Roaming Agreements Remain an Issue in Antitrust Suits

By Wayne Rash  |  Posted 2011-11-03 Print this article Print

However, both Sprint and Cellular South claimed that the concentration of the market post-merger would prevent the companies from having access to the latest and most desirable handsets and that in turn would make the market anti-competitive. Judge Huvelle noted that AT&T's arrangement with Apple for exclusive access to the iPhone prevented Sprint and Cellular South from selling this product for nearly five years.

Because AT&T had demonstrated that it was able to make such an exclusive arrangement in the first place and to keep it in place for so long made it clear that Sprint and Cellular South had a valid complaint. As a result the court upheld the ability of both companies to pursue an antitrust suit on this basis.

Both companies also included the cost of roaming in their antitrust complaint against AT&T. Here the court noted that while it was possible that the merger could result in higher roaming charges for Sprint, the court also noted that Sprint's technology means that its phones can't roam on AT&T's network in any case. However, the part of Cellular South that uses GSM technology would have no choice but to roam on AT&T's network, since post-merger that would be the only nationwide carrier available.

In its complaint, Cellular South noted that AT&T had demonstrated that it was unwilling to allow roaming agreements at all or when AT&T was willing to allow roaming agreements it made them so expensive that it made roaming impractical. Cellular South noted that this practice was in violation of the FCC's requirement that carriers negotiate roaming agreements and that they do so at a reasonable price. The court agreed that AT&T had apparently failed to act in good faith and as a result allowed roaming agreements to be included in Cellular South's antitrust suit.

Judge Huvelle's decision is based in large part on the assumption that AT&T's proposed acquisition of T-Mobile would violate section 7 of the Clayton Act. This does not, however, mean that the judge is making the decision that AT&T is in fact in violation of antitrust laws. The assumption is made because it's necessary for the inquiry to proceed. The actual decision on whether AT&T's purchase of T-Mobile would violate antitrust laws will be made following the trial that starts in February.

However, the outcome of this hearing does have important consequences for AT&T. First, it means that the company will have to fight three antitrust suits instead of one. Second it shows that the judge isn't taking sides; this decision gave something to each side in the case, but ultimately allowed the private antitrust suits to go forward.

What this ultimately means is that even if political pressure on the Justice Department induces the government to drop its case against AT&T (which is unlikely at this point, but could happen if the trial drags out past the 2012 presidential election and the Republicans win), the Sprint and Cellular South antitrust suit will survive and the merger could still be prevented if the decision goes against AT&T. 

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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