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Justice Dept. Files Antitrust Complaint Against AT&T and T-Mobile Merger 301

Posted by Unknown Lamer
from the but-ma-was-so-close-to-being-rebuilt dept.
Hitting the front page for the first time, AngryDeuce writes with a piece of exciting news hot off the news wire. From the article: "The Justice Department is blocking AT&T's $39 billion deal to buy T-Mobile USA, saying the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices. The deal has faced tough opposition from consumer groups and No. 3 carrier Sprint since it was announced in March." The DOJ has released a full statement on their decision to file the antitrust suit, and AT&T has drafted a response. So much for AT&T's paltry promise of bringing 5000 unskilled call center jobs back to the U.S. if the merger were approved. Competition may yet live!
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Justice Dept. Files Antitrust Complaint Against AT&T and T-Mobile Merger

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  • by JustAnotherIdiot (1980292) on Wednesday August 31, 2011 @11:05AM (#37265448)
    Sure, they'd hire 5000 new people, but how many would they fire from T-mobile in the process?
    My money is on a good deal more than 5000.
    • by tripleevenfall (1990004) on Wednesday August 31, 2011 @11:10AM (#37265512)

      Throttling bandwidth, stripping out cost savings opportunities from service plans, locking down phones... that's a lot of work.

    • by Drethon (1445051)
    • by sl4shd0rk (755837) on Wednesday August 31, 2011 @11:21AM (#37265646)

      I think those jobs would most likely be offshored despite what tfa says. I ha
      ve yet to speak to anyone in a call center who's primary language is English.

      • by h4rr4r (612664) on Wednesday August 31, 2011 @11:35AM (#37265812)

        I am sitting a floor above ~400 call center agents, this is in the USA. 100% of them use English as their primary language. 10% of them also speak another language.

        • Whose call center? Certainly not any that I've contacted in the last 5 years.

          • by hairyfeet (841228)

            God that is the only time I miss having an Indian coworker! Every time I deal with one of those desk jockeys all I can do is wish I had Ms Sakar beside me again so I could say "Here, deal with this dipshit" and hear her curse his ass in Hindi. It was soooo funny to watch this little 90 sound Indian woman going "NO you do NOT tell me to reboot! I have a dozen degrees and I'm NOT gonna reboot, because that will NOT fix the problem! Now you give me someone who knows what they are doing!" followed by a stream o

      • by nschubach (922175)

        Out of pure curiosity... how did you post that? I find it odd that whatever you used placed a line break in the middle of the word "have". I've seen length limited posts before and always wondered why, but this one strikes me as extra odd.

      • I used to speak to people in call centers whose primary language was English all the time. Of course, the company that owned those call centers was T-mobile USA, and when I called them, the call center employees were friendly, honest, straightforward, and tried to work with me.

        Then, all of the sudden, a few months ago, every time I called a T-mobile call center, I talked to someone who I could barely understand and that couldn't think past the script in front of them. I wonder what happened to T-mobile a
      • by Jethro (14165)

        Every time I call t-mobile customer service, I get English speakers. I just called them yesterday.

        Also a bit of a different point, but many people in India are in fact 'native' English speakers, as English is one of the official languages in India. Half my family is from there, and they all speak English as a first language (among a few others). You probably mean people without a funny accent.

    • by yog (19073) * on Wednesday August 31, 2011 @12:15PM (#37266320) Homepage Journal
      I really hope this deal doesn't go through. T-Mobile is a great carrier. Not enough towers, but their plans are easy going and their customer service is top notch. I just added 2G of internet for my wife's phone, plus a few more anytime minutes, for $5 a month more. Now I just need to get her an Android phone so she can actually use it. T-Mo has good plans with and without contracts. Plus, they allow tethering for no extra charge, unlike Verizon and, I believe, AT&T. I just hope T-Mo can stay independent for a few more years until some other technology takes over, like VOIP over wimax.
      • by SomePgmr (2021234)
        Not only does AT&T require you to pay for tethering, if you had an old Cingular "unlimited data" plan, opting into tethering means you permanently relinquish your data plan for the new 2gb one. Even if you then cancel your tethering, you can never get your plan back.
  • "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. We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court."

    FWIW, I think the Justice Department did right today. As a T-Mobile customer, I am very happy. Here's hoping that the justice department succeeds.

    • Translation: AT&T apparently did spend enough on bribes erm lobbying to swade the Justice Department.

      How can anyone think that higher prices and less competition is in the best interest of consumers and the country. Oh yea I forgot this is AT&T they live in their own little dillusional world.

      • by fuzzyfuzzyfungus (1223518) on Wednesday August 31, 2011 @11:38AM (#37265848) Journal
        Hey! We totally pinkie-swear that if we are given nigh-unlimited power to bleed the nation's wireless users dry, we promise to build a couple of towers in rural nofuckingwhereistan and call it "Universal Access"! C'mon, it's a totally reasonable trade!
        • by hedwards (940851)

          That's one of the problems right there. There's no teeth in the promises that corporations make. At a minimum they should be broken up if they fail to comply with the terms of the agreement.

          • by gknoy (899301)

            No teeth indeed. Didn't we give them Large Numbers of dollars over a decade ago to build out network infrastructure? Has that materialized?

            • by Dracos (107777)

              Since you brought it up, no, it hasn't. They pocketed that money so their quarterly reports would look better.

      • by berzerke (319205)

        ...AT&T they live in their own little dillusional world.

        More like they think they are above the law, and to a large degree, they are correct. :(

    • by chaboud (231590)

      Agreed. I'm quite happy that the Department of Justice has fallen on the side of reason (for once). As a T-Mobile customer who moved to T-Mobile to avoid AT&T, I'm hopeful that this merger will fall apart, giving T-Mobile a bit of cash (meh) and some more spectrum (yay!).

      • by mcspoo (933106)
        Totally agree. Using T-Mobile because their data rate on Blackberry's is VASTLY superior to most other providers, specifically AT&T's... if the merger finally does occur, the data cost will likely double per month. That's not doing me, as a consumer in a depression, any good.
    • Re:AT&T's Response (Score:5, Insightful)

      by UnknowingFool (672806) on Wednesday August 31, 2011 @11:16AM (#37265594)
      AT&T doublespeak. Yes they met with the DoJ and the DoJ gave no indication that they would block the ruling. However it most likely the DoJ had not formed an opinion until after reviewing the implications and AT&T's documents. Or that the DoJ probably wanted to block it from the beginning but prudence would dictate they hear from AT&T first. If they hadn't met with AT&T, then the company would complain that they were being treated unfairly.
      • by fuzzyfuzzyfungus (1223518) on Wednesday August 31, 2011 @11:39AM (#37265858) Journal
        Does doublespeak count against my 'anytime' minutes; but at twice the normal rate, or do I need to upgrade my plan?
        • by nschubach (922175)

          No, doublespeak is billed on your peak minutes (twice on weekends) and also counts against your data usage (because your voice is data.)

      • Yes they met with the DoJ and the DoJ gave no indication that they would block the ruling

        Probably they are used to Bush-era zombies who would drool, gurgle, and then stamp OK on whatever was put in front of their sow faces. The idea that the meeting actually was used to get information before making a decision is probably not what AT&T are used to.

        • by fotbr (855184)

          The funny part is that you act like the bureaucrats change with the administration. The zombies, depending on their age, have probably been there since Clinton, if not even earlier.

    • by erroneus (253617)

      AT&T will be forced into some concessions which will ultimately get watered down to the point of being worthless. We saw what happened in the Microsoft antitrust trial and how that came out. I expect more of the same. AT&T will get their way one way or another. The thing is, the DOJ couldn't just let it go on without being "fought" since the deadly document leaked out to the public's view. So someone now has to step in, put on a show and dance the concessions dance to make it look like the publ

    • The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

      I have their evidence. Prior to the announcement of the merger, T-mobile offered a number of no contract plans that were slightly cheaper than 2-year contractual obligation plans, thus allowing the customer more freedom to pick a carrier that suited their needs based on changing lifestyles and habits over a two year period. After the proposed merger was announced, all of the no-contract plans were eliminated, and I have three recorded conversations with T-mobile customer service representatives explicitly

    • by todrules (882424)
      But just having this potential merger out there for so long is just killing T-Mobile. They are hemorrhaging customers with this deal hanging over their heads. Nobody wants to join, and current customers are leaving in droves. This merger has killed T-Mobile whether this deal goes through or not.
  • by halfEvilTech (1171369) on Wednesday August 31, 2011 @11:05AM (#37265456)

    I thought I would never live to see the day that a governmental department would block yet alone sue to block the merger of two mega corps.

    • by Miamicanes (730264) on Wednesday August 31, 2011 @11:09AM (#37265502)

      Holy shit. There IS a ${deity}, after all.

      (looks out the window)... wow, it's snowing outside (in South Florida), too!

    • This is hardly unprecedented.

      • by SomePgmr (2021234)
        True. Minor concessions will be made, AT&T will still plan to screw everyone in other ways, everyone at the DoJ will pat each other on the back for having done their due diligence and the thing will move forward. Real competition and common sense will lose, as usual.
        • by hedwards (940851)

          I predict that if the DoJ does ultimately give the OK that Sprint will file its own antitrust suit against AT&T to block the merger. Ultimately, they'd almost certainly win, the only conclusion one can make is that there would be reduced competition. Whether prices and service suffers as a result would largely be rendered moot by the decrease from 4 to 3 and possibly 2 when Sprint can no longer compete with both AT&T and Verizon.

      • Hardly unprecedented, but entirely unexpected for sure. As of late it seems that there is nothing that the mega corps can't and won't do to increase profit margin while our elected representatives turn a blind eye.
    • other cell carriers have a lot more to do with it than common sense in the government. I fear this "outbreak" you speak of is at best, overly exaggerated.

    • by Hatta (162192)

      Someone forgot to make the proper campaign contributions.

    • by Rob Riggs (6418)
      There is a very slight difference between the Democratic and Republican parties in U.S. governance. You're witnessing it here.
  • Hallelujah (Score:5, Insightful)

    by Jeng (926980) on Wednesday August 31, 2011 @11:06AM (#37265460)

    If I wanted AT&T as my service provider I would have subscribed to their service.

    If you have to buy customers perhaps it's time to change ones business strategy.

    • by tsotha (720379)
      This is more about buying spectrum than buying customers.
      • by 517714 (762276)

        This is about denying spectrum. You may not be aware that Sprint was set to buy T-Mobile for $10B less than AT&T. How could T-Mobile be worth more to AT&T unless they intended to engage in anticompetitive behavior?

        The cynic in me says that this is merely posturing on the part of the present administration and that they have no intention of actually preventing the merger.

        • by tsotha (720379)

          The spectrum is worth more to AT&T because they have customers to fill it. There are markets where service is spotty and they can't add new customers because they don't have the bandwidth. I'm thinking specifically NYC, but there are others.

          • Re:Hallelujah (Score:5, Informative)

            by 517714 (762276) on Wednesday August 31, 2011 @01:05PM (#37267028)
            They need more towers, not more frequencies. Accidentally leaked documents show that they are aware of the problem, that they chose not to solve the problem, and that the purchase of T-Mobile is not a real solution.
            • by tsotha (720379)

              It's not as simple as just adding a few new towers. They'd have to re-layout the entire network. That would be many billions more than purchasing T-Mobile. Of course you can overcome spectrum problems with more towers - that's the point of a cell network, after all. But putting up a cell is very, very expensive, especially in a place like NYC. You can't just move them around at a whim.

        • by mooingyak (720677)

          You may not be aware that Sprint was set to buy T-Mobile for $10B less than AT&T. How could T-Mobile be worth more to AT&T unless they intended to engage in anticompetitive behavior?

          Maybe AT&T thought that Sprint was getting T-Mobile at a bargain? Not saying that's the case, but the fact that AT&T was willing to pay more than Sprint to acquire T-Mobile doesn't really imply anything by itself.

    • by hedwards (940851)

      Indeed, I ended up with AT&T following AT&T's purchase of Cingular. The service went down the crapper pretty much over night. Service still hasn't recovered to what it was when Cingular was providing the service.

      This is a bit like the 3 or so acquisitions of my parents' cable account before they ditched cable for DirecTV, each cable provider was worse than the previous one and the cost sky rocketed even as there was no meaningful improvement in the selection of programming provided.

  • Hallelujah! (Score:5, Informative)

    by Savantissimo (893682) on Wednesday August 31, 2011 @11:06AM (#37265472) Journal

    Their own internal documents show AT&T does not need T-Mobile to expand service, and that AT&T intends to raise prices. This is a deal that should not happen. At last the DOJ does something right on the merger front.

    • by Baloroth (2370816)

      Ah but everyone knows this deal will lower prices! AT&T themselves have made economic models that say so! After all the "merger will lessen strains on the company’s wireless network, lower costs and increase quality, AT&T said in the filing." So obviously prices will be lower.

      For AT&T.

  • Sure they could afford to bring back a paltry 5000 jobs.

    They would be eliminating one of their main competitors, laying off way more than 5000 (more skilled!) workers, and opening the way to raising their prices by grabbing a customer base with even less choice and jacking up their rates.

    Nice to see government doing what its supposed to do for a change.

    • by fuzzyfuzzyfungus (1223518) on Wednesday August 31, 2011 @11:42AM (#37265890) Journal
      Their "5000 jobs" claim seems to belong in the same pile as the "Give us $100 million to build a stadium, and we promise to hire 6 hotdog vendors and a janitorial team!" arguments that get trotted out every time a pro sports team shakes down a municipality to build their business infrastructure for them... These sorts of things are so openly cynical and insultingly paltry that I'm honestly not sure why anybody even bothers pretending...
      • by hedwards (940851)

        With stadiums it's generally an honest, if incorrect belief, whereas in this case, I'm pretty sure they know that it's not going to happen. They're not going to need as many employees to do the work and consequently I can't imagine how this wouldn't result in massive layoffs. Beyond that, I have a really hard time believing that they'll keep prices lower when Verizon and Sprint need to merge to remain competitive.

        And let's be honest, AT&T service sucks, and it has sucked for a number of years, and quite

  • A failure of the deal puts T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.

    However, AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.

    Huh? If the deal DOESN'T go through, AT&T is giving T-Mobile money and spectrum?

    I don't get it.

    • Re:From the TFA (Score:4, Insightful)

      by krbvroc1 (725200) on Wednesday August 31, 2011 @11:16AM (#37265596)

      It makes sense. Think about all the business that T-Mobile lost while this thing was pending. People did not renew, some people did not switch to T-Mobile due to the uncertainty, etc. If it DOESN'T go through, T-Mobile needs to be compensated for that loss.

      • Re:From the TFA (Score:5, Informative)

        by generalhavok (1432165) on Wednesday August 31, 2011 @12:07PM (#37266242)

        It makes sense. Think about all the business that T-Mobile lost while this thing was pending. People did not renew, some people did not switch to T-Mobile due to the uncertainty, etc. If it DOESN'T go through, T-Mobile needs to be compensated for that loss.

        Copying a post of mine from earlier, yes, T-Mobile actually will be compensated quite well for this.

        If this deal is blocked, it would not be bad news for T-Mobile as some here have claimed. According to Bloomberg, [bloomberg.com]

        "Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month."

        So T-Mobile would get $3 billion in cash, more spectrum, and reduced fees for calls going through AT&T's network. This would seem to be good news for T-Mobile, as all of these things would make them more competitive.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      Standard practice in M&A. The acquiring company must always put something on the table if the deal doesn't go through due to the restrictions placed on the company to be acquired by the SEC and the agreement the two companies enter into. Google has put similar stuff on the table for Motorola if their deal doesn't go through.

    • by vlm (69642)

      A failure of the deal puts T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.

      However, AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.

      Huh? If the deal DOESN'T go through, AT&T is giving T-Mobile money and spectrum?

      I don't get it.

      Usually its in exchange for immediately ceasing to market directly or indirectly against them, giving them all the details of their internal organization, design, plans, supplier contact information, and procedures.

      If these agreements were not standard, then legal corporate espionage would kinda exist sorta... MS could "plan" to buy Apple, examine every tiny little detail of Apple, and when the govt laughs at the idea, they laugh back because they got $Billions worth of information. As they do exist, its k

  • Do not welcome our AT&T overlord masters.

    I like T-Mobile!

    I had AT&T and paid dearly to escape their evil clutches. I did not want to go back. Yeah for the DOJ! I hope they win.

  • Yay!

    Now lets hope they don't negotiate a deal (or worse yet, that the Department of Justice doesn't flat out lose the case).

  • by dave562 (969951) on Wednesday August 31, 2011 @11:27AM (#37265726) Journal

    Every once in a while, the Feds get it right. From the article,

    "Moreover, the department said that AT&T could obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor."

    We have been saying this here forever. AT&T et al need to invest in their own infrastructure. It is about time that the Federal government is on board with that.

    • by Trepidity (597)

      True, but in this case the feds are just saying that the numbers don't add up, not that AT&T has to invest in their own infrastructure. They could perfectly legally choose to let their infrastructure continue to suck if they want. But the DOJ is pointing out that AT&T's official reasons for buying T-Mobile can't be right, because if you add the numbers, it'd cost them less to build out the infrastructure that they claim they're buying. Therefore part of the value of the deal must be from the way it

      • by dave562 (969951)

        That is a good point. The way this process works is that AT&T lays out their justification and the DoJ either accepts or rejects it. In this case the DoJ has rejected it. Now AT&T has the opportunity to go back to the drawing board and come up with some other lies.

  • by C_Kode (102755) on Wednesday August 31, 2011 @11:30AM (#37265754) Journal

    As a T-Mobile customer since 1999 (when they were Voice Stream) I couldn't be happier. I want no part of AT&T.

  • I am pleasantly surprised to hear this news.

    I can't help but wonder what lead to this; if this was a matter of AT&T not making contributions to the right politicians, not being as connected as a company like GE, or not being in an industry like finance or healthcare. I'd say Bank of America gets away with far worse and not only are they not investigated but they're rewarded with bailouts. Of course, this all could be for show and the merger will end up going through anyway.

    I think it reflects a sad stat

    • You're operating under the assumption that the government cannot possibly, every, under any circumstance whatsoever perform the slightest task. Ever. We've been well conditioned either by media sensationalism or by partisan pundits to just accept that this is the case. Whatever shreds of appearance of competence are left after those two are done are usually destroyed by the instances where the government actually does fuck things up, rather than just does something that pisses off the (left / right / center

    • Where did you get the idea that BofA has not been investigated for anything? A simple Google search on "bank of america investigation" would reveal they are getting royally hammered. In fact they are getting investigated for attempted to hinder some of the investigations they are under.

      I mean it's one thing to bring a political bias to a conversation; we all do that to some extent. But to make wild-ass factually incorrect statements that could be fact-checked with a simple Google search really exposes some

  • ... go after the oil producer/refiner/distributor vertical monopolies.

  • by xjerky (128399) on Wednesday August 31, 2011 @11:51AM (#37266014)
    Y'know for the past year or so I've been wondering how AT&T was ballsy enough to drop unlimited data and tiered text messaging for users, not to mention their tethering plan scam, when they should have been keeping up appearances to the DOJ that they actually care about their customers. Looks like that was a bad idea!
  • Just because the merger is not approved does not mean that T-Mobile will continue as a viable alternative. My understanding was that the reason that Deutsche Telekom was selling T-Mobile was because they were not making enough return on investment.
    The first article says that AT&T will give T-Mobile $3 billion if the deal does not go through, but that is not the case. AT&T will give Deutsche Telekom $3 billion if the deal does not go through. There is no reason to suppose that Deutsche Telekom wil
    • I think I would rather see T-mobile go bankrupt. Perhaps then some of the smaller start-up cellular providers could afford to buy portions of their assets. I would love to see companies like SimpleMobile and Cricket buy up their own towers in some areas and become strong localized competitors in the GSM arena.
    • Deutsche Telekom didn't want to put more money into T-Mobile because they're investing it all in their LTE buildout in Europe. T-Mobile is in bad shape because they need to build a 4g network to keep up with every one else, but they didn't buy any spectrum to do it. Whether the $3b goes to T-Mobile or not, DT has no reason to keep the spectrum. So T-Mobile will get the spectrum they need for a 4g network, they just need cash to build it.

      DT could look at it in a number of ways;
      they find another buyer for

  • Jobs shouldn't be the point of this in any way. If you think the government should force companies to hire more people you've fallen for the broken window fallacy. It's not about efficiency it's about competition. This action is supposed to improve service and lower prices by allowing other companies to compete. And guess what? If another company can compete by farming out 50% of its support to India and still sell phone services that's the way it's supposed to go.
  • by TheDarkener (198348) on Wednesday August 31, 2011 @12:36PM (#37266576)

    I'm a current T-Mobile customer with 2 cell phones on a single plan (one for me and one for my wife). After years of horrible customer service experiences, sub-par network service and, of course, after being psychologically sick of giving a company money that was involved with wholesale illegal wiretapping [eff.org], we canceled our 2 cell phones, DSL service, and home landline (all AT&T).

    We went to T-Mobile because they were one of the only other companies left. They were "new" to us, a fresh company with young motivated employees that actually sounded genuinely glad to help you. We were so happy with them.

    When we heard about the pending merger with AT&T, we immediately started looking around. We haven't switched yet, but as soon as the merger was complete we would have broken our contract (we were pretty sure there would be something we could say about not paying an early cancellation fee since a merger wasn't in our contract). Over the past few months, we noticed little things start happening with our account (which may or may not be related to the merger, yet we never experienced it before the word was out). Extra bill charges, randomly having our account turn on Internet access on my wife's cell phone without us asking for it (and them charging us $30/month for it), and even when we called them, the vibrance in their voices were completely gone. I might be sounding wishy-washy about the customer service enthusiasm, but seriously. It was a DRAMATIC change. It already seemed like the call centers were moved to AT&T.

    I really hope this thing is blocked. I want to stick with T-Mobile. I want to give my money to a company that isn't involved with an enormous constitutional rights violation. I want to be able to choose. I don't want another Ma Bell.

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