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They say to strike while the iron's hot, and that's exactly what Sprint is doing as it attempts to block AT&T from merging with T-Mobile. Less than a week ago, the U.S. Department of Justice filed a civil antitrust lawsuit seeking to block the proposed $39 billion deal, and rather than wait to see how that plays out, Sprint just filed a suit of its own, claiming the potential deal would run afoul of Section 7 of the Clayton Act.
"Sprint opposes AT&T’s proposed takeover of T-Mobile," said Susan Z. Haller, vice president-Litigation, Sprint. "With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal."
Sprint's concerns are threefold. First, Sprint says an AT&T/T-Mobile merger would harm consumers and corporate customers by causing higher prices and stifling innovation, essentially echoing what the DoJ said. Secondly, Sprint fears a duopoly in which AT&T and Verizon would control more than three-quarters of a trillion dollar wireless market, and 90 percent of the profits. And third, Sprint says if the deal was allowed to go through, a combined AT&T and T-Mobile company could use its control over backhaul, roaming and spectrum, and market position to leave competitors out in the cold, raise costs, restrict access to handsets, and generally do things that suck for consumers and the market as a whole.
In related news, if the deal does fall through, Deutsche Telekom (T-Mobile's parent company) has come out and refuted reports that it wouldn't be entitled to an agreed upon $6 billion breakup fee from AT&T if the deal isn't finalized.
"The story from Reuters misstated the facts," Deutsche Telekom representative Andreas Fuchs told CNET in reference to this Reuters report. "The breakup fee was agreed to precisely to deal with the possibility that regulatory approval is not obtained.
Comments are closed on this article
nealtse
September 06, 2011 at 5:51pm
Also note, that if the deal were to go through, AT&T would be the ONLY major GSM player in the industry. Some of us who like to travel like to stick to GSM as we can then keep our phones while we're abroad as most other countries also use GSM.
QUINTIX256
September 06, 2011 at 2:56pm
When my family moved from Cingular to AT&T, my family was not pushed over to cheap phones nor where their rates hiked. I am sure the same thing can be said about former Nextel customers and former Clearwire customers, excluding some not-so-soft-spoken outliers. This is blatant hypocrisy on display.
big_montana
September 06, 2011 at 5:53pm
You were not with AT&T when Cingular purchased them, I was. I was given two months to transition to a more expensive Cingular plan from my much cheaper AT&T plan, or Cingular would choose a plan for me. I, obviously left AT&T since Cingular would not honor my contract, which still had a year left, they tried to get me to pay the ETF fee, but I informed them, since they were the ones that terminated my contract early, the ETF no longer applied as I was a free agent, so please sue me. They never did, I signed with Sprint and have been a very happy Sprint customer ever since. Plus, get your facts right, Cingular purchased A&T, not the other way around.
wcj786
September 06, 2011 at 6:39pm
Actually, you are both right. Cingular DID purchase AT&T Mobility quite a few years ago. At that time, Cingular required customers to change their plans to ones that were handled in the Cingular line.
But, just a couple of years ago, after SBC Communications (the old Southwest Bell) bought AT&T, they changed their name back to AT&T, as they were part of the original AT&T before the DOJ forced AT&T to break up in 1984. The new AT&T (SBC Communcations) then bought BellSouth. This meant that AT&T then owned Cingular completely, as it was previously a joint venture between SBC Communications and BellSouth. When this happened, the Cingular name was changed to AT&T. As the only thing that changed was the name and not any plans, there was no reason to require subscribers to make changes to their plans.
