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In December 2011, AT&T dropped its bid to acquire T-Mobile. This was following both the Department of Justice and the Federal Communications Commission taking steps to block the proposed takeover.
In March 2011, AT&T made known its intention to acquire T-Mobile USA for $39 billion. The announcement drew immediate scrutiny. According to analysts, "The combined companies would have 43% market share overall, and 44% of the postpaid market." Were the two companies allowed to merge, only three companies would dominate the U.S. wireless market, a market that the Federal Communications Commission (FCC) has already found be growing increasingly less competitive.
Public Knowledge's Position
A merger of this scale is simply unthinkable. We know the result of arrangements like this: higher prices and fewer choices, less innovation, and the loss of American jobs.
The market is hardly competitive as it is. T-Mobile, even as the "smallest" of the four major wireless companies, is still bigger than all of the other small, rural, and independent wireless companies (like MetroPCS and Clearwire) combined.
There is a reason why antitrust laws exist and are enforced—and under any rubric, this merger fails the antitrust test.
Public Knowledge will continue to stand up for consumer choice in the wireless market by opposing this merger and by urging the FCC, the Department of Justice, and the White House to do the same.
Update: On August 31, 2011, the Department of Justice sued to block the merger.
Update: On November 22, 2011, Chairman Genachowski announced that the FCC would hold a hearing to scrutinize AT&T's public interest claims. On November 29, 2011, the FCC released a staff report detailing why the harms of the merger outweigh the benefits, despite allowing AT&T to withdraw its application.
Gigi Sohn, president of PK, on why this is bad for consumers...
...and refuting AT&T's arguments.
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For more information
- Check out the results of a poll on the proposed merger, in which 81% of respondents are either somewhat or very concerned by the merger.
- Read the letter that Senate Antitrust Subcommittee Chairman Herb Kohl (D-Wis.) sent to the DoJ and FCC detailing how the proposed merger would harm competition and consumers.
- Read our Petition to Deny, filed jointly by Public Knowledge and the Future of Music Coalition. Also read our Reply Comments.
- Read or watch PK President Gigi Sohn's Senate testimony in opposition to the merger.
- Read PK President Gigi Sohn's written testimony in opposition to the merger.
- Head to notakeover.org for great infographics and fact-checking about AT&T
- Read this letter from AT&T to the California Public Utilities Commission opposing the participation of expert academics in a hearing.
- Check out our fact sheet on the merger.
- Check out Free Press's fact sheet on the merger.
- Take a look at the WSJ's infographic on consolidation in the telecom industry.
- Read this analysis by Ars Technica on why "the results of the merger don't look pretty".