U.S. files to block AT&T purchase of T-Mobile: source
On Wednesday August 31, 2011, 10:51 am
WASHINGTON (Reuters) - The Obama administration on Wednesday filed to block AT&T's (NYSE:T - News) proposed acquisition of wireless rival T-Mobile USA (XETRA
TEGN.DE - News) because of anticompetitive concerns, two sources familiar with the matter said.
A Justice Department spokeswoman declined to comment as did a spokesman for AT&T.
Blocking the combination on antitrust grounds would be a big blow to the telecommunication giant's expansion plans.
(Reporting by Jeremy Pelofsky. Editing by Robert MacMillan)
http://finance.yahoo.com/news/US-fi...5.html?x=0&sec=topStories&pos=1&asset=&ccode=
Additional News Article:
U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger
By Tom Schoenberg - Aug 31, 2011 11:06 AM ET
U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Deal
Aug. 31 (Bloomberg) -- The U.S. government sued to block AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would "substantially lessen competition" in the wireless market. The Justice Department complaint was filed today in federal court in Washington. Peter Cook reports on Bloomberg Television's "InBusiness with Margaret Brennan." (Source: Bloomberg)
The U.S. government sued to block AT&T Inc. (T)’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market. AT&T shares fell as much as 5 percent.
In the complaint 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. The U.S. also asked for a court order blocking any arrangement implementing the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month.
Philipp Schindera, a spokesman at Bonn-based Deutsche Telekom, declined to immediately comment on the filing. Jessica Smith, a Justice Department spokeswoman, declined to comment on the suit. Michael Balmoris, an AT&T spokesman, didn’t immediately respond to an e-mail and phone calls seeking comment.
Shares Drop
AT&T fell $1.02, or 3.4 percent, to $28.60 at 10:55 a.m. in New York Stock Exchange composite trading after declining as much as $1.49. Deutsche Telekom American depositary receipts dropped as much as 6.4 percent, to $12.93.
The purchase of Bellevue, Washington-based T-Mobile would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would have dwarfed current No. 3 carrier Sprint Nextel Corp., which argued against the deal. Overland Park, Kansas-based Sprint’s shares jumped as much as 9.9 percent.
Some U.S. lawmakers have said the deal may reduce competition and raise consumer costs. The Federal Communications Commission has given itself more time to study new data presented by AT&T.
Economic Models
AT&T in a July 25 filing at the FCC submitted new economic models that it said showed the merger would lower prices and increase service in large metropolitan markets. The models offer “further detailed support” for arguments that the merger will lessen strains on the company’s wireless network, lower costs and increase quality, AT&T said in the filing.
“Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,” said Andrew Gavil, a law professor at Howard University in Washington. “The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point.”
The case is U.S. v. AT&T Inc., 11-01560, U.S. District Court for the District of Columbia (Washington).
To contact the reporter on this story: Tom Schoenberg in Washington at [email protected]
To contact the editor responsible for this story: Michael Hytha at [email protected]
http://www.bloomberg.com/news/2011-...t-to-block-proposed-at-t-t-mobile-merger.html
Personally, I think this is the right move, as the merger would have made the cell phone market a duopoly, no matter how hard Sprint tries to compete against Verizon and AT&T. Plus, no matter what a person may think otherwise, less competition in the market means less competitive pricing which means customers pay more for the same or less service. Let the debate commence.
On Wednesday August 31, 2011, 10:51 am
WASHINGTON (Reuters) - The Obama administration on Wednesday filed to block AT&T's (NYSE:T - News) proposed acquisition of wireless rival T-Mobile USA (XETRA
TEGN.DE - News) because of anticompetitive concerns, two sources familiar with the matter said.A Justice Department spokeswoman declined to comment as did a spokesman for AT&T.
Blocking the combination on antitrust grounds would be a big blow to the telecommunication giant's expansion plans.
(Reporting by Jeremy Pelofsky. Editing by Robert MacMillan)
http://finance.yahoo.com/news/US-fi...5.html?x=0&sec=topStories&pos=1&asset=&ccode=
Additional News Article:
U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger
By Tom Schoenberg - Aug 31, 2011 11:06 AM ET
U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Deal
Aug. 31 (Bloomberg) -- The U.S. government sued to block AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would "substantially lessen competition" in the wireless market. The Justice Department complaint was filed today in federal court in Washington. Peter Cook reports on Bloomberg Television's "InBusiness with Margaret Brennan." (Source: Bloomberg)
The U.S. government sued to block AT&T Inc. (T)’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market. AT&T shares fell as much as 5 percent.
In the complaint 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. The U.S. also asked for a court order blocking any arrangement implementing the deal.
“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.
Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month.
Philipp Schindera, a spokesman at Bonn-based Deutsche Telekom, declined to immediately comment on the filing. Jessica Smith, a Justice Department spokeswoman, declined to comment on the suit. Michael Balmoris, an AT&T spokesman, didn’t immediately respond to an e-mail and phone calls seeking comment.
Shares Drop
AT&T fell $1.02, or 3.4 percent, to $28.60 at 10:55 a.m. in New York Stock Exchange composite trading after declining as much as $1.49. Deutsche Telekom American depositary receipts dropped as much as 6.4 percent, to $12.93.
The purchase of Bellevue, Washington-based T-Mobile would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would have dwarfed current No. 3 carrier Sprint Nextel Corp., which argued against the deal. Overland Park, Kansas-based Sprint’s shares jumped as much as 9.9 percent.
Some U.S. lawmakers have said the deal may reduce competition and raise consumer costs. The Federal Communications Commission has given itself more time to study new data presented by AT&T.
Economic Models
AT&T in a July 25 filing at the FCC submitted new economic models that it said showed the merger would lower prices and increase service in large metropolitan markets. The models offer “further detailed support” for arguments that the merger will lessen strains on the company’s wireless network, lower costs and increase quality, AT&T said in the filing.
“Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,” said Andrew Gavil, a law professor at Howard University in Washington. “The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point.”
The case is U.S. v. AT&T Inc., 11-01560, U.S. District Court for the District of Columbia (Washington).
To contact the reporter on this story: Tom Schoenberg in Washington at [email protected]
To contact the editor responsible for this story: Michael Hytha at [email protected]
http://www.bloomberg.com/news/2011-...t-to-block-proposed-at-t-t-mobile-merger.html
Personally, I think this is the right move, as the merger would have made the cell phone market a duopoly, no matter how hard Sprint tries to compete against Verizon and AT&T. Plus, no matter what a person may think otherwise, less competition in the market means less competitive pricing which means customers pay more for the same or less service. Let the debate commence.
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