On Wednesday, the U.S. Justice department filed an anti-trust lawsuit against AT&T in order to block its intended merger with T-Mobile which, if allowed to proceed, would have made it the largest telecom in the known universe. The Justice Department claims that allowing the merger to go through would hinder competition, lower quality services and lead to higher prices for consumers (well, duh!). In a statement, AT&T said it was “surprised.”
According to David Lazarus in the LA Times, in its efforts to get the merger approved by the FCC, AT&T tried to say that if they paid $39-billion to buy T-Mobile, the combination of the two companies would let AT&T expand its network and better serve its customers. However eventually it became clear that all they would really have to do in order to expand that coverage would be to throw $3.8 billion at it in order to cover 97% of the country. So in essence, the merger would serve knock out major competition and get an 80% share of the market along with Verizon. Also, there were some vague, flowery promises of bringing back 5,000 call-center jobs if the merger were allowed to go through however, it would remain to be seen if this would actually come to fruition.
The FCC (along with the Justice Department) is still reviewing the case. You can read more here. So far as things stand, it seems like the FCC hasn’t gotten a satisfactory response from either AT&T or T-Mobile regarding concerns about competition and provision of service. However, if AT&T can play the pleading child routine well enough, they probably might get their way. It wouldn’t be surprising since the Comcast-NBC merger was allowed to go through. It could only really be a matter of time, lobbyists and money.
