Telecommunications giant AT&T believes that DOJ blindsided it and got it all wrong with it announced it was taking court action to block its $39B acquisition of T-Mobile. In the end, it believes it will prevail. However, numerous interested parties cheered the move.
In a statement, AT&T Senior Executive Vice President and General Counsel Wayne Watts said, “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,” continued Watts. “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 LTE 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.”
Watts concluded, “We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.”
According to the Los Angeles Times, DOJ expects the loss of 20K jobs if the merger is approved if the combined entities follow standard operating procedure and eliminate redundant positions. Union Communications Workers of America, on the other hand, has supported the merger, in part because it would bring non-union T-Mobile workers into AT&T’s union shop, according to LAT.
Free Press and CEO Craig Aaron completely disagreed with AT&T’s Watt, saying, “Blocking this merger is a major victory for the public interest. The Justice Department clearly based its decision on the facts, and, as Free Press has argued from the start, the overwhelming evidence shows that this merger would lead to higher prices and fewer choices for consumers, and massive job cuts. It’s encouraging to see that federal regulators have not been snowed by AT&T’s promises and bluster. Its smoke-and-mirrors effort was a good front for a while, but when you get down to the facts of the matter, this was a bad idea from the start, and no amount of corporate spin can overcome that reality.”
Ryan Radia, Associate Director of Technology Studies for the Competitive Enterprise Institute, was critical of DOJ, saying, “The Department of Justice’s lawsuit amounts to a subversion of the evolution of free enterprise and economic progress. Federal regulators and their arbitrary “merger guidelines” are woefully ill-equipped to judge the merits of proposed business deals, particularly in dynamic modern markets such as the wireless sector. To be sure, no business deal is ever guaranteed to benefit consumers or the economy. But market participants, including upstream suppliers, customers, potential entrants, and capital markets, stand ready to check detrimental concentration in telecommunications if it arises.”
Rep. Ed Markey (D-MA), who has long had an interest in communications issues, gave DOJ a round of applause. He said, “The Justice Department’s decision to take action to block AT&T’s purchase of T-Mobile is a victory for competition, consumers and choice. We should be protecting American consumers holding their cell phones, not just telecommunications titans holding stock in the companies. The merger would reduce the number of national wireless companies from four down to three, sending the mobile marketplace into a telecommunications time machine back to 1993. That would be an historic mistake.”
