly one-quarter of a trillion dollar wireless market. Sprint argues that AT&T and Verizon would control more than three-quarters of the market and 90 percent of the profits.
Sprint also believes the deal would hurt it and other independent wireless carriers by allowing AT&T an increased market position to exclude competitors, raise their costs, restrict access to handsets and lessen competition.
Last week, the Justice Department said in its own lawsuit that the elimination of T-Mobile as an "independent, low-priced rival" would eliminate a "significant competitive force" from America's wireless industry. The government believes the $39 billion deal would "substantially lessen competition."
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 Deutsche Telekom an 8 percent stake in AT&T.
Sprint's lawsuit is not a surprise, as back in May the carrier formally petitioned the proposed deal to the Federal Communications Commission. In that filing, Sprint accused AT&T of wasting its spectrum and taking a shortcut by purchasing T-Mobile to acquire more.
Executives from Sprint have also attempted to convince the government that AT&T's purchase of T-Mobile could hurt its profitability. "When one competitor has that much buying power they can determine the fate of different products," said Farib Adib, a Sprint executive in charge of handsets.
Currently, Apple's iPhone is only available on AT&T and Verizon, the two largest wireless networks in the U.S. But Sprint is rumored to gain the iPhone as well when Apple's anticipated fifth-generation handset launches as expected in the coming weeks.
Sprint's complaint, filed in the District of Columbia, is a related case to the Department of Justice's own antitrust lawsuit filed last week. Sprint is the third-largest wireless carrier in the U.S. and is looking to block AT&T's proposed purchase of T-Mobile, the fourth-largest carrier.
"With today?s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal," Susan Z. Haller, vice president-Litigation with Sprint, said in a statement.
In its lawsuit, Sprint alleges that an AT&T takeover of T-Mobile would hurt wireless competition in the U.S., and would be bad for consumers. The complaint argues that AT&T's purchase of T-Mobile would:
Harm retail consumers and corporate customers by causing higher prices and less innovation.
Entrench the duopoly control of AT&T and Verizon over the nearly one-quarter of a trillion dollar wireless market. Sprint argues that AT&T and Verizon would control more than three-quarters of the market and 90 percent of the profits.
Sprint also believes the deal would hurt it and other independent wireless carriers by allowing AT&T an increased market position to exclude competitors, raise their costs, restrict access to handsets and lessen competition.
Last week, the Justice Department said in its own lawsuit that the elimination of T-Mobile as an "independent, low-priced rival" would eliminate a "significant competitive force" from America's wireless industry. The government believes the $39 billion deal would "substantially lessen competition."
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 Deutsche Telekom an 8 percent stake in AT&T.
Sprint's lawsuit is not a surprise, as back in May the carrier formally petitioned the proposed deal to the Federal Communications Commission. In that filing, Sprint accused AT&T of wasting its spectrum and taking a shortcut by purchasing T-Mobile to acquire more.
Executives from Sprint have also attempted to convince the government that AT&T's purchase of T-Mobile could hurt its profitability. "When one competitor has that much buying power they can determine the fate of different products," said Farib Adib, a Sprint executive in charge of handsets.
Currently, Apple's iPhone is only available on AT&T and Verizon, the two largest wireless networks in the U.S. But Sprint is rumored to gain the iPhone as well when Apple's anticipated fifth-generation handset launches as expected in the coming weeks.
Comments
You get 'em Sprint! More competition is the only way consumers will have a chance at fair pricing.
Now if only we had any chance of that right now. Too bad they're colluding on prices.
I'm guessing T-Mobile will be sold to AT&T, but they won't be allowed to get the entire spectrum.
I agree and think that's the reason T is hyping the spectrum message - to make it a target.
Realistically, with no AT&T buy-out, T-Mobile will have to raise rates to become profitable.
Just approve it, have them sell of some assets and get on with it.
This merger needs to happen. T-Mobile, while not bleeding money, is losing customers and the parent company has gone on record stating they will not be investing anymore in this market. Sounds to me like sprint wants t-mobile. If t-mobile pulls out of this market, less competition. If sprint buys them, same thing. Same for Verizon, AT&T.
Just approve it, have them sell of some assets and get on with it.
Sprint + T-Mobile? After the Nextel debacle, I would certainly hope not. I think t-mo needs AT&T far more than AT&T needs them, regardless of the rhetoric they're spewing out at the FCC. t-Mo represents a quick fix for AT&T as it provides them with physical infrastructure and spectrum immediately. But even if the deal falls through, AT&T has enough money and a large enough client base to justify the cost of building out their own network, even though it will take longer without t-mo. The opposite cannot be said for t-mo who is losing customers and not generating as high a return on assets as Verizon and AT&T. Sooner or later, t-mo will become an also-ran in this space and they'll be forced to sell out anyway, though at that point, probably for considerably less money than what AT&T is currently offering.
You get 'em Sprint! More competition is the only way consumers will have a chance at fair pricing.
There are a lot of people like you around here, talking about how competition is "good" and T-Mobile being acquired is "bad".
But it's funny how this group, for all of its lip-service to competition, never seems to be willing to let the less competitive actually fail (which is, in fact, the natural outcome of competition). No, instead of failing and going away, the less competitive seem to always require a bail out, or a rescue from being acquired by bigger, more competitive companies.
T-Mobile as an independent company IS NOT competitive, that's its problem. It has been hemorrhaging customers based on its competitive offerings for YEARS. Customers with free choice have been flocking AWAY from T-Mobile (and Sprint), and into the arms of AT&T and Verizon...all because those carriers are offering something better. That's how competition works!
It may be sad, it may be tragic, but maybe there's just not enough room for 4 major cel phone carriers to thrive in the U.S. They all have to have their own departments and budgets for marketing, customer service, billing, engineering, infrastructure. etc., and the costs, for some of them, are just too much for the money they're able to bring in.
T-Mobile is not going to survive. Its own parent company wants to dump it before the subscriber loss gets even worse. If the government blocks the deal, T-Mobile will most likely get sicker and sicker, and its shareholders will lose even more $$, which means they'll have less money to put into more profitable ventures down the road. And that sounds like a good thing to you?
T-Mobile getting absorbed by AT&T is the natural and in fact best outcome of it losing its war in the cel phone industry. It competed, and it lost. Again, that's what happens in competition, there are winners and losers. That system is a good thing because it encourages people/organizations to be smarter and more effective (ie, be winners) and discourages people/organizations to be dumber and less effective (ie, be losers).
One more thing: I'm not sure how T-Mobile staying independent would help ensure "fair pricing". What is fair to you? Does that mean as low as possible? I think for you, it does, but that's just silly because obviously T-Mobile's industry-low rates are leading it to bankrupcy! Those rates are unsustainable. AT&T and Verizon charge more, but they deliver more and they manage to stay in business to keep servicing their customers. Again, that's a good thing.
Either way, I don't like it. I don't like seeing corporations like AT&T or Microsoft gobble up their competition.
T-Mobile as an independent company IS NOT competitive, that's its problem. It has been hemorrhaging customers based on its competitive offerings for YEARS. Customers with free choice have been flocking AWAY from T-Mobile (and Sprint), and into the arms of AT&T and Verizon...all because those carriers are offering something better. That's how competition works!
It may be sad, it may be tragic, but maybe there's just not enough room for 4 major cel phone carriers to thrive in the U.S. They all have to have their own departments and budgets for marketing, customer service, billing, engineering, infrastructure. etc., and the costs, for some of them, are just too much for the money they're able to bring in.
All cell carriers are like crack dealers and young people are addicted to cell phones. I'd like to see them all go out of business. If the government wants stimulate jobs by building out infrastructure such as roads and bridges, maybe they should consider building out free public wifi in all major metropolitan areas and let us use VOIP for 99% of our communication needs. I for one am not affected by the insanely high prices the cell companies charge for data plans since my company pays for my iPhone but a lot of young people are not as fortunate in that regard.
What are you doing? Nothing, you? Nothing. Want to do something later? OK. What do you want to do? I don't know. What do you want to do? I don't know.
Hang up the phone and start working on something productive.
Its not the same thing. Sprint + T-Mobile has about 80 million subscribers. Less competition but ATT would not have huge control over the market. Verizon and ATT each has over 100 million. This deal is bad for everyone.
The only way the game would be fair is if hardware companies could be forced to support all carriers. Put things like the iPhone everywhere and it becomes about the price and coverage not the fancy toy
All cell carriers are like crack dealers and young people are addicted to cell phones. I'd like to see them all go out of business. If the government wants stimulate jobs by build out infrastructure such as roads and bridges, maybe they should consider building out free public wifi in all major metropolitan areas and let us use VOIP for 99% of our communication needs. I for one am not affected by the insanely high prices the cell companies charge for data plans since my company pays for my iPhone but a lot of young people are not as fortunate in that regard.
Hang up the phone and start working on something productive.
What are you doing? Nothing, you? Nothing. Want to do something later? OK. What do you want to do? I don't know. What do you want to do? I don't know.
This idea scares me. I see how existing utilities are run and charged and I could easily see them doing the same model. Not sure about your bill but as I use more water or electricity the rates are tiered. Instead of me getting a lesser rate for buying more of something, they charge me more for the last 100 gal or KW then they did for the first. All in an effort to discourage use and not have to grow infra. Or they charge everyone less than it costs then make up the loss with sales tax revenue. Oh! How about when it's time to build something they'll buy the land from the biggest donor instead of the cheapest and most practical. How about they build it where they want it and use eminent domain to just condemn and take.
Weren't many people pissed about warrantless wire taps? How about big brother not even having to worry about the mess of a private company to do it and have the option to follow due process. Heck we can just roll telco under the Homeland Security and it can just pass information between agencies.
Most people are clamoring for competition because that's what keeps things moving and results in better for the consumer. Now we want a single provider/single player plan? Price controls?
This idea scares me. I see how existing utilities are run and charged and I could easily see them doing the same model. Not sure about your bill but as I use more water or electricity the rates are tiered. Instead of me getting a lesser rate for buying more of something, they charge me more for the last 100 gal or KW then they did for the first.
That I think is because they are trying to discourage you from wasting resources. Wifi doesn't have the same environmental impact. I don't think they can listen in very easily if you use SSL
That I think is because they are trying to discourage you from wasting resources. Wifi doesn't have the same environmental impact. I don't think they can listen in very easily if you use SSL
It's a resource. There's only so many bits that will fit in the "shared resource". Fairness dictates that we punish those that would use (waste) a resource and deprive others who are less fortunate from having access.
Look, if this was a grand idea, why are countries who used to have nationalized telcos abandoning the concept? Rates, service quality, new product rollout better now or before?
Look, if this was a grand idea, why are countries who used to have nationalized telcos abandoning the concept? Rates, service quality, new product rollout better now or before?
I believe at the time of the launch of the original iPhone Steve was predicting that public wifi would become ubiquitous which never really happened. Maybe because there are security issues with unencrypted passwords etc that could be sniffed. Nevertheless people tend to expect large business and public facilities to provide public access. But the issue of unencrypted wifi still exists. I think there should be a way to automatically use SSL even without a log on to a network. As it is today the encryption is provided by WEP, WPA which requires knowing the password.
The only way the game would be fair is if hardware companies could be forced to support all carriers. Put things like the iPhone everywhere and it becomes about the price and coverage not the fancy toy
And that is the real issue, IMHO. Sprint's arguments were largely bogus until they got down to the last one listed in the AI write-up which is basically what you stated. Frankly, I doubt any of this DOJ action would have occurred had Sprint been selling the iPhone all along. If they had it, what would Sprint's and the government's argument be considering a combined ATT/T-Mobile is still less than 50% of the overall market?
In the end, Apple is indirectly responsible for the downturn at Sprint and T-Mobile. If those two outfits had access to the iPhone, the market ends up looking different and the anti-trust picture becomes substantially different right along with it.
I believe at the time of the launch of the original iPhone Steve was predicting that public wifi would become ubiquitous which never really happened. Maybe because there are security issues with unencrypted passwords etc that could be sniffed. Nevertheless people tend to expect large business and public facilities to provide public access. But the issue of unencrypted wifi still exists. I think there should be a way to automatically use SSL even without a log on to a network. As it is today the encryption is provided by WEP, WPA which requires knowing the password.
Even Big Steve had wifi spectrum issues during his presentations. And I thnk I was missing you in earlier posts. I wasn't thinking WiFi, although I'd vote against my city funding it. I was thinking traditional wireless phone service types and SMS/MMS.
T-Mobile wants this deal to go through not because it is not profitable but because it will be way overpaid; T-Mobile's parent company will get a large percentage of AT&T stock, not to mention a seat on the Board; and many of T-Mobile's top executives will get big parting gifts.
The problem is T-Mobile doesn't own the spectrum. The taxpayers do. This deal creates a monopoly on the GSM network overnight. If the government has any concern over the actual laws, it has to kill the deal.
I agree and think that's the reason T is hyping the spectrum message - to make it a target.
Realistically, with no AT&T buy-out, T-Mobile will have to raise rates to become profitable.
T-Mobile's parent company wants this deal to go through for two main reasons. One it is being way overpaid. Two it will get a huge stake in AT&T along with a board seat. AT&T through documents it accidentally released says it can buy the spectrum it wants from other sources without buying T-Mobile for less then four billion. This deal is all about having T-Mobile's customers pay for the sale by raising their prices to match AT&T.
T-Mobile is nowhere near bankruptcy. It is very profitable making over a billion every quarter. If that means bankruptcy, sign me up.
What is fair? Not raping consumers when these companies are using the public airwaves to provide what essentially is a public service. These companies huge profits were essentially given to them by essence of paying a low price for what almost amounts to an exclusive right to use the airwaves. If I wanted to start a carrier business today, it would be impossible as those companies are locked into the airwaves.
I understand greed when a company is giving you something it created all its own. Here, however, the profits were given to them by essence of being awarded the spectrum forever. The Internet itself was a government created infrastructure that these companies are benefiting tremendously from.
Look at AT&T. It has a cap to its data plan. Yet, it will not allow tethering without paying them more. Since the data is capped and a consumer already pays for it, that is not fair to charge more when AT&T does nothing else for you. When a contract is up and you legally own your iPhone, AT&T will not unlock the phone for you, and further it will force you to have a data plan even if you don't want one. That isn't fair either. It is also anti-competitive because lots of people would take their phones to T-Mobile.
There are a lot of people like you around here, talking about how competition is "good" and T-Mobile being acquired is "bad".
But it's funny how this group, for all of its lip-service to competition, never seems to be willing to let the less competitive actually fail (which is, in fact, the natural outcome of competition). No, instead of failing and going away, the less competitive seem to always require a bail out, or a rescue from being acquired by bigger, more competitive companies.
T-Mobile as an independent company IS NOT competitive, that's its problem. It has been hemorrhaging customers based on its competitive offerings for YEARS. Customers with free choice have been flocking AWAY from T-Mobile (and Sprint), and into the arms of AT&T and Verizon...all because those carriers are offering something better. That's how competition works!
It may be sad, it may be tragic, but maybe there's just not enough room for 4 major cel phone carriers to thrive in the U.S. They all have to have their own departments and budgets for marketing, customer service, billing, engineering, infrastructure. etc., and the costs, for some of them, are just too much for the money they're able to bring in.
T-Mobile is not going to survive. Its own parent company wants to dump it before the subscriber loss gets even worse. If the government blocks the deal, T-Mobile will most likely get sicker and sicker, and its shareholders will lose even more $$, which means they'll have less money to put into more profitable ventures down the road. And that sounds like a good thing to you?
T-Mobile getting absorbed by AT&T is the natural and in fact best outcome of it losing its war in the cel phone industry. It competed, and it lost. Again, that's what happens in competition, there are winners and losers. That system is a good thing because it encourages people/organizations to be smarter and more effective (ie, be winners) and discourages people/organizations to be dumber and less effective (ie, be losers).
One more thing: I'm not sure how T-Mobile staying independent would help ensure "fair pricing". What is fair to you? Does that mean as low as possible? I think for you, it does, but that's just silly because obviously T-Mobile's industry-low rates are leading it to bankrupcy! Those rates are unsustainable. AT&T and Verizon charge more, but they deliver more and they manage to stay in business to keep servicing their customers. Again, that's a good thing.
Americans are notoriously wasteful of both water and electricity. There is a lot that can be done in the individual home to be more efficient and use less. That is the reason we are being pushed to do so.
More Than 100 Ways to Improve Your Electric Bill
This idea scares me. I see how existing utilities are run and charged and I could easily see them doing the same model. Not sure about your bill but as I use more water or electricity the rates are tiered. Instead of me getting a lesser rate for buying more of something, they charge me more for the last 100 gal or KW then they did for the first. All in an effort to discourage use and not have to grow infra.