ATandT, T-Mobile Face Deeper Probe from Justice Department: Report

 
 
By Michelle Maisto  |  Posted 2011-05-03 Email Print this article Print
 
 
 
 
 
 
 

The Justice Department is asking AT&T and T-Mobile for additional details on their proposed deal, as well as querying some of the pair's competitors, according to a report.

Taking a deeper dive into the details of AT&T's proposed $39 billion purchase of competitor T-Mobile, the U.S. Justice Department has requested additional information from both carriers.

The agency has also requested information from the pair's competitors regarding how the deal will affect their businesses, Bloomberg reported May 3, citing people familiar with the situation.

According to the Bloomberg report, the second round of request for information to both AT&T and T-Mobile will enable the DOJ to extend its review of the proposed deal indefinitely. Soon after the transaction was announced, industry observers said the regulatory review of the deal could take as long as a year.

Since AT&T's March 20 announcement of the deal, which would accelerate the carrier's 4G LTE (long-term evolution) network build-out plans and quickly make it a dominant player in the wireless space, the possible repercussions of the deal have been questioned.

Sprint, the nation's third-largest carrier-and a likely recipient of request from the DOJ looking for comment from competitors-was quick to object to the proposed union between the second- and fourth-largest carriers. In a March 28 statement, it vowed to fight the purchase, which it said would hurt innovation, job creation, investment in the American economy and "reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition."

In recent quarters, Sprint has worked hard to build back up a faltering business, and on April 28 it announced it had added 1.1 million wireless subscribers during its first quarter-its best results in five years. Sprint CEO Dan Hesse, during the earnings call, again criticized the proposed AT&T deal by describing what he said was the importance of having a "legitimate" third competitor in the marketplace. It was Sprint's "innovative influence" in the 4G market that lit a fire under Verizon and likewise sped up AT&T's 4G deployment timetable, he said, leading the combined result of the United States regaining its "wireless network technology innovation and supremacy," due to its leadership in 4G.  

"Sprint is pro-competitive," he added, "and our investment thesis is that all boats will float higher in a vibrant and innovative industry, especially an industry that has the unbridled potential of wireless."

AT&T CEO Randall Stephenson has called the market "fiercely competitive," and in an April 4 interview with USA Today insisted that it will still "be a fiercely competitive market after this deal is done."

The carrier has also argued that its purchase of T-Mobile would help further the Obama administration's pledge to extend 4G technology to more Americans, helping to "create new jobs and economic growth in the small towns and rural communities that need them most."

The Federal Communications Commission has promised to proceed slowly and cautiously on the matter, with the "burden of proof" put on AT&T to prove whether the FCC's approval of the deal would serve the public interest. Some commissioners have been open in their skepticism of the deal. Commissioner Michael Copps, in an April 2 interview on C-SPAN's "The Communicators," said the deal would "suck the oxygen out of so many issues" currently pending before the FCC, and that he hoped his colleagues would ask themselves serious questions about "what residue of competition" would be left behind, should the deal be approved.

Since the FCC began taking comments on the proposed AT&T purchase three weeks ago, nearly 3,000 consumers have written in to speak their minds-mostly against the deal, according to The Washington Post. Some T-Mobile customers expressed concern about a price hike, should the deal go through (analysts have suggested the same, though AT&T's Randall has denied it). Other T-Mobile customers fear they'll be saddled with poorer customer service, while one consumer, Haozhe Wang succinctly voiced the concerns of others.

"No monopoly!!" she wrote.

 
 
 
 
 
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
 
 
 
 
 
 
 

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