Lawyer 2 Lawyer

Feds Antitrust Challenge to AT&T Merger with T-Mobile

 

The U.S. Department of Justice is suing to block AT&T’s takeover of T-Mobile USA. After reviewing the details of the 39-billion-dollar deal, the DOJ said this acquisition would not be good for consumers.  AT&T disagrees. On Lawyer2Lawyer, attorneys and co-hosts Bob Ambrogi and J. Craig Williams welcome Maurice E. Stucke, from the University of Tennessee College of Law, Attorney Allen Grunes from the firm, Brownstein Hyatt Farber Schreck and Evan Koblentz, a reporter for Law Technology News, to discuss the suit and the impact on the mobile technology world and consumers.

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  • Paul L. Quandt

    I have been with both AT&T and am now with T-Mobile. If AT&T takes over T-Mobile, I will leave it.

    Paul

  • Richard

    I’m not a lawyer, but I really enjoyed your discussion.

    I’m curious about the innovation part of the discussion near the end. Given that none of the wireless companies make their own phones, couldn’t they be considered commodity distribution companies?

    It seems to me that both Apple and Google are much more likely to be monopolistic. Personally, I think that in the next few years, the end user won’t care which wireless provider they have, but that they have X phone. And, as seen in some of Apple’s patents, the phone won’t care what provider it is working on.

    Thanks for the talk!

  • John DeVita

    Im glad they are blocking this, the last thing this free market capitalist wants is more, crony capitalism and another to big too fail entity.

  • Sam

    Good discussion, thanks. I listened hoping you would also bring in a technology expert given T-Mobile’s market disadvantage as relates to high spectrum. High spectrum signal is very wavy; hence it covers well but doesn’t go as far; therefore T-Mobile must build more antenna sites to cover a given area than its low spectrum competitors whose signal coverage provides superior physical/cost efficiency.

    Given that AT&T and T-Mobile networks employ the same protocol, the merger is hand in glove: At&T will use T-Mobile’s high spectrum network capacity for data and text coverage, thus freeing low spectrum network capacity for voice coverage. The merger’s merit is its spectrum collaboration, a cost-efficient solution to wavelength inefficiency.

    One wonders then if the DOJ’s focus on price isn’t short-sighted given explosive demand for all things wireless. Add to that Apple’s likelihood of offering the iPhone to all providers (i.e. the end of AT&T’s Apple-proprietary advantage now only shared with one other). Given this, one might wonder that Sprint’s real concern here isn’t AT&T post-merger price increases, but decreases.

    Two years ago AT&T was the butt of dropped call jokes. From my limited understanding of the matter, the driver behind this merger isn’t price, but network capacity. AT&T has found a creative way to instantly expand its capacity (versus the time and expense to add new antenna builds one by one), and, BONUS, T-Mobile is being spared an inglorious end in being gradually outpaced by its competitors whose network expansions are more capital efficient (at least on dollar for dollar terms relative to this issue of spectrum wavelength). T-Mobile’s future without this merger is, well, let’s not go there. Surely DOJ understands this; surely.

    I would have liked to hear your panel of lawyers address the legal aspects of not just pricing, but pricing relative to this issue of technology. In my limited knowledge of this issue, as yet I do not understand how on one hand the U.S. government can license high spectrum, but on the other justify preventing a high spectrum licensee from taking creative measures to counter disadvantages inherent to high spectrum inefficiency.