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DOJ Attempts to Scuttle AT&T's $39B T-Mobile Buy

RedAkston

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DOJ Attempts To Scuttle AT&T's $39B T-Mobile Buy | FoxBusiness.com

The Department of Justice filed an antitrust lawsuit on Wednesday to block AT&T's (T: 28.05, -1.57, -5.30%) $39 billion planned takeover of T-[COLOR=blue !important][FONT=inherit !important][COLOR=blue !important][FONT=inherit !important]Mobile[/FONT][/FONT][/COLOR][/COLOR] USA due to fears the controversial marriage will create higher prices and fewer options for consumers.

The DOJ suit comes just hours after AT&T vowed to return 5,000 outsourced calling-center jobs to the U.S. if regulators sign off on the transaction. That promise, AT&T said, represented the greatest pledge by an American company to return jobs to U.S. soil since 2008.

Hmmm, 5,000 new jobs returning to the US which is struggling to stay out of a double-dip recession and the DOJ blocks it? Good for you Obama! How's that hope and change working out for everyone? :roll:

This is just dumb. The DOJ seems to be picking and choosing who they will side with. Further proof that government needs to stay out of business.
 
Yeah I just read this on CNN. I do not understand the DOJ's logic on this one. I guess they must fear a monopoly on telecommunications?
 
Yeah I just read this on CNN. I do not understand the DOJ's logic on this one. I guess they must fear a monopoly on telecommunications?

I think that and the "too big to fail" thing is the reasoning behind this. Whether it is good reasoning or bad I have no idea, but AT&T attempting to bribe the DOJ with that 5k job offer makes me wonder.
 
I think that and the "too big to fail" thing is the reasoning behind this. Whether it is good reasoning or bad I have no idea, but AT&T attempting to bribe the DOJ with that 5k job offer makes me wonder.

It was a dirty move, but given the economic conditions, the DOJ would be shooting Obama and the Democrats in the foot if they turned it down because it will be perfect fodder for the Republicans.
 
I agree with the decision. The market is not best served by two massive telecom corporations.

And on a more anecdotal note, I have found that being an AT&T customer sucks. I can't express sadness that the company might not be allowed to further metastasize.
 
Typically mergers of similar companies results in layoffs, not job creation as redundant positions are eliminated. As for the pledge to bring back 5000 call centre jobs, ATT could do that anyway could it not? If it makes economic sense they will, if it doesnt the pledge is just that a pledge, one that will most likely not be filled
 
I agree with the decision. The market is not best served by two massive telecom corporations.

And on a more anecdotal note, I have found that being an AT&T customer sucks. I can't express sadness that the company might not be allowed to further metastasize.

If say GM and Ford merged, I'd see your point. But the problem lies in that there is plenty of competition in the cellular market. There are literally over 180 cellular providers in the US - source, so the angle the DOJ is taking in that it would create a monopoly simply doesn't fly in the face of the facts.

AT&T is overpriced and they pretty much do suck. I know someone who works in one of their call centers, so I have knowledge of how they run. I'm currently a T-Mobile customer and I could care less either way to be honest.

As for the 5,000 new jobs promise, I'm a little skeptical as well. There will be layoffs with a merger and how long would these 5,000 jobs remain in place? It is a shot at Obama and his administration and it will be used as campaign fodder for whoever his opponent ends up being. From my perspective, it looks more like the administration is siding with Verizon here more than anything. While both AT&T and Verizon have union employees, the Verizon employees have been on strike. I'm skeptical of the DOJ's angle here in addition to the promise to bring back 5,000 new jobs by AT&T.
 
The quest for bandwidth
Editorial
AT&T sees acquiring T-Mobile as the quickest way to expand its network. But what about consumers?

The rapidly increasing demand for smartphones and mobile bandwidth has prompted some analysts and regulators to warn of a looming wireless traffic jam — an irritant that some iPhone users in major cities have already experienced. Now, AT&T is proposing what it says is the fastest way to boost the capacity of its wireless network: buying T-Mobile. The $39-billion purchase would eliminate one of the four largest U.S. mobile phone networks and leave just two companies — AT&T and Verizon Wireless — in control of more than 70% of the market. That's reason enough for regulators to take a skeptical view of the deal. Yet AT&T's technical arguments raise the possibility that the acquisition could do more for the burgeoning ranks of smartphone users than the companies are likely to do separately.

Bandwidth | AT&T and T-Mobile: The quest for bandwidth drives a deal - Los Angeles Times
 
If say GM and Ford merged, I'd see your point. But the problem lies in that there is plenty of competition in the cellular market. There are literally over 180 cellular providers in the US - source, so the angle the DOJ is taking in that it would create a monopoly simply doesn't fly in the face of the facts.

AT&T is overpriced and they pretty much do suck. I know someone who works in one of their call centers, so I have knowledge of how they run. I'm currently a T-Mobile customer and I could care less either way to be honest.

As for the 5,000 new jobs promise, I'm a little skeptical as well. There will be layoffs with a merger and how long would these 5,000 jobs remain in place? It is a shot at Obama and his administration and it will be used as campaign fodder for whoever his opponent ends up being. From my perspective, it looks more like the administration is siding with Verizon here more than anything. While both AT&T and Verizon have union employees, the Verizon employees have been on strike. I'm skeptical of the DOJ's angle here in addition to the promise to bring back 5,000 new jobs by AT&T.

What would the market share of ATT/T Mobile after the merger? Anticompetitiveness boards generally see problems when the market share of anyone company gets above 50%. Of course there could be specific localities with less or higher levels of market share that might present an issue. Another factor to consider, most of the smaller cell companies rely on the infrustructure of the majors (including cell towers) to operate. Given the market power and lobbying power of a larger ATT, it could fight to change the regulations seeking to increase the fee chargerd to them
 
I agree with the decision. The market is not best served by two massive telecom corporations.

And on a more anecdotal note, I have found that being an AT&T customer sucks. I can't express sadness that the company might not be allowed to further metastasize.

This is ignorance on display. There are a lot more than 2 massive telecoms in the US. The wireless market is filled with AT&T competitors. If they suck that bad they wont grow as cell customers are more demanding than land line customers and a lot more likely to switch companies with less hassle on the customer end. As for the 5000 jobs, without the customer growth from the merger they have no economic reason to add them. They wont do it simply out of charity, they have to have an economic reason to do so.

The market should decide, not the government---unless and until a monopoly seems to exist and in this case? That dog won't hunt.
 
What would the market share of ATT/T Mobile after the merger? Anticompetitiveness boards generally see problems when the market share of anyone company gets above 50%. Of course there could be specific localities with less or higher levels of market share that might present an issue. Another factor to consider, most of the smaller cell companies rely on the infrustructure of the majors (including cell towers) to operate. Given the market power and lobbying power of a larger ATT, it could fight to change the regulations seeking to increase the fee chargerd to them

I don't think it is so much about market share per say as it is about cornering the available RF spectrum.
 
This is ignorance on display. There are a lot more than 2 massive telecoms in the US. The wireless market is filled with AT&T competitors. If they suck that bad they wont grow as cell customers are more demanding than land line customers and a lot more likely to switch companies with less hassle on the customer end. As for the 5000 jobs, without the customer growth from the merger they have no economic reason to add them. They wont do it simply out of charity, they have to have an economic reason to do so.

The market should decide, not the government---unless and until a monopoly seems to exist and in this case? That dog won't hunt.

As a practical matter there are not many choices in most locations. I live in a pretty big metropolitan area I basically have a choice between AT&T, T-Mobil, and Verizon. That's it. I don't think it will lower prices are create jobs to eliminate 1/3 of the competition.
 
As a practical matter there are not many choices in most locations. I live in a pretty big metropolitan area I basically have a choice between AT&T, T-Mobil, and Verizon. That's it. I don't think it will lower prices are create jobs to eliminate 1/3 of the competition.

Sprint, TracPhone (NET10 and Smart Talk), Jitterbug, US Cellular, Virgin Mobile or Boost Mobile are not available in your area?
 
-chuckles- I agree the DoJ should stay out of “legal” business, they should just stay in the illegal gun running business. At least there they can tell the truth, nobody knew what was going on .
 
Sprint, TracPhone (NET10 and Smart Talk), Jitterbug, US Cellular, Virgin Mobile or Boost Mobile are not available in your area?

Not that I know of. I suppose it's possible but I haven't seen any ads or stores for those companies. OTOH, there's an AT&T store right next to a T-Mobil store in my neighborhood. Think one of those would be closing its doors if the merger goes through?
 
Don't all the other 'telecoms' basically buy their bandwidth from the handful of largest?
 
If say GM and Ford merged, I'd see your point. But the problem lies in that there is plenty of competition in the cellular market. There are literally over 180 cellular providers in the US - source, so the angle the DOJ is taking in that it would create a monopoly simply doesn't fly in the face of the facts.

Actually it does fly on the facts. ATT&T, Verizon, Sprint and T-Mobile are 90% mobile service providers, as in they cover most of the US. Those 176 others you state, cover local areas only and are not as national as ATT&T, Verizon, Sprint and T-Mobile.

If ATT&T gobbled up T-Mobile, then the competition in the market would be much less, as ATT&T suddenly would sit on a 40+ (almost 50%) market share. This would have an impact on prices.. you already pay far far more than Europeans for your mobile phone service and it would not mean that the now 3 big mobile providers will invest in infrastructure to expand the system, which is much much needed.

AT&T is overpriced and they pretty much do suck.

Lack of competition does that as well as lack of regulation and legislation to encourage more competition. But despite the "over pricing" and sucky service, they still are one of the largest and T-Mobile is loosing customers hand over fist. The whole mobile service provider system could use a good shake.... like splitting up Verizon and ATT&T to create more competition.
 
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The whole mobile service provider system could use a good shake.... like splitting up Verizon and ATT&T to create more competition.

Are you talking about government intervention?
Got a legal reason for such?
 
I don't care about the 5k jobs, but the health of the market. The less corporate control the better. Few mergers ever result in better consumer prices or innovations, but more market stagnation - and the telecom sector is relatively inflexible. People needs phones and communications, so demand is less responsive to price changes.
 
Are you talking about government intervention?
Got a legal reason for such?

Why do I need a legal reason to create more competition in the market? Thought you were a conservative and believed in the idea of competition.. guess not.
 
Why do I need a legal reason to create more competition in the market? Thought you were a conservative and believed in the idea of competition.. guess not.

The government has proven over and over and over (in fact nearly every time they try) again that government can't create competition through regulation and legislation. Most conservatives do believe in competition. If the liberals do, then why do they oppose de-regulating the health care industry to allow insurance companies to sell across state lines, thus bringing down the price of health care, among other things?
 
So, I am stealing this graph from SB in the other thread.web-at&t22[1].jpg
 
The government has proven over and over and over (in fact nearly every time they try) again that government can't create competition through regulation and legislation. Most conservatives do believe in competition. If the liberals do, then why do they oppose de-regulating the health care industry to allow insurance companies to sell across state lines, thus bringing down the price of health care, among other things?
\]

Is not health insurance a state regulatory area and not a federal one? Secondly can not health insurance companies set up subsidiaries in different states in order to sell health insurance in multiple states. Thirdly are there not multiple health insurance providers in nearly all states providing competition

The government in this case is not creating competition but maintaining competition, T Moblie if bought by ATT would no longer be in competition with ATT, as such the current state of competition is being maintained
 
Why do I need a legal reason to create more competition in the market? Thought you were a conservative and believed in the idea of competition.. guess not.

You need a legal reason to break up a company?
Unless they engage in collusion, price fixing etc, illegal activity; government cant just stick its nose into a company.

If they suck, they will get competition. Government shouldnt force market actions, the market will do that by itself.
Im not against competition, I dont think its the government's place to dictate company and market actions.
 
The government has proven over and over and over (in fact nearly every time they try) again that government can't create competition through regulation and legislation. Most conservatives do believe in competition. If the liberals do, then why do they oppose de-regulating the health care industry to allow insurance companies to sell across state lines, thus bringing down the price of health care, among other things?

You need to put in "the AMERICAN government" has proven... because in Europe we have our lower prices and better/faster internet because of government regulation that forces through more competition in a market. I fully understand your sceptism of "government", but it is not rational... government is not the problem.. your politicians and your political system is. Government is nothing but the administrative arm of your elected politicians who are in the pockets of big business and do not represent the people.

Like it or not, the "market" is very bad in creating competition once the big players get a certain size. Collusion, cartels and what not, all move to raise the price of entry into said market all in the while the "big players" either set prices instead of market forces. There is no reason the big players to become competitive if there is very little possibility for external potential competitors to get access to the market.
 
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