The U.S. Government is now trying to block the sale of T-Mobile to AT&T, claiming the deal would “substantially lessen competition” in the wireless market. The Justice Department complaint filed today says that it feels the American people would suffer if the deal was allowed to go through, ultimately paying higher prices for poorer-quality services.
“The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said Deputy Attorney General James M. Cole. “Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.”
“T-Mobile has been an important source of competition among the national carriers, including through innovation and quality enhancements such as the roll-out of the first nationwide high-speed data network,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Unless this merger is blocked, competition and innovation will be reduced, and consumers will suffer.”
Wayne Watts, AT&T Senior Executive Vice President and General Counsel issued the following statement for AT&T:
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 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.
AT&T has reportedly agreed to pay T-Mobile a whopping $6 billion if the merger doesn’t go through. $6 billion could be enough to breathe new life into the carrier, deploy LTE, and put it in a better position in the market.
What do you think about the potential merger of AT&T and T-Mobile? Do you think that if allowed to go through the merger would drive up the price for lower-quality service?