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Judge in AT&T antitrust case looks for compromise

Written by Rich Fiscus (Google+) @ 07 Sep 2011 12:00 User comments (3)

Judge in AT&T antitrust case looks for compromise The federal judge hearing the antitrust lawsuit brought by the US Department Of Justice opposing AT&T's acquisition of T-Mobile wants both sides to discuss a settlement.
On Monday Judge Ellen S. Huvelle ordered that "the parties shall be prepared to discuss the prospects for settlement," at a status conference scheduled for September 21.

It's hard to imagine how any deal could be worked out which would address Justice Department concerns that reducing the number of major US mobile carriers by one quarter would be bad for consumers in almost every way possible.

AT&T, Verizon, T-Mobile & Sprint are the only national carriers in the US. Of that group, Verizon and AT&T lead Sprint and T-Mobile in revenue by a wide margin.

Many people, including Sprint executives, are worried that the loss of T-Mobile as a competitive force would ultimately result in reducing that number to just two.

The DOJ lawsuit alleges:

The proposed merger likely would lessen competition through elimination of head-to-head competition between AT&T and T-Mobile. Mobile wireless carriers sell differentiated services. Among the differentiating characteristics of greatest importance to consumers are price, network coverage, service quality, customer support, and device options. Not only do the carriers' offerings differ, but consumers have differing preferences as well. Because both carriers and consumers are diverse, customers differ as to the firms that are their closest and most desired alternatives. Where there is significant substitution between the merging firms by a substantial share of consumers, anti competitive effects are likely to result. Documents produced by AT&T and T -Mobile establish that a significant portion of customers who "chum" from AT&T switch to T-Mobile, and vice versa. This shows a significant degree ohead-to-head competition between the two companies, as demonstrated by T-Mobile's recent television ads directly targeting AT&T. The proposed merger would, therefore, likely eliminate important competition between AT&T and T-Mobile.

Moreover, tens of millions of Americans have selected T-Mobile as their mobile wireless carrier because of its unique combination of services, plans, devices, network coverage, features, and award-winning customer service. By eliminating T-Mobile as an independent competitor, the proposed transaction likely will reduce innovation and product variety.

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3 user comments

17.9.2011 19:18

lol too funny
US Department Of Justice why don't you make att sell all phones unlocked and world ready, force them to make available all models type and sizes on a consumer wallet friendly plan stop them from offering the small crap cheap phones,stop them from offering the cheap phones for 50 dollars or the miss leading free phone offer with a 2 year contract. make them offer the top 10 phones that consumers want or are using as the $50 or free offer .. as it is right now im on a 32gb 3gs off contract but my upgrade offer is a small samsung flip phone type how is that an up grade from a 32gb 3gs iphone ??????

27.9.2011 21:51

Compromise = More bribes

39.9.2011 10:09

It is surely a funny situation. Here in India - which is 1/3 the size of mainland US (minus Alaska) we have more than 10 national carriers. This keeps our mobile charges lowest in the world. The hardware employed by the carriers is the same and comes at a higher cost due to duty structure. All the phones sold are UNLOCKED. The phone numbers are portable. Even the CDMA phones can be transferred from one carrier to another. The country with probably the strongest anti-trust legislation on the statutes is allowing monopolistic mergers! Yes but then this is the democracy and free market preached by it to the rest of the world. No, thanks. I am happy with our "Socialistic Democracy" and government regulations looking after the interests of the consumer.

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