AT&T, T-Mobile Merger Opposed By Seven States

By Diane Bartz

(Reuters) - Seven states have joined the Justice Department's lawsuit to stop AT&T's proposed purchase of T-Mobile USA, the Justice Department said on Friday.

Attorneys general from California, Illinois, Massachusetts, New York, Ohio, Pennsylvania and Washington have signed onto the effort to stop the $39 billion deal to merge two of the four large national cellphone carriers.

New York Attorney General Eric T. Schneiderman noted in a statement that New York City, Buffalo, Rochester, Albany and Syracuse could see less competition in the wireless space.

"This proposed merger would stifle competition in markets that are crucial to New York's consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies," he said in a statement.

The Justice Department says the acquisition of T-Mobile USA by AT&T would lead to higher wireless prices.

AT&T said Friday it was interested in reaching a settlement that would lead to Justice Department approval, and was confident the deal would go forward.

"It is not unusual for state attorneys general to participate in DOJ merger review proceedings or court filings," said AT&T spokesman Michael Balmoris.

AT&T also noted that 11 states support the deal. They are Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia and Wyoming.

One concern among consumer advocates is that T-Mobile generally costs less than other carriers so its disappearance could mean higher prices for wireless service.

The deal would vault AT&T over Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, into the No. 1 spot. T-Mobile USA is now owned by Deutsche Telekom AG.

Sprint, the third-largest carrier, has bitterly opposed the AT&T buy.

The two sides have a scheduling hearing on September 21 where they will address dates for an upcoming trial. The Justice Department wants a trial starting on March 19 while AT&T wants January 16.

It is often difficult for companies to hold potential transactions together during protracted reviews, and AT&T has asked for as speedy a trial as possible.

"These states would have a very big chunk of the geographic markets where DOJ has a concern about the antitrust implications of the deal," said Robert Doyle, a former antitrust enforcer now with the private law firm Doyle, Barlow and Mazard PLLC. "On balance, it's (the deal) in bigger trouble."

AT&T has defended the transaction, saying it would bring 5,000 overseas jobs back to the United States. AT&T has also pledged to extend high-speed Internet wireless coverage to 97 percent of all Americans.

The addition of the seven states could well complicate any effort to reach a settlement, said Maury Mechanick, a telecommunications attorney at the law firm White & Case LLP.

"It will not make a settlement impossible," said Mechanick. "It now means that you've got a larger number of people who have to say yes before a settlement can be reached."

The case is the Department of Justice v. AT&T, T-Mobile US A, U.S. District Court, District of Columbia, No. 11-01560.

(Reporting by Diane Bartz in Washington and Sinead Carew in New York, editing by Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[ValerieRose]

04:41 AM on 09/21/2011

Obviously much more to come before any decisions are made but all is not well for AT&T and T-Mobile. The company needs to gain a few more supporters if it’s going to trail, but that shouldn’t be a problem. Sounds like the opposition may shrink after all! Even as the pressure grows on AT&T, the company doesn’t seem to be worried about opposition because they manage to gain the support of 11 states. http://radiomobiletech.com/blogposts/att-t-mobile-merger-opposed-by-7-states-att-doesn%E2%80%99t-care.html read this article to learn how this merger benefits AT&T and T mobile.

[BoFo]

02:15 AM on 09/20/2011

Land-line telephone service providers are considered public utilities (as are natural gas, electricity, and water providers) and are regulated as such because they are vital necessities, require extensive infrastructure, and are thus monopolistic by nature.

Wake up -- it's the 21st century and wireless and Internet access are just as vital to communication as land-line telephones.

Cellular service and Internet service providers should, therefore, also be considered public utilities and regulated as such.

The Alliance for Customers’ Telecommunications & Broadband Rights is a great source of information on this and other telecommunications issues:

http://www.teletruth.org/

http://breakupatt.com/

[mjb5406]

09:11 AM on 09/19/2011

That "bringing 5,000 jobs back to the US" is a bunch of hooey. First, what prevents AT&T from doing that even if the merger fails? Second, what about the net LOSS of jobs that will occur once AT&T terminates all of the people from T-Mobile whose jobs overlap with an existing AT&T employee? You certainly don't think they'll give any preference to the T-Mobile employee, even if they have seniority over their AT&T counterpart, do you?

[mjb5406]

09:06 AM on 09/19/2011

I. waiting to read this headline on HuffPo: "GOP-Controlled House Strips DOJ of Funding to Oppose AT&T/T-Mobile Merger" or some such thing. I'm sure the corporation-friendly (to put it mildly) Republicans are gnashing their teeth over this "intrusion" into the business of one of their greatest contributors.

[Left Jab 123]

12:34 AM on 09/20/2011

the AT&T communications monolopy was broken up in 1984 - It's taken them almost 30 years but it looks like they are gonna get it back....

[Tyler Annis]

05:16 PM on 09/18/2011

What is the end result of all these gigantic corporate mergers? Do we end up with a few all-powerful companies that have more influence over the proceedings of our country than even the government? When does it stop?

[bryanzth]

09:59 AM on 09/18/2011

Corporate consolidation is only good for the consolidated parties involved -- not for customers, not for employees, not for the economy in general, and not for the industry.

So, anyone who has thought through this and is NOT a shareholder, manager, and CEO rewarded by higher profits and lower labour costs should come out against this. ;0)

BZ.

[Mike Knell]

01:33 AM on 09/18/2011

AT&T repeatedly lied to regulators about the condition of its underground infrastructure in my neighborhood.
I fear that AT&T has been cooking the books, and is hoping to purchase T-Mobile to hide problems in its infrastructure. This could be similar to the problems WorldCom had when it purchased MCI, and then went bankrupt.

In my neighborhood, AT&T has knowingly used defective phone lines, and has lost over half of its market share to Comcast. See this internal AT&T document dated March 16, 2009, which shows that over half of its underground phone lines are defective:
http://mikeandmabell.com/FBI/History-More_Info-11.html

On August 22, 2011, the Executive Director of the California Public Utilities Commission agreed to investigate if AT&T committed perjury in a Formal Complaint to conceal problems in its underground infrastructure.

[Newsmonger]

11:51 PM on 09/17/2011

The truth is, no matter how people do not like this merger, it is very much likely to go through.....

The reason for that is the major contention people or the DOJ have against the merger...everybody is saying that T-Mobile is cheaper and letting it stand will lead to competition, but if you researched T-Mobile very well and a few googling, you will find out that Deutsche Telekom, the owners of T-Mobile have said they will no longer invest in T-Mobile, that it is not profitable...meaning if the merger does not take place T-Mobile will be going under in no distant time.

A good indication was that, Deutsche Telekom stock fall 14% when DOJ filed the lawsuit to block the merger. So no matter what the outcome might be, T-Mobile might go under or be sold either to AT&T or to some else if the deal with AT&T does not go through...we all know that Sprint will not buy AT&T and their are no other viable GSM providers in the USA to buy T-Mobile, I dp not know if blocking the merger based on what will happen anyway and a potential lost of America jobs is a wise option.

[EcnelisDoogod]

05:08 PM on 09/18/2011

I agree. My experience with at&t leaves me the impression of a bully that stops at nothing for a buck. at&t has the DOJ in their pocket. DOJ is probably doing them a favor by driving down the price. Resistance is futile.

[Alan11]

09:37 PM on 09/17/2011

AT&T-mobile, nice one. I can see this happening, but then again, so many trying to stop it.

[edwardp7]

06:37 PM on 09/17/2011

I do not believe it will be allowed, there will be too much concentration if this is allowed to proceed.

I

[Spock]

05:40 PM on 09/17/2011

Stop this merger.

[Lucille]

05:37 PM on 09/17/2011

AT&T really wants a speedy trial in January as opposed to DOJ's request that the trial begin in March because AT&T is hoping the DOJ won't be prepared to litigate the case in January due to their other obligations as well as their staff settling back in from the Christmas holiday. A fair judge will see through this strategy and hopefully will give DOJ the time they need to adequately prepare for trial in March.

[nomac]

05:07 PM on 09/17/2011

....choice is good........

lets tell a little story about an country called Canada, it has these 3 national cell companies, and they offer the exact same plans at the exact same prices, with the exact same features, all just tweaked a bit and they hide there fee's differently

.....choice is good......