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dave

U.S. Government files complaint in attempt to block the AT&T / T-Mobile merger.

Big news today for those who've been against the pending AT&T-Mobile merger. The U.S. government has stepped in and sued to stop the merger from going through. The believe such a merger would have significant implications on competition in the mobile industry.

From Bloomberg:

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In the complaint filed today in federal court in Washington, the Justice Department is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law. The U.S. also asked for a court order blocking implementation of the deal.

“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.

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What do you think? Is this a victory for us as consumers?

We've previously discussed the AT&T / T-Mobile merger when it was announced back in March:
1. gdgt.com­/question­/what­-do­-you­-think­-about­-atandt­-a...
2. gdgt.com­/question­/anybody­-else­-worried­-about­-the­-a...

Via: www.bloomberg.com­/news­/2011­-08­-31­/u­-s­-files­-antitr...

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5 replies
roberto

I think it is. More choice is always better for consumers. However, this is still far from a done deal, and I'm afraid that when it comes to these kinds of mega-company mergers, sooner or later they always get what they want.
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groovechicken

Let's not forget that the reality TV show known as "The American Government" has a script to follow, which includes lots of plot turns and twists to keep people believing that it is actually doing real work that achieves real results. Think of this as the classic soap opera plot point where the character who was supposedly dead shows up right before his former lover is to wed so he can prevent the marriage and win her back.

Not to say which way the plot will turn in the end, but rest assured that this particular move won't give you any hints as to the actual outcome since that will likely be decided behind closed doors by details such as how much of the $3,000,000,000 failure payout T-Mobile is willing to share with people in the agencies.

Nothing to see here, just the distraction of the week.
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kris

As a T-Mobile customer for the past seven years I admit that I was not thrilled at the prospect of basically being forced into becoming an AT&T customer. I hear a lot more complaints about AT&T's policies than I hear about T-Mobile, and I'm pretty convinced that with less competition in the market and the influence of AT&T in general would drive my phone bill up.

I mostly made myself feel better by reminding myself that my coverage would probably improve; this wasn't an issue until about two weeks ago when I was at Sterling Forest with my friends and everyone who had T-Mobile had no coverage, while AT&T customers did.

However, the merger hasn't gone through and now might not go through, but T-Mobile prices have been going up anyway. The only thing keeping my phone bill as-is is the fact that I'm grandfathered into the cheap plan that I switched to last year, but now I have no choice but to pay up if I happen to need more features or minutes.

So I'm personally indifferent to the merger being put on hold, but in terms of the market this can only be good news, especially for Sprint (who otherwise faces the threat of standing alone against the forces of AT&T and Verizon).
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frankspin

I still like to be naive and think the merger could be a good thing but the reality of it is that it would be a bad thing if it moved forward. As much as I like to believe the US Gov't is going to help keep this thing from happening, I just don't see it holding up much.
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userd40ad11b74f

I was pleasantly surprised to see that the DOJ (and likely the FCC) wasn't going to just rubber stamp this deal. The competition in the mobile space is pretty darn limited already and removing the main source of price competition would have pretty serious price consequences going forward.

I'm skeptical that the government will actually end up blocking this deal, but it would be a welcome change if they did. Plus, the terms of the deal would end up making T-Mobile a stronger competitor in the market place (AT&T will have to give T-Mobile $3 billion and a nice chunk of premium spectrum if the deal is not completed by the end of 2012).

The bottom line is that we should be working towards having 5 or 6 strong national carriers instead of allowing the existing carriers merge together to form an expensive, slow moving duopoly that provides crappy service at unjustifiably high prices.
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