AT&T is prepared to make sacrifices in an effort to sway the U.S. Department of Justice and the Federal Communications Commission in favor of its planned $39 billion acquisition of T-Mobile, Reuters reported on Friday. On August 31st, the U.S. Department of Justice filed a lawsuit against AT&T in attempt to block the merger, a move that is said to have caught both AT&T and T-Mobile USA’s owner, Deutsche Telekom, off-guard. “AT&T is pretty determined that they can find a solution, and they are pretty confident,” one source told Reuters, which noted AT&T’s “two-track” plan that includes possibly selling off as much as 25% of T-Mobile, including customers and spectrum, if the deal is approved. It is still unclear who could be a potential customer for the assets, however, as the government could investigate Sprint or Verizon Wireless if either carrier chose to purchase those assets. Reuters said U.S. District Judge Ellen Segal Huvelle will preside over the case and said Huvelle is known for moving swiftly. AT&T has asked for an expedited hearing and the case could be heard within the next two months. More →
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.” More →
The U.S. Department of Justice’s decision to file a lawsuit in an attempt to block AT&T’s planned $39 billion acquisition of T-Mobile USA caught Deutsche Telekom CEO Rene Obermann off-guard while he was meeting with a team of managers and his supervisory board, a board member told Bloomberg on Thursday. Deutsche Telekom, AT&T and T-Mobile had all been confident that the deal would be approved in March of next year. Speaking during the IFA trade show in Berlin, head of Deutsche Telekom Germany Niek Jan van Damme echoed AT&T’s commitment to continue to fight for the deal’s approval. “We’re staying in it,” Van Damme said. “Other scenarios were not being discussed. When you are in a deal, you stick to that deal, a clear focus on that deal.” Obermann has said his company will work with AT&T to contest the DOJ’s lawsuit, which Van Damme seemed to shrug off. “When it comes to larger M&A deals in the US, these things happen,” he said. “This isn’t an exception. We have everything under control.” If the federal government does successfully block the deal, AT&T will be required to pay T-Mobile USA $6 billion in cash and assets. More →
Sprint’s senior vice president of government affairs Vonya B. McCann issued the following statement in response to the Department of Justice’s attempt to block AT&T’s planned $39 billion acquisition of T-Mobile USA:
The DOJ today delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first. Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.
AT&T responded to the DOJ earlier on Wednesday noting it will ask for an expedited hearing, and said “the facts will prevail in court.” FCC Chairman Julius also said the FCC has ‘serious concerns‘ about the impact of the merger.
AT&T has issued a formal response to the U.S. government’s lawsuit seeking to blocking the carrier’s $39 billion acquisition of T-Mobile USA. “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,” said AT&T Senior Executive Vice President and General Counsel Wayne Watts in a statement delivered to BGR via email. “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.” Watts continued, “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’s full statement follows below.
In a letter to the U.S. Department of Justice and Federal Communications Commission, Microsoft and other companies expressed their support for AT&T’s proposed $39 billion acquisition of T-Mobile USA. “Many policy-related efforts will not be able to quickly address near-term capacity needs,” the letter stated. “The FCC must seriously weigh the benefits of this merger and approve it.” Other big names, such as Facebook, Research in Motion, Oracle and Yahoo!, have also voiced support for the merger, while Sprint has been the most outspoken opponent of the deal, which would make it the smallest major carrier in the U.S. behind AT&T and Verizon Wireless. The FCC and DOJ are in the midst of a thorough review process that promises to scrutinize every aspect of the proposed merger. More →
AT&T will pay T-Mobile $3 billion in cash, a $1 billion roaming agreement, and $2 billion in spectrum if the Federal Communications Commission and the Department of Justice reject AT&T’s proposed $39 billion acquisition of T-Mobile. The agreement’s 15% breakup fee would shatter global records, Reuters said, noting that the 7.7% breakup cash agreement is already high. On Wednesday, AT&T’s CEO Randall Stephenson met with the Senate Judiciary Committee to discuss the acquisition. AT&T’s CEO Randall Stephenson has argued that there’s already plenty of competition in the U.S. wireless market and that the deal will actually create jobs. Similarly, the Communications Workers of America backs the deal and believes it will be a “victory for broadband proponents. AT&T’s competition isn’t so sure. Sprint’s CEO, Dan Hesse said the deal would “stifle innovation” and the carrier believes it would create a “vertically integrated duopoly.” Verizon has kept to itself, but did note that, if confirmed, the deal could be “an excuse for the government to insert itself into the marketplace.” More →
The Department of Justice will perform an “in-depth” investigation of AT&T’s proposition to acquire T-Mobile USA, Reuters is reporting. Such an investigation comes as no surprise, as one FCC official assured the public on April 14th that the acquisition would get a thorough review from government antitrust and communications officials. Bloomberg says that the DoJ can issue a decision in as little as 30 days, however, a “second request,” could mean that the investigation will take longer. AT&T announced its plan to purchase T-Mobile USA from Deutsche Telekom for $39 billion on March 20th. Despite Sprint’s claims that the acquisition will stifle competition in the U.S. wireless market, AT&T has argued that the deal will fuel economic growth and create new jobs. More →
It’s no secret that U.S. wireless provider Sprint is not a fan of the proposed AT&T and T-Mobile merger. The company’s CEO, Dan Hesse, has been very forthcoming with his concerns — mainly that the merger will create a duopoly between AT&T and Verizon Wireless — and now the carrier is looking for even more anti-merger ammunition. Bloomberg is reporting that Sprint representatives have “signed confidentiality agreements in advance of possibly gaining access to filings that won’t be available to the public.” The merger, were it to go through, would relegate Sprint to a distant third-place amongst U.S. wireless carriers, having just over half as many customers as its next competitor, Verizon Wireless. AT&T is seeking FCC and Department of Justice approval for the blockbuster merger that is expected to be complete within the next year. More →
On Tuesday, Verizon Communications agreed to pay $93.5 million to settle a lawsuit filed by the U.S. Justice Department. Verizon was accused of overcharging the U.S. government for both voice and data services. Reuters reports that the the company’s MCI Communications Services unit “invoiced the General Services Administration for various taxes and surcharges in violation of contracts or regulations.” Back in October of 2010, Verizon was ordered by the Federal Communications Commission (FCC) to repay customers more than $52 million for erroneous data charges. More →
The nation’s third largest wireless provider, Sprint Nextel, has issued a statement to voice its concerns over the proposed AT&T and T-Mobile merger. “The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry,” writes Sprint. “AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor.” The company went on to say that the merged GSM carriers, along with Verizon Wireless, would control nearly 80% of the postpaid wireless market in the United States. AT&T’s CEO, Ralph de la Vega, has said that the deal should be approved by both government bodies based on historical precedence. “I think if the criteria that has been used in the past is used against this merger, I think the appropriate authorities will find there will still be plenty of competition left,” said de la Vega in a statement to Mobilized. Should the merger fall through, AT&T could owe Deutsche Telekom as much as $3 billion. More →
The U.S. Department of Justice’s investigation of Apple’s alleged anti-competitive practices has grown to include video and other forms of multimedia, the New York Post is reporting. Citing multiple sources, the Post claims that the DoJ has queried several major media companies asking whether or not they feel Apple is in a position of undue influence over their products. A similar investigation focusing on Apple’s dominance in digital music was said to have commenced earlier this week. Whether or not this will eventually lead to a full-blown antitrust lawsuit being slapped against Apple is unclear, but it seems logical that if anyone is going want to do battle with Apple it’s the tough-talking Hollywood folk. As one of the Post’s insiders said, “you can’t dictate terms to the industry.” Trust us, we know. More →
And it has happened once again. The New York Times published an interesting article this evening which alleges that the U.S. Department of Justice has kicked off another anti-trust investigation that focuses in on Apple. Unlike the other two ongoing investigations which deal with Apple’s lockout of Flash in the iPhone OS and its upcoming iAd service, this time around its Apple’s strangle-hold grip on the digital music marketplace that’s getting all of the attention. Here specifically is what the NYT said triggered the investigation.
In March, Billboard magazine reported that Amazon.com was asking music labels to give it the exclusive right to sell certain soon-to-be-released songs for one day before the songs go on sale more widely. In exchange, Amazon promised to include those songs in a promotion on Amazon’s Web site called “MP3 Daily Deal.”
Representatives from Apple’s music service, iTunes, were asking the labels not to take part in Amazon’s promotion, and Apple punished those that did by later withdrawing marketing support for those songs on iTunes, the magazine reported.
So far the Department of Justice has not proceeded past the inquiry stage, but it doesn’t exactly reflect well upon Apple that this is the third time this month the agency has poked its nose in Apple’s affairs. More →