Feature Article

Free eNews Subscription>>
December 13, 2011

With AT&T/T-Mobile Deal in Jeopardy, Rivals Put Antitrust Lawsuits on Hold

In a widely expected move, AT&T and two competing carriers have agreed to put their antitrust trials on hold while AT&T reevaluates its $39 billion proposed acquisition of Deutsche Telekom-owned T-Mobile. The motions filed Tuesday by AT&T and rivals Sprint and C Spire were quickly approved by District Judge Ellen Segal Huvelle.

The move comes just one day after Huvelle granted the mutual request of AT&T and the Justice Department to delay their own looming antitrust lawsuit, originally scheduled for Feb. 13, hinting that the AT&T/T-Mobile merger in its current form may be dead.

AT&T said in a statement yesterday that it is “actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals.”

The general consensus is that two basic options remain, neither of which involves moving forward with antitrust trial (even though AT&T will tell you otherwise). The opposition from the Justice Department, the FCC, consumer interests groups and rivals is simply too strong to assume the merger will ever come to fruition.

The first option reportedly being discussed involves a joint venture of sorts, where both carriers would have access to one another's infrastructure and network assets. The “Plan B” option, first reported by the Wall Street Journal, could conceivably provide AT&T with the wireless spectrum that it requires without the need for an official merger.

Sources close to the situation called this plan a “back burner” option earlier in the month, but that was before AT&T asked out of the antitrust trial that it claimed to be looking forward to.

The second plausible conclusion is that AT&T bows out and is simply looking for a way to arrange a deal with Deutsche Telekom where it wouldn't owe the full $4 billion in fees that it earlier agreed to pay the German company if the agreement were to fall apart.

Albert Foer, president of the American Antitrust Institute, adds another interesting observation: AT&T is actually benefiting from all this chaos. He points out to Bloomberg that the competition, namely Sprint and T-Mobile, can't move forward until the case is concluded.

“Surely DOJ and the judge understand that the longer this plays out, the more it is actually to AT&T’s benefit, because delay can only weaken two of its competitors, T-Mobile (which is immobilized) and Sprint (which is limping),” he told Bloomberg.

Who knows, maybe the third option for AT&T is to delay the proceedings for as long as they can and continue to reap the benefits. Stay tuned.



Beecher Tuttle is a MobilityTechzone contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell



FOLLOW MobilityTechzone

Subscribe to MobilityTechzone eNews

MobilityTechzone eNews delivers the latest news impacting technology in the Wireless industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter