Justice Dept Blocks AT&T’s $39 Billion Deal to Buy T-Mobile
- Posted on August 31, 2011 at 8:05am by
Billy Hallowell
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Photo courtesy of Engadget.com
WASHINGTON (The Blaze/AP) — 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. Bloomberg has more:
The Justice Department complaint was filed today in federal court in Washington. The U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law and a court order blocking any arrangement implementing the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
The deal has faced tough opposition from consumer groups and No. 3 carrier Sprint since it was announced in March.
AT&T could challenge the Justice Department’s action in court.
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.
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Comments (49)
Al J Zira
Posted on August 31, 2011 at 4:11pmAT&T didn’t give enough to the Obama campaign. Up your donations and you’ll get what you want, AT&T.
Report Post »pduffy
Posted on August 31, 2011 at 4:06pmCould it be the unionized Verizon had something to do with this?
Report Post »URKiddinMee
Posted on August 31, 2011 at 4:39pmMethinks you have hit the nail squarely on the head! I’m also thinking that if one “follows the money,” one will find that Obozo’s campaign fund has been a recipient of some of that Union payoff . . . uh, wait, I meant to say DONATIONS.
Report Post »ddg7
Posted on August 31, 2011 at 4:00pmI was working at SBC (before they became AT&T) when they acquired Ameritech. Jesse Jackson was holding that acquisition up until SBC gave money to his ‘Rainbow Coalition’ and SBC gave them some of their pension money to invest. After that Jesse gave his blessing to the acquistion and Clinton‘s justice department dropped it’s objections. Evidently the price to buy off the minorities is more than AT&T is prepared to pay this time.
Report Post »libbylindy
Posted on August 31, 2011 at 3:50pmThis is very interesting. The same entity that says AT&T will be too big and cost people more money is the same entity that is proposing national healthcare available from only one place and it will presumably cost everyone less money. What is wrong with this picture? You can’t have it both ways. Yes, it is true. When you become the only game in town, then the only game in town becomes the winner and everyone that has to buy from only one source is the grand prize loser.
Report Post »brotherwiki
Posted on August 31, 2011 at 9:44pmSo “the people” should file an anti-trust suit against Obamacare? Interesting!
Report Post »ddg7
Posted on August 31, 2011 at 3:48pmObama just can’t stand it that AT&T was going to put another 5000 jobs in Texas!
Report Post »woodywould
Posted on August 31, 2011 at 8:34pmNice. That would likely be spread around the country. However, no US company has ever pledged so much in a buyout deal.
Report Post »alrunner58
Posted on August 31, 2011 at 3:21pmAnd this is the governments business….why.
Report Post »Archibald Nastybottom
Posted on August 31, 2011 at 3:54pmThis one is actually FedGov’s business as a matter of anti-trust. I just can’t stand agreeing with Holder on anything!
Report Post »coolshopp
Posted on August 31, 2011 at 7:48pmI’m about as conservative as one can get. I’m 25 and very educated politically. As much as I hate the size of our government I can see where it is needed. We are not to have a complete anarchy. Government SHOULD keep us just beyond the cusp of anarchy. Now of course we are much closer to subjugation, but that is common knowledge to most of us here in this forum. I have been following this merger story since its beginning, and we need to realize that just like government can become bloated and corrupt, so can a corporation. Government regulation is way out of control, but in this case it is acting on BEHALF of the free-market system our economy runs on.
Report Post »Unfortunately the telecoms were granted special privileges decades ago, and that is why most homes only have one choice for a internet or phone provider. Even in socialist countries consumers across the world can choose their internet provider, and in having that choice they pay less for a higher standard of service.
When government falls to special interests we lose. When corporations get greedy we can go elsewhere, unless its a virtual or literal monopoly, in which case we lose as well. AT&T is not interested in creating jobs or furthering capitalism. They simply want to destroy competition and leave us with a duopoly with little to no competition between the remaining carriers. Please educate yourself before completely torching everything government does. It is a necessary evil unfortunately. Also I’m on Ver
HuskerDave
Posted on August 31, 2011 at 12:57pmFoolish feds!!! So T-Mobile will now likely shrink until it goes entirely out of business (Since Deutsche Telecom has announced they seek to orphan it), which will ACTUALLY reduce competition, unlike the injustice department’s PERCEIVED reduction in competition.
Report Post »ejbonk
Posted on August 31, 2011 at 1:10pmYou said it brother. Eric Holder Strikes Again. T-Mobile will become less competitive and then Obsolete as it will not be able to update it’s systems in a timely manner to stay competative with Verision,Sprint and AT&T. It’s Bond Issues and Stock with become a Corporate Greece that will have no Investor willing to take the risk and no EU(Germany) to bail-it Out. Hello,time for the fed to move in with to big to fail bailout and Fed Gov. takeover. You can see where this is going. Cell-Phones as a Right for all,with the RICH (People with Jobs) Paying for it.
Report Post »Evil Bert
Posted on August 31, 2011 at 2:49pmI would disagree. Just because AT&T was denied doesn’t mean nobody else can purchase T-Mobile. It is just that AT&T can’t. Sprint might be able to which would make them even more competitive against Verizon and AT&T. Or some other company can com in an swoop T-Mobile and start investing in it to bring the infrastructure and the network up to snuff so that it can compete on its own merits.
It is crystal clear that AT&T is full of it when they site the reason for buying T-Mobile in order to expand service to customers. It would cost more to buy T-mobile than it would to expand it’s network through cell towers, communications infrastructure, etc. It would cost them billions more to buy T-Mobile. So it is strictly to provide less choice and be less competitive in the mobile market place.
Don’t kid yourselves and turn this into a political issue.
Report Post »powhatan
Posted on August 31, 2011 at 12:48pmwhere is congress and the supreme court on this?
Report Post »URKiddinMee
Posted on August 31, 2011 at 4:40pmRight up Obozo’s azz here they usually are.
Report Post »ZABO
Posted on August 31, 2011 at 12:46pmeric(don’t call me steadman) holder, just killed 5,000 new jobs that would of been brought back to this country from abroad! oprah’s boyfriend steadman holder is a progressive pig, job killing a-hole bigtime. what the hell is it gonna take to rid this afirmative action attorney general. this colored *****,yea it sounds racial so what. it’s called freedom of speech. and until the steadman look-alike takes that away F-HIM and the slave boat his great-great grandaddy floated in on. and it‘s a dam shame that boat didn’t sink! it’s funny i bet muslim pigs probably sold his ancestors, as well as most blacks ancestors in this country.realism is harsh, but it’s the truth. deal with it! cause i have.no irish catholics need apply(1900′s)
Report Post »HTuttle
Posted on August 31, 2011 at 12:45pmGood. Name one mega-merger that ended up being better for humanity.
Report Post »And now I have a chance of keeping my $100/yr cell deal.
lylejk
Posted on August 31, 2011 at 12:41pmA longterm T-Mobile user and I have no tear in my eye for this decision. Sometimes the government does do something right. :)
Report Post »NOBELSPORT
Posted on August 31, 2011 at 12:30pm“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.”
Report Post »I guess that does not apply to health care!!!!!!!!!!!!
tifosa
Posted on August 31, 2011 at 12:18pmOh my, sad sad sad. Sure hundreds or thousands of jobs are saved, and price-gouging of the public won’t occur, but imagine the poor yacht-builders that won’t be getting action (\o/)
Report Post »Cruzan
Posted on August 31, 2011 at 12:02pmI wish the “Justice”” Dept would spend as much time and effort investigating some real crimes, like who knew about the gun running operation in Mexico, or investigating why we have some 30K muslims here on expired student Visas. Or maybe why the Obama administration thinks the DoJ is doing the right thing by not holding anymore deportation hearings or why it is okay to ignore the law regarding gays in the military. You know, REAL crimes.
Report Post »rienheart
Posted on August 31, 2011 at 12:00pmActually NOW it should be called THE INJUSTICE DEPARTMENT, because IT IS, as with all 3 branches of our Government. TYRANNY RULES OUR COUNTRY!!! WAKE UP!!!
Report Post »IndianaJan
Posted on August 31, 2011 at 11:58amAnd why would they do this, when they were FINE with the Comcast-NBC merger earlier this year?
http://money.cnn.com/2011/01/18/technology/fcc_comcast_nbc/index.htm
Just wondering…
Report Post »kentuckypatriot
Posted on August 31, 2011 at 12:28pmGood point! But we need to read between the lines: Comcast / NBC is in Dumbo’s back pocket, remember? Maybe AT&T is more on the conservative side? Sounds political to me.
Report Post »Ken
Posted on August 31, 2011 at 11:55amI’d tell AT&T to wait until after the next election, then the DOJ will drop the issue!
Report Post »JRook
Posted on August 31, 2011 at 11:46amWould rather see the Fed’s review anti-competitive practices with regard to cell phones in the US in terms of restricted access supported by all carriers. That is like Europe cell phone purchases and air plans should be separated. Also collusion with regard to pricing. And of course the ongoing decline in service quality across all carriers. Certainly, letting AT&T purchase T Mobile will not make this anymore of a free market than it is now. Would like to see more support of the consumer as opposed to AT&T.
Report Post »Stoic one
Posted on August 31, 2011 at 11:38amAnything this fed administration touches seems to wither and die.
If we go back to smoke signals, do you think O will tax the smoke???
Report Post »I do
CrazyTexan
Posted on August 31, 2011 at 11:36amWhile they are in the business of monopoly busting perhaps they should take a closer look at General Electric…
Report Post »Matrhorn
Posted on August 31, 2011 at 11:35amIf only the government would let the market sort things out and stop trying to get involved and mess things up… But that might never happen…
If they are so concerned about not having enough competition, than why have they not tried to do anything about that fact that their is only Mac and Windows when it comes to the fact that they pretty much rule the computer world. In fact, now a days, both companies work together on a lot of things…lol.
The government is not really interested in making sure their enough competition. Instead they are interested in control and excercising their power (their unconstitutional power).
Report Post »MichiganPatriot
Posted on August 31, 2011 at 11:32amI think the Justice department is sticking it’s nose where it does not belong again, no wonder people say the free market is dead. When a company cannot buy out the competition and improve its base, there is something very wrong…nationalized phone service soon too come…mark my words!
Report Post »heyjim55
Posted on August 31, 2011 at 11:40amI think they are correct this take over crap has to stop allowing it to happen means the end to a free market system. If they allow it there will be fewer choices for the consumer we will be ultimately forced to choose only one provider how is that a free market? Free market for the corporations but not the consumer? It’s bad enough with Comcast.
Report Post »JRook
Posted on August 31, 2011 at 2:20pm@heyjim55 U r correct the whole review is based on the projected impact on the free market. Monopolies and Oligopolies are contrary to a free market. So there is no confusion free markets are supposed to benefit the buyers more so than the suppliers. So if you are going to error you error in favor of the buyer or consumer. How about AT&T just provide better service at a better price and take the customers away from T Mobile. Obtaining market share by buying the company because you have been unable to do so is contrary to operation of a true free market. It certainly doesn’t mean AT&T will improve service or reduce prices. They could have and would have to attract the customers if that was their intention.
Report Post »True American66
Posted on August 31, 2011 at 11:25amIt couldn’t be that this is a DALLAS-based business could it? Wow, how low will this administration sink? If I’m not mistaken, there is Verizon, AT & T, Sprint, T-Mobile, & Cricket; how would the deal violate anti-trust laws? There would still be competition; it wouldn’t be a monopoly.
Report Post »JRook
Posted on August 31, 2011 at 2:23pmI realize this is the hot bed of conspiracy theories but I really don’t think it has anything to do with Texas. And leaving only three players would leave us with an oligopoly similar to other utilities…..Look what that has done in terms of competition. No AT&T should go out and offer more for less and earn the business. That would benefit the customers overall and increase competitiveness in the market. The best situation for a maintenance of a free market.
Report Post »TreyMays
Posted on August 31, 2011 at 11:25amHere’s some research Obama Administration needs to read concerning the AT&T/T-Mobile deal:
Report Post »1. http://www.heritage.org/Research/Commentary/2011/05/ATTs-Play-for-TMobile-Needs-Only-One-Blessing-Commentary
2. http://www.heritage.org/Research/Reports/2011/05/ATT-Acquisition-of-TMobile-Good-Deal-Bad-Regulatory-Process
3. http://blog.heritage.org/2011/03/22/making-the-right-call-on-att-and-t-mobile/
JRook
Posted on August 31, 2011 at 2:52pmAll interesting and selective pieces and points. For example, a reduction of 50% in cell phone rates adjusted for inflation over 10 years is not really that impressive when you are talking about a technology market. Second, the free market of importance here is the free market that includes the consumer. Let AT&T offer more services, higher quality and lower prices within the free market to gain the market share. If T Mobile folds than so be it. Government role is exactly to protect the operation of the free market for the benefit of consumers, not the merger and acquisition business. I would argue that the reason the 5 mergers and acquisitions occurred was to gain greater influence on the market in response to the lower cell phone prices. As the concentration of companies increases, competition in the market always goes down at the expense of consumers. There countless examples.
Report Post »W9VLY
Posted on August 31, 2011 at 11:17amSO if we block the buy, T-mobile will most likely close up shop (parent company “does not want to put more funds into it…”) and those jobs and the competition will be gone anyways…Obama job creation in action…
Report Post »