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Trust and Anti-Trust

Thank goodness someone is standing up to big monopolies and illegal anti-competitive behavior. The Department of Justice announced today that it is filing suit to block AT&T from acquiring competitor T-Mobile on antitrust grounds. I applaud the DOJ for taking our vital antitrust laws seriously.

Of course, AT&T claims that the proposed merger is not anti-competitive, saying “We remain confident that this merger is in the best interest of consumers and our country.” When a company only has three competitors and seeks to eliminate one of them, how can that not be anti-competitive?

And the stock market seems to agree. Not only did AT&T’s shares fall today on the announcement, but shares in Sprint/Nextel soared 7.6%. Merging AT&T with T-Mobile would have created the largest cell phone company in the US and reduce the number of players in the market from four to three.

Eliminating T-Mobile would have been especially bad for innovation in the mobile phone business. T-Mobile was the first carrier to offer a smartphone based on the Android OS, the first Blackberry e-mail over wireless, the first national Wi-Fi hotspot access, and the first nationwide advanced HSPA+ data network. They also managed to undercut AT&T on prices. No wonder AT&T wanted to buy them out.



  1. Alvin B. wrote:

    As a T-Mobile customer, the idea of an AT&T merger has really made me mad at a carrier I used to actively promote. Already many policies have been changed to less consumer-friendly styles, such as requiring contracts on non-subsidized plans, charging per-byte data for customers who don’t buy a data plan, and many other things that Magenta used to not do.

    However, at this point, I think the damage is done. AT&T has successfully killed T-Mobile in the marketplace already just by ruining public perception of the company. A company that before the merger plan was JD Power’s #1 customer service now mistreats its customers. A company that once had plans to grow now has stagnated. They have killed the company’s goodwill with its subscribers. In effect, just by threatening the merger, they have achieved everything they want: T-Mobile is now no longer a “top” competitor, and will never again be a contender. It will likely be bought either by Sprint, or by some “private holding group” and then be rammed into the ground until all its customers leave.

    Wednesday, August 31, 2011 at 11:22 am | Permalink
  2. Bard wrote:

    Its amazing how quickly the mobile market has centralized into 4 major players. I remember when I got my one and only cell phone I was able to talk to a bunch of different companies and find the best deal. I was even able to play them off of one another. They’ll eventually finish merging. Just like how AT&T eventually got back all the baby bells.

    Wednesday, August 31, 2011 at 2:55 pm | Permalink
  3. No u wrote:

    Surprised this decision took this long, seemed pretty obvious to most of us

    Wednesday, August 31, 2011 at 3:23 pm | Permalink
  4. Anonymous wrote:

    I almost changed to T-Mobile (I-Wireless here) but the ATT talk changed my mind, that and US Cellular building a tower 150 yds from my house.

    Wednesday, August 31, 2011 at 6:36 pm | Permalink
  5. Trip Ericson wrote:

    Anonymous, I love US Cellular too. Given the horror stories I hear about the other carriers, I never want to give up my US Cellular phone.

    Friday, September 2, 2011 at 10:44 am | Permalink