Sprint's lobbying pays off with new ally: DOJ

Sprint's lobbying pays off with new ally: DOJ

Summary: After doing most of the grunt work against the AT&T/T-Mobile merger by itself, Sprint has finally caught a break thanks to the Department of Justice.

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Since AT&T first announced plans to acquire T-Mobile back in March, Sprint has been at the forefront of the campaign against the merger -- which Sprint actually refers to as a takeover.

Today, Sprint's arduous lobbying efforts might have finally paid off and provided the ally it was looking for  now that the U.S. Department of Justice has moved to block the proposed $39 billion purchase. The DOJ has filed a suit arguing that a merger like this would violate antitrust laws, which is just what Sprint has been arguing all along. All that Sprint might be still grumbling about now is asking why the DOJ took so long to get on board.

For the most part, Sprint has the lone major voice, filing countless arguments with the Federal Communications Commission against AT&T and T-Mobile citing examples on how AT&T could grow without buying up the nation's third largest wireless provider as well as the negative consequences this could have on American consumers.

Much to Sprint's chagrin, a large ring of tech giants such as Facebook, RIM and Microsoft -- all companies that would stand to gain from such a merger -- filed letters in support of AT&T.

Before the DOJ, the only major help that Sprint got publicly was from an angry band of AT&T customers who didn't like what they were seeing and Sen. Herb Kohl (D-Wis.), head of the Senate Judiciary Antitrust Subcommittee.

Vonya B. McCann, Sprint's senior vice president of government affairs, has responded with the following statement, obviously in favor of this latest turn of events:

The DOJ today delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first. Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.

This doesn't mean that because the DOJ is involved that the proposal is off, but it is highly unlikely that it will succeed.

FCC chairman Julius Genachowski also published a statement in response to the DOJ:

By filing suit today, the Department of Justice has concluded that AT&T's acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws. Competition is an essential component of the FCC's statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition.

AT&T still has a chance to appeal and argue that the merger could produce more jobs -- at least at its own company -- if the deal goes through.

Of course, if it did happen, how many jobs would be lost at Sprint and smaller carriers who wouldn't be able to compete with Verizon and a much larger AT&T? Thanks to the DOJ, Sprint probably won't have to worry about that issue now.

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Topics: Telcos, Government, Government US

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5 comments
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  • Sad

    It makes me sad when Oligopolies don't get along. Thanks Sprint for giving me the choice of early termination fee and data caps.
    Your Non Advocate
  • RE: Sprint's lobbying pays off with new ally: DOJ

    I am pleased with this decision as a T-mobile customer. I wasn't looking forward to higher prices and less service. T-mobile isn't the best provider, but being an AT&T customer before that, the in-home roaming charges and subsequent lack of customer service that resulted in still paying taxes on those charges left a bitter taste. Seeing the Apple iPhone monopoly before Verizon got in on the deal should also be further evidence for the DOJ.
    emitretsam
  • How does the govt decide for or against this

    The arguments given here could apply to any merger, so why would the government let any corporation merge?

    And if the government can tell corporations when and how they can merge, then we certainly dont have a capitalistic economic system in the US.
    otaddy
  • RE: Sprint's lobbying pays off with new ally: DOJ

    Im sure that T-mobile isn't the best provider.<a href="http://sazkove-kancelaree.cz">sazkove tipy</a> and all the best to all
    marco5811
  • RE: Sprint's lobbying pays off with new ally: DOJ

    Oh no! If the two boys down the street work merge their lemonade stands, I won't be able to sell as much lemonade so them merging hurts my business, stop them!

    That is exactly the same as what Sprint is crying, and yes, two competitors merging will hurt Sprint. Any two competitors merging will have a negative impact on all other competitors in that market. Does that mean all mergers should be prevented? According to this basic logic, yes. Is it Justice if mergers are stopped because they will have a negative impact on the others in that market? No. No competitor is ever, not once, going to shrug off even the suggested merger of two of their competitors. They will always look for some way to stop, complain about it, or make it look like such a bad thing for the customers of the two merging entities that they leave the merged entity and come to them. Currently Sprint is doing all three of these. Yes, this merger will hurt Sprint, but no more than any of the bad moves they have made in the past decade have. Will this be bad for the customers? I can not say for absolute certain, but I can say that, as someone that worked for AT&T as a CSR while I acquired and merged with several regional carriers, all such mergers and acquisitions resulted in better service, and on at least two occasions, lower prices not only for the new customers, but for existing ones as well. Yes, upon upgrading to AT&T equipment, the new customers were required to give up their old plans and choose AT&T plans, but they were not required to change equipment unless it was an acquisition of different technology, such as the acquisition of the one regional CDMA carrier about three years ago, and those customers were offered special plans to make up for that, as well as being sent free phones and given a lot of leeway in early upgrades (except to iPhone, which CSRs couldn't give early then anyways). Yes, some customers will be divested to competitors, but the remainder will most likely NOT see an increase in price or decrease in service. All talk to the contrary is merely scaremongering, which if I recall the courses I took in school, is a fineable thing, if not illegal.
    Vartra