U.S. Government Files to Block AT&T/T-Mobile Merger

By , Aug 31, 2011

Much like Google’s buyout of Motorola Mobility we told you about a few weeks ago, I don’t think anyone saw the AT&T/T-Mobile deal coming. The nation’s second largest carrier unveiled it’s plans earlier this year to acquire the operator for $39 Billion.

The acquisition would leave only three major wireless companies in the US, angering both customers and other carriers along the way. But with the industry’s long history of buyouts and mergers, I think most folks just accepted that it was going to happen, until now…

Bloomberg just dropped a bombshell, claiming that the US government just filed court papers in Washington to block the proposed merger between AT&T and T-Mobile USA.

“The Justice Department complaint was filed today in federal court in Washington. The U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law and a court oder blocking any arrangement implementing the deal.”

Wow. Whether you were for or against the merger, I’m not sure anyone expected the government to make a move like this. Especially since acquisitions like this happen so frequently in the wireless industry. (Alltel/Verizon anyone?)

So what happens if regulators end up rejecting the transaction? Word on the street is AT&T offered T-Mobile a substantial breakup package if the deal falls through, valued around 7 billion dollars in cash and assets.

While I’m sure this has Sprint CEO Dan Hesse and T-Mobile customers grinning from ear to ear, I’m wondering how pissed AT&T has to be right now. It’ll also be interesting to see how, if at all, this affects T-Mobile getting the iPhone this Fall.

What do you think of the move by the US government? Was it the right one?

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  • ian

    i think obama has t-mobile and didn’t wan an go to at&t so he made the government file a compliant against it.

    • Ken

      cool

    • Dylan

      Obama has an iPhone

  • http://abailey0886@yahoo.com James

    I have tmobile and unlimited data talk asnd text for three lines at 118.00 and i love it no one else has that deal. I have a iphone but i want a tmobile iPhone. So i hope we still get it. Go uncle sam.

    • http://facebook.com/askeric Eric

      I agree with James.

      However, after hearing about the Buy-out, I thought it was done, so I closed my T-Mobile account and switched to AT&T for the iPhone. I figured why wait, if the merger is going to happen anyways!

      Well, S#!T, now the US Gov jumps in – I really could have used that info 5 months ago……..

      But, I love my iPhone 4 and AT&T has been okay. However, if/when T-Mobile gets the iPhone, I’ll jump back. :-D

      – Eric

  • Dane

    This is dumb. In a capitalist country the government needs to completely stay out of the business sector

    • Night

      That is incorrect, without some kind control one company could control the market and do very bad things.
      Imagine the government does not control this kind of things and AT&T next step would be buy all the competition, once it has 100% of the market it can impose the very high prices and you would not have any alternative.

      • ic0edx

        Great point!!! That is so true…

      • Aidan

        Very well said ! It’s called regulation f

      • http://facebook.com/askeric Eric

        +1

        It is all about getting a healthy “balance” so it is “fair” for both us, the consumers, and them “the businesses”. :-)

      • Li

        The true is american is not pure capitalism its called mix something lol I forgot the word but still trust will destroy all other company… Hacker ftw!! Off topic XD!!

  • karl

    Love it! I have great service with ATT & pay a very high price! But ATT buys tmobile we will pay a high price! ATT should buy sprint & put them out of their mesery…

  • josh

    From my knowledge oboma has a secured blackbbery but i dont know what carrier he is on

  • http://MobileTechSpot.Blogspot.com MobileTechSpot

    This is getting extremely interesting. For a while it appeared that AT&T had this merger in the bag. They have been extremely carefree as of late, removing text messaging plan options and imposing fees for not making ‘enough’ long distance calls monthly.

    Brazenly doing these things while in the waiting process of this acquisition led me to believe that AT&T believed they would get the approval no matter what. But with this news dropping, its starting to appear that perhaps it won’t happen. And that doesn’t bother me at all. I personally enjoy having 4 major carriers. More choice and more competition benefits the consumers.

    -http://mobiletechspot.blogspot.com

  • Ners2b

    Yah, if AT&T buys out all major carriers, they will have all controls of pricing no matter what phone u have. So, d only choice wer going to have is to get watever is out there (MetroPCS, Cricket, Boost, etc). And, it’s a no brainer, Obama did not decide this, it’s the people who petitioned it. Obama will just have to sign it with a big smile once this is passed!

    • TT

      Monopolies are illegal. AT&T merging with T-Mobile does not make AT&T a monopoly. Not even close to one.

      As pointed out, Sprint and Verizon are still in the picture and aren’t going anywhere. This still makes 3 major competitors. Think about how many products only have two major competitors. Pepsi and Coke. DirectTV and Dish Network. Sony, Mircosoft, and Nintendo all share one market in video games. The Government filing a motion to stop this makes no sense to me at all.

      • Li

        It will be the only gsm carrier in USA sti not monopoly???

  • MALdito

    I may be wrong here, but wasn’t AT&T forced to disband its telecommunications companies (about 25+ yrs ago) because it was in violation of antitrust laws (United States v. AT&T) (http://en.wikipedia.org/wiki/United_States_v._AT%26T )? It seems as thought its gonna happening again only this time with cell phone companies. My memory is not all that great (since I was like 1 or 2 yr/old), but I’m pretty sure that the earth was destroyed as a result… just kidding, lol. But seriously, Here we go again :-\ .