imageLooks like T-Mobile may get a $3b breakup fee from AT&T if this isn’t resolved. Of course, since the merger is being blocked because of a fear of lack of competitiveness, giving T-Mo $6b could certainly level the playing field…the irony.

Anyway, the Department of Justice has filed to block the merger. Of course, it’s on the grounds of anti-competitiveness as AT&T and TMo are direct competitors in so many counties and if AT&T had them all they would have a monopoly. It is noted that AT&T can move to block the DOJ by a court action and based on the amount of money on the table I think that’s a fair presumption.

Share your thoughts. I think in the end this is probably the right move as removing TMo really does give AT&T a lot less competition and presumably that would lead to a lot of people forced to pay higher prices if they want service. I see both sides of the coin but consumers probably win with this decision.

8 COMMENTS

  1. It doesn’t matter what we think really. The merger will or will not happen depending on just how much money is thrown around Washington. Until we get a government that isn’t based on payoffs, the average consumer is going to get screwed every time. yeah that sounds a bit paranoid etc, but it’s the truth, he who has the most money gets what they want.

  2. This just hit my inbox:

    AT&T Statement on Department of Justice Action

    DALLAS, Aug. 31, 2011 /PRNewswire/ — The following may be attributed to Wayne Watts, AT&T Senior Executive Vice President and General Counsel:

    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.

    At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

    Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
    Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;
    Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

    We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.

  3. I absolutely agree with this move, but @Kristofer is right, unfortunately. The money AT&T is shelling out, they should improve their infrastructure instead.

  4. “Help solve our nation’s spectrum exhaust situation and improve wireless service for millions”. I wasnt aware that at&t had been appointed the saviour of the US’s alleged “spectrum exhaust situation”. How come Verizon and Sprint, not to mention those smaller, regional carriers arent affected?

  5. and Sprint has just been heard from:

    Earlier today, the Department of Justice (DOJ) announced it had filed suit in federal court to block AT&T’s proposed takeover of T-Mobile USA. In response, Vonya B. McCann, senior vice president of Government Affairs for Sprint (NYSE: S), issued the following statement:

    “The DOJ today delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first. Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.”

  6. Sorry but I am for At+t. After hurricane Irene (tropical storm) When I had No cable, no wifi, I learned how bad At+t is at my house.I chose not to go to T-Mobile for the HD2 based on reviews and maps that said I wouldn’t be happy with service at T-Mob. So take these two barely functioning companies and make one that is at least adequate. I have been an At+t customer for 15+ years, and for the first time I am rethinking my next phone company. Peace

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