‘AT&T is certain to lose’ lawsuit with DOJ, former FCC chairman says

By on Sep 2, 2011 at 1:40 PM
Legal September 2, 2011

Former FCC chairman Reed Hundt voiced his opinion on the Department of Justice’s decision to sue AT&T in an effort to block its planned $39 billion merger with T-Mobile USA. “AT&T is certain to lose,” Hundt told SNL. “They can litigate the case to death,” he said noting that the acquisition was anti-competitive. “It’s an extremely easy case. The Department of Justice will win the case in court. No question about it.” According to SNL, AT&T believed federal regulators would consider the acquisition based on a market-to-market analysis, rather than nationwide analysis. Hundt said the DOJ will instead determine whether the deal is anti-competitive or not based on both national and market-by-market investigations. Until recently, AT&T was confident that the acquisition would be approved by March 2012. AT&T vowed to contest the DOJ lawsuit and said it is confident the merger is in the best interest of consumers, and “the facts will prevail in court.” The carrier also said it would consider selling off 25% of T-Mobile USA in an effort to sway federal regulators toward an approval. Deutsche Telekom’s CEO Rene Obermann said on Thursday that both firms “have everything under control.”

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  • Anonymous

    SNL’s getting less and less funny all the time.

    • Doug Simmons

      Argh damnit you beat me to it :)

    • Anonymous

      Me too. I thought the same thing! +1 because you beat me. 

  • http://jpearls.myopenid.com/ earls

    Right, because the decision has already been made.  The court proceedings are for the sake of protocol / appearance.

    AT&T argues the merger is beneficial because:

    1. Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.

    2. Allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97% of the population.

    3. Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.One, I agree with – but I believe that is a policy / technology issue. There has got to be spectrum out there that can be utilized that is worth a damn. [The problem] AT&T is alluding to is that T-Mobile currently broadcasts on the highest frequency spectrum in the US. The higher the frequency, the lower the penetration of buildings and trees. So their service is sub-par because the need more tower and higher power to cover the same area as say Verizon Wireless, who has the lowest frequency. This is because the existed before T-Mobile and outbid everyone due to their overwhelming marketshare. T-Mobile showed up late to the game and got the left overs.

    Two and three are easily solved by hiring and building your own network out, not trying to take a shortcut of consuming competition to seize their already deployed equipment.

    People can twist it anyway they like, it has been proven time and time and time again, MORE COMPETITION > LESS COMPETITION.

    • Bullet Tooth Tony

      … no it isn’t.

      But strong competition is better than weak competition.  Guess which one we’d have with T-Mobile existing as is?

    • James Richmond

      How will having one less company increase jobs? Any new hiring they do to build up the network, will be temporary and will be over taken by the number of redundant workers they’ll fire after they merge. Saying that it will increase jobs is nothing but voodoo economics.

      • Ezzyme

        You mean a lie.

  • Robert Dunn

    I love how AT&T claims the merger is in the “Best Interests of Consumers” LOL 

  • Anonymous

    Okay….
    So ATT cannot buy TMob….
    Some time in the not distant future ATT can pick up the bandwidth of TMob at auction as TMob folds.
    It is not doing well, has no bandwidth to build LTE….

    So condemn.  Unless of course the DOJ plans on providing both cash and bandwidth for TMob?

    Thought not.

    • Love2track

      AT&T will via $3billion cash and spectrum due to the breakup penalty.

      • Swav

        DT is getting the $3bil, tmob is getting the spectrum.

        Tmob will remain unprofitable until someone else buys it out or it folds over. DT does not intend to keep tmob USA alive. This merger is best for the company.

      • Draxlith

        They may not intend to keep it, but that doesn’t mean that there isn’t someone better to buy T-mo. Imagine another company who is not already a wireless provider taking them over. Way better, pretty much no matter who it would be. Why? Because most of the workers would keep their jobs, unlike what would happen if the Death Star is allowed to gobble them up.

        Also, T-Mo actually isn’t unprofitable, it is just not as profitable as DT would like. You know, all that money needs to come short term from little work, having to tough it out is hard, might as well sell em off.

      • Anonymous

        do you realize how much money tmo will save if this merger fails? roaming agreements on 3g which wasnt possible before. this will bring in customers

      • Anonymous

        AT&T will easily make up that 3 billion if T-Mobile goes under. All those folks that need GSM service will have nowhere to turn besides AT&T. Plus every foreigner that travels to the United States will be roaming on the AT&T network. If T-Mobile stays in business they will make it up on the backs of their customers.

      • 123

        And you think at&t doesn’t make their returns from the backs og their customers? They are a souless greedy machine that is run by the most ruthless patriarch money could buy. Check into the per month profit they make.

      • Anonymous

        you do realize that those gsm folks will still have to buy new phones correct?

  • Anonymous

    Called it!

  • Michale11111

    I so hope this is true. This deal will do nothing other than screw consumers. And that garbage about 5000 jobs? Is that after they fire all the office people, store front workers and headquarters employees? If the deal goes through there will be a net loss of jobs, increased pricing to consumers and a loss of choice. That AT&T expects anyone to believe differently is an insult to even an ant’s intelligence.

  • Jostajtf

    AT&T = Devil

  • Anonymous

    Rene Obermann says that both firms “have everything under control.” Didn’t the captain of the Titanic say the same thing?

  • Anonymous

    Either way its a lost to the consumers. If the deal is approved it will result in higher prices being passed on to the consumers because someone has to pay that purchase price of $39 billion. The merger would be benificial to the consumers if AT&T actually deployed LTE coverage to all the areas they pledge to do so. If the deal doesn’t go through they lose $6 billion. There goes cash that could’ve gone to building out the network to cover all those areas they pledge to do so in if the merger is approved. Hence if you don’t live a major city.. Good luck with that!!! The consumers will also share the burden of that $6 billion braek up.

  • Anonymous

    Poor AT&Tedious; they will never have a REAL network -
    True Story™®©

  • Anonymous

    Look here people. I have AT&T service and the reports of dropped calls are over-ratt… hummmm

    • frhh189

      +1 well played

  • Anonymous

    I like how everyone here is an expert and works for the DOJ/FCC.

    All this “higher prices” talk is purely speculation. Biased at that.

    • KickATTInTheBalls

      Holy crap! Where have you been? Look at history – Cingular sound familiar? Hell, don’t even go back in history! price out existing comparable plans between the providers. AT&T continues to rape its customers, and prices keep going up, and up and up…..

      • Anonymous

        But AT&T does it less than VZW.

    • Wirelessmodz

      You’re a dam fool true story

  • CB

    If the deal doesn’t go through and T-Mobile gets paid 6 billion and gets the iPhone, AT&T may end up being the 4th place carrier!!

  • Scott Duffy

    As an AT&T customer, I don’t want this merger to happen. On the plus, yeah, they’ll have more spectrum, which “should” help build a better network, however, I’ve yet to see AT&T build a good network. They only have 5 cities with LTE, and maybe 15 by the end of the year. Their largest competitor started off with over 30 cities. Not only are they not competent to build a good network, they are going to hurt the wireless competition by taking out the only other GSM provider. For this and the amount of lost jobs, I am against it. GO DOJ!

    • Anonymous

      One reason that AT&T can’t build a good network or get decent customer service is because they get rid of employees once they get older and make good money. You can’t get rid of experienced employees that know what they’re doing in favor of cheaper less experienced help and expect quality.

  • Anonymous

    time to short mr. att

  • Anonymous

    AT&T will pay anybody within the courts to get the deal done. but AT&t give it up. Everyone is mad at you cause you know you will take away the T-Mobile brand

  • Austinlicious

    AT&T is the worst monopoly out there.  I hope some class action attorney’s sue the company out of existence.  AT&T figures money will buy everything, including the lobbyist who buy off the fed’s and member’s of congress.
    AT&T needs to be again split up, before they force all the carriers out of business and competition comes to an end.

    • Tim242

      I hate att as much as you do…and I work there. Ugggh. However, they cannot be sued by customers. There is an arbitration clause in every contract.

  • Anonymous

    If AT&T is so confident of securing DOJ and FCC approval my 4/12, why are they talking:
    1) Divesting up to 25% of holdings and
    2) bringing 5,000 jobs back to the USA?

    Quite a concession by AT&T given that suit was just filed and no airing of the facts through discovery has taken place yet.

  • NDno

    That’s a surprise, Reed Hund, known socialist hates business and progress.  Color me surprised.  The deal will go through.  Enjoy the theatrics in the meantime.

    • ElectricBoy

      At&t winning would be a win for the great for the customer. They would be acquiring their old network back, that they sold to t-mobile. Better coverage, less data congestion and more towers to take the weight off of what the iphone did to their data. Not saying at&t doesn’t have a good network. They do. Iphone is such a bog on any system. Verizon’s towers went down 2days after the iphone launch.  All in all.  The merger is something they want and customers need.  Who doesn’t want better reception.  Who doesn’t want faster speeds.  Plus having LTE coming.  This will allow customers better voice coverage too. *Great for consumers *Good for At&t.

    • Anonymous

      Yeah… everyone who is opposed to monopolies and having our lives controled by giant corporations is a Socialist.

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