U.S. DOJ sues to block AT&T’s $39 billion acquisition of T-Mobile USA

“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. That’s according to a person familiar with the matter,” The Associated Press reports. “AT&T could challenge the Justice Department’s action in court.”

Read more in the full article here.

Tom Schoenberg reports for Bloomberg, “The U.S. government sued to block AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would ‘substantially lessen competition’ in the wireless market. AT&T shares fell as much as 5 percent.”

“In the complaint 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,” Schoenberg reports. “The U.S. also asked for a court order blocking any arrangement implementing the deal.”

Schoenberg reports, “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… ‘Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,’ said Andrew Gavil, a law professor at Howard University in Washington. ‘The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point.'”

Read more in the full article here.
 

[Thanks to MacDailyNews Readers “Manny S.” and “David M.” for the heads up.]

40 Comments

        1. Who was AT&T’s competition before the break-up?

          The only thing this AT&T shares with old Ma Bell is the name. With this acquistion, AT&T will only be about the same size as one of its competitor’s. You’re comparing apples to oranges.

          I’m not saying that I want the acquisition to be approved. I’m undecided on that.

          However, it’s quite naive to think like maclouie that this won’t cost taxpayer money. There are no free lunches.

    1. Whatever said:
      “How much freaking tax money is this gonna cost us.”

      That’s the DOJ job.

      Hurricane, How much freaking tax money is this gonna cost us

      Tornado, How much freaking tax money is this gonna cost us

      Earthquake, How much freaking tax money is this gonna cost us

      The poor, How much freaking tax money is this gonna cost us

      One day we will back at this time period and view it with disbelief as we today look back at a time when there were signs saying “White Only Counter”.

    1. AT&T, you should have donated (payed off) more money to the democrat power block. Now it is really gonna cost you and all of us (the AT&T customers that will be billed for this donation/pay off). Maybe if you tell them that you will set up your new USA call center in a heavily unionized democratic voting city, they will Ok it for you.

  1. I am so happy the U.S. government is blocking this move.
    Now Apple needs to get off its butt and stop doing AT&T’s dirty work for them…Release a T-Mobile iPhone already!!!!! Let competition get the telecom prices down!!!!!!!

    just my $0.02

  2. Instead of worrying about an insignificant merger. If money losing T-Mobile USA closes its doors, tell me how that is beneficial to anyone versus being incorporated into ATT?

    But more importantly, why hasn’t the DoJ been sunshine-like and as transparent as Obama said they would be and have Holder release the requested documents to the Congressional oversight committee looking into the ‘Fast and Furious’ debacle and to ensure those checks and balances everyone talks about that is a necessity for our government to work? Hmmmm? No one has died from the prospect of a ATT T-Mobile merger. Unfortunately, can’t say the same regarding ‘Fast and Furious’!

    C’mon DoJ do the right thing!

      1. No T-mobile does lose money now, but Sprint does. Question is whether US customer base can support 4 carriers going forward. IF yes, then block this merge. If 2-3 years down the road, one of them files bankruptcy, then AT&T may even get a better deal than. In that sense, government may actually help AT&T here.

  3. Halle-f—ing-leujah.

    Dear AT&T what you need is market competition, not market consolidation. Maybe I should move my account to a different carrier when the iPhone 5 comes out.

  4. I agree with the government’s decision. When ATT decided to force anyone who wanted to send or receive a few texts to a very expensive $20/month unlimited text message plan, that was the tell for me as to the effects of this merger.

      1. Would you order Kenyan-American. Believe the birthers or not, Barack is half Kenyan. He is also Indonesian (raised and educated there, and the enrollment form lists his nationality as Indonesian). So, why be offended at the Kenyan remark. Whatever the intent, the statement is undisputably factual.

        Had he said, “dump the African-American,” you would have probably been equally offended, even though he would be using the politically correct term.

        Bottom line, the next worse president was Jimmy Carter (a white guy), and BHO is only the worst because of policy, not because of skin color. In fact, I’m offended that he is called a black man. He is equal parts white and black. Why do people insist on robbing me of his association to me? He is as much my skin color as he isn’t.

    1. Jimmy Carter was a fine human being. If we had stuck with his alternative energy initiatives, then the country would be far better off right now. He lost his bid for a second term primarily because of the Iranian Hostage Crisis. That’s right – U.S. citizens allows radical elements in Iran to chart the course of a Presidential election. lol at the far right.

  5. YES! Finally Obama does something right (other than pass a law barring insurance companies from denying health care to people with pre-exisiting health conditions, which the heartless Republican party wants to repeal).

    Our carrier situation is already bleak; this merger would’ve made it even worse.

  6. I was having an interesting conversation with a couple friends of mine about the merger yesterday. Both are cell site support managers, one for AT&T, and the other for T-Mobile. AT&T really could use T-Mobile’s cell sites and spectrum. It would make the performance of AT&T’s network much better, and fill in a lot of coverage gaps. As an AT&T user, that sounds like a good thing to me. I don’t think they are going to suddenly raise all their prices if the merger goes through. They still have to compete with Verizon and Sprint. Sprint may have unlimited data now, but if they get the iPhone, I’ll bet that doesn’t last long. Carriers are seeing a drop in voice call usage, and a huge increase in data usage. I think we’re going to see voice plans get less expensive, and more tiered data plans, with caps and overage fees. This is the future, and it doesn’t matter if the merger does through or not. That’s just what they’ll have to do to stay profitable. Guess I’ll be using WiFi more.

    1. “I don’t think they are going to suddenly raise all their prices if the merger goes through. They still have to compete with Verizon and Sprint”

      You’d think that, you’d be wrong. Canada has 3 nation-wide carriers (and various subsidiaries), instead of competing properly they just increase prices in lockstep fashion. Any “competition” is purely superficial, or timed for major releases (e.g. new iPhone pending, and all three offer the 6 GB data option again).

      1. Not sure why having 4 vs. 3 major carriers would magically prevent that. All of them are seeing a decrease in voice usage, and an increase in data usage. Their revenue from voice services will fall, and the load on their infrastructure for data will increase. Makes sense to shift the revenue focus to data, since that is where most of their costs will come from as well.

      2. same thing happened with the airline industry, & they are price fixing and consorting with each other. Airline prices are high and not coming down, but they show you a lower price up front, then hit you with carry on fees and luggage fees and insurance, etc.

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