US Justice Department files lawsuit against at&t

[linuxman94]

Hot off the presses:

A civil antitrust lawsuit has been filed against at&t to block their planned merger with tmobile.

To me this is great news. At&t is a terrible wireless carier and aquiring tmobile would only lower their market share.

In response to the announcement, sprint's stock jumped 6.5% in afternoon trading.

[Quadunit404]

(inb4 locked due to politics)

It always makes me glad to hear things like this.

[linuxman94]

(inb4 locked due to politics)

It always makes me glad to hear things like this.

I don't think this is technically considered politics.

[christoph411]

I don't think this is technically considered politics.

I've seen them be really strict before, like "link contains politics, closed!" :KS

[walt.smith1960]

I was glad to see this as well. When this merger/acquisition was announced I was reminded of an assertion by merging oil companies in the late 1990s/early 2000s that fewer larger companies would lead to more competition and lower prices. Riiiiggghhtt.

[wojox]

To me this is great news. At&t is a terrible wireless carier and aquiring tmobile would only lower their market share.

AT&T runs great for me. :p

[Quadunit404]

I was glad to see this as well. When this merger/acquisition was announced I was reminded of an assertion by merging oil companies in the late 1990s/early 2000s that fewer larger companies would lead to more competition and lower prices. Riiiiggghhtt.

The TWA - American Airlines merger back in 2001 comes into mind.

[walt.smith1960]

The TWA - American Airlines merger back in 2001 comes into mind.
TWA was about on life support by then I believe. But yeah, I know what you're saying. The Continental/United deal does not help the consumer either, and both carriers in that case are relatively healthy.

[KUU]

:P Here in Europe we have laws that protect against mergers that sign bad news for the consumer, hell we invented these laws, just waiting for the rest of the world to catch up.

[shobon]

At&t is a terrible wireless carier and aquiring tmobile would only lower their market share.

Explain how AT&T merging with Tmobile would lower the market share? This makes no sense.

[dniMretsaM]

This is awesome! AT&T lied about the merger being the only way to spread their 4G network. In my opinion, they deserved to be denied just because of that. There are other reasons the merger shouldn't happen, but that's a long story.

[PhilGil]

I'm cautiously optimistic about this. I've been a T-Mobile customer since Voicestream Wireless days, and have always been pleased with their good pricing and excellent customer service. T-Mobile also tended to have less nickel-and dime BS than the other US network carriers. Less competition rarely benefits consumers.

[Quadunit404]

TWA was about on life support by then I believe. But yeah, I know what you're saying. The Continental/United deal does not help the consumer either, and both carriers in that case are relatively healthy.

Agreed. tbh the Southwest/AirTran deal is more likely to benefit the consumer as it means more cities that neither Southwest nor AirTran could have gotten into alone and AirTran has needed to merge for several years as I've heard on airliners.net. That's for a different conversation, though.

[chegarty]

The claims that AT&T and Deutsche Telekom have made about the positive effects of this merger are vile in their untruthfulness. AT&T claims that 5,000 jobs will be added (!) as a result of this merger, but this cannot be true because when a corporation acquires another, they must consolidate to some extent, assuming they are in the same industry. If there is a net gain in the number of employees of AT&Tmobile compared to when they were separate, I'll eat my hat.

AT&T also claimed that they have to buy T-Mobile because there is a "spectrum crisis". This is silly. If AT&T wants to buy spectrum, the government has plenty. In addition, this "spectrum crisis" apparently did not exist when they were planning their 4G* (HSPA+ and LTE) networks prior to they intended to buy T-Mobile.

Of course, AT&T also claims that the wireless marketplace is competitive enough already, which is a nice sentiment but also patently untrue. In the US, there are four "major" wireless carriers, of which AT&T and Verizon are by far the largest. The wireless market is already teetering close to being unacceptably concentrated without this acquisition.

That being said, they are a profit-maximizing company (just like any other, I suppose) and they are trying to maximize profits by capturing what economists like to call monopoly rents. They really can't be blamed too much for trying, but that doesn't mean that they should be allowed to capture these monopoly rents. The public needs to remember this: The greater the degree of concentration in an industry, the further away things get from equilibrium. Prices rise, output falls, and the monopolist eats up consumer surplus.

I'm sorry if I seem too overtly political, but this really isn't a political issue at all. This is an issue of simple economics. Although I'm sure I'm preaching to the choir; Linux users often get into Linux because they've been left discontented by the actions of monopolists. :P

Cheers!

*Not really "4G", but that's another discussion.

[linuxman94]

Explain how AT&T merging with Tmobile would lower the market share? This makes no sense.

Well, most people at T-Mobile would abandon ship because AT&T would probably get rid of their unlimited* plans. I foresee sprint gaining major market share if this merger happens.

*There plans aren't really unlimited, sprint is the only carrier with true unlimited plans.

[radkins2]

At&t is the devil. Hope they burn. indiana recording school (http://azmythmusictech.com)