THE BLOG

DOJ's Lawsuit Blocking AT&T-T-Mobile Merger Welcome News for People of Color

09/01/2011 11:42 am ET | Updated Nov 01, 2011
  • Joe Torres Senior External Affairs Director, Free Press

Yesterday the U.S. Department of Justice filed an antitrust lawsuit to block the $39 billion merger between AT&T and T-Mobile. This is great news for communities of color, who disproportionately rely on wireless service to make phone calls and access the Internet.

The DoJ concluded the merger would lead to "higher prices, fewer choices and lower quality products" for millions of wireless users.

Even though AT&T has vowed to fight today's decision in court, the announcement is welcome news for our community, which has been devastated by the nation's economic crisis.

"Blocking this merger is a major victory for communities of color, rural communities and America's poor," said amalia deloney, grassroots policy director for the Center for Media Justice. "The Justice Department has taken seriously our real concerns about higher prices, fewer choices and massive job loss."

The proposed merger would result in AT&T and Verizon controlling nearly 80 percent of the wireless market. It would also likely lead to higher wireless prices, making it that much more difficult to close the digital divide. The high cost of Internet access is a primary reason why so many people of color remain disconnected.

Of the four national carriers, AT&T offers the most expensive plans while T-Mobile's plans are the most affordable. So it is no surprise that nearly half of T-Mobile's customers are people of color.

And the merger would result in major job losses for communities of color. AT&T is expected to cut up to 20,000 T-Mobile workers, and people of color make up 48 percent of T-Mobile's workforce.

The Justice Department's decision comes as a relief for many who believed it would rubberstamp the merger -- bowing to one of the most powerful corporations in the country and its army of high-priced lobbyists -- rather than protect consumers by enforcing antitrust laws.

"As Americans struggle in today's economy, the Department took an important step to ensure that consumers have continued access to affordable mobile services and new technologies," said Rep. John Conyers (D-Mich.), ranking member on the House Judiciary Committee. "The action will protect American consumers and American jobs, the very purpose of our antitrust laws."

We recently learned that AT&T's main argument for seeking approval of the merger -- that it could not build out its 4G network to 97 percent of the population without acquiring T-Mobile -- was a lie.

AT&T's true motives for pursuing the merger were disclosed earlier this month when the company mistakenly released unredacted confidential documents it filed with the FCC. The information revealed the company rejected a plan to build out its 4G network to 97 percent of the population at a cost of $3.8 billion. The company decided it wouldn't be profitable to do so. Instead, AT&T decided it was better business to spend $39 billion -- 10 times as much -- to take out a competitor.

In lobbying for support of the merger, AT&T misled dozens of lawmakers and civil rights groups, including the NAACP, the League of United Latin American Citizens and the National Urban League, all of whom called on the DoJ and the FCC to approve this deal on the basis of the carrier's (false) claims.

Hopefully, lawmakers and civil rights groups will reexamine their positions and rescind their support of a merger that is clearly not only bad for our communities but bad for our country.