AT&T merger leak: it's all about raising prices and reducing competition

An AT&T legal staffer inadvertently (and briefly) posted a damning internal document to the FCC's docket for the pending AT&T/T-Mobile merger. The document makes it clear that "AT&T is giving Deutsche Telekom $39 billion primarily to reduce market competition" and that the company's claims of bigger network buildouts and increased employment are utterly fictional.

Again, the reality appears to be that AT&T is giving Deutsche Telekom $39 billion primarily to reduce market competition. That price tag eliminates T-Mobile entirely -- and makes Sprint (and by proxy new LTE partner LightSquared and current partner Clearwire) more susceptible to failure in the face of 80% AT&T/Verizon market domination. How much do you think wireless broadband market dominance is worth to AT&T over the next decade? After all, AT&T will be first to tell you there's a wireless data "tsunami" coming, with AT&T and Verizon on the shore eagerly billing users up to $10 per gigabyte.

Regardless of the motivation behind rejecting 97% LTE deployment, the letter proves AT&T's claim they need T-Mobile to improve LTE coverage from 80-97% simply isn't true. That's a huge problem for AT&T, since nearly every politician and non-profit that has voiced support for the merger did so based largely on this buildout promise. It's also a problem when it comes to the DOJ review, since proof that AT&T could complete their LTE build for far less than the cost of this deal means the deal doesn't meet the DOJ's standard for merger-specific benefits.

Leaked AT&T Letter Demolishes Case For T-Mobile Merger (via /.)

• [virtual human]

  Not like he leaked anything we didn’t already know, but it’s great to hear it from the horse’s mouth — now we can only hope this is actually used in denying the merger. (Not holding my breath =( … )

  Also, somebody’s looking for a new job on Monday morning.

• [LikesTurtles]

  It’s really hard not to be cynical about anything good coming out of this. We live in an age where corporations are our gods.  The larger they are, the more worthy they are belived to be of worship. It wouldn’t surprise me if AT&T came out and said “so what” while apologists lined up to tell us that allowing these companies to do whatever they want is the ultimate in liberty and freedom.

• [Bubba73]

  Shouldn’t that be ‘ex-AT&T legal staffer’?

• [voiceinthedistance]

  In other breaking news:

  The Easter Bunny is a hoax!

  Wake up sheeple.

  • [Nonentity]

    Many of the “sheeple” have already been awake.  Unfortunately, it’s rather difficult to argue effectively against the “bu-bu-but government regulation is *bad*” crowd.

    Having an argument for government regulation coming (inadvertently) straight from the AT&T’s mouth, however, is breaking news.

• [AwesomeRobot]

  Great lawyer, or greatest lawyer? 

• [i_i]

  And they say big corporations works for our farewell.

• [paulj]

  As that video shows, corporations are people too! You don’t want to make those cute girls sad by not letting them be BFFs, do you?

  • [i_i]

    That is just evil.

• [Eddie Perkins]

  I’m with T-Mobile currently. If this merger does go though I’ll be switching to Sprint on principle alone, higher rates or not. 

• [Tiberiu Covaci]

  It looks to me that T-Mobile is cashing out! They abandon a sinking ship.

  • [Terrin Bell]

    Cashing out certainly, but a sinking ship no. Once the iPhone officially comes to T-Mobile (and hopefully Sprint) the ship will be sailing fine. 

    T-Mobile and Sprint’s problem is Verizon and AT&T have all the top selling phones. 

• [The Turtle]

  I’ve been on TM for seven or eight years after firing the “old” lying-sack-of-shit AT&T, so the idea I’d be getting the NEW lying-sack-of-shit AT&T back wasn’t appealing.

  Oh, by the way, guys, your Tweet link on the front page for this article is effed up.  You need to escape the ampersand in “AT&T” in the URL.

• [ft]

  Hey assuming I understand this correctly, when a company lies (?) in its merger applications and various filings, and then a new document comes along that shows that their previous assertions are false…

  …shouldn’t there be consequences?

  • [Bruce M Campbell]

    Consequences like the ones I think you allude to only apply to individual people, not corporate people. Think of what damage would be done to the collective egos of everyone involved by slapping the wrist of a giant corporation that knows best what a free market monopoly looks like. Too big to give a shit about lying, market-fixing & anti-competitive behaviour? Say, weren’t the RICO laws created to deal with things like this?

• [ScytheNoire]

  Of course it’s all about less competition and charging higher prices. That’s what it has always been about. They are just trying to do the same thing as what Canada has to suffer through, shitty service with very few provider choices (only two networks, three providers), and are extremely over-priced. Same thing for all telecom services, only the people suffer from this lack of choices and competition. It should be illegal.

• [blissfulight]

  The politicians and non-profits supported the merger because they were paid to do so, not because they had any reasonable justification for supporting a merger that will ultimately lead to higher prices, fewer jobs, and less competition.  (And of course, the same bad service that they’ve always had, for years.)  If this goes through, why not just merge AT&T and Verizon and call it Ma & Pa Bell?  Wake me when I can make a call without dropping it and send/receive data with the 5-9′s that they used to use as the standard for communication 

• [blissfulight]

  Next, AT&T will say if the merger doesn’t go through, they’ll be forced to raise prices because they have to pay T-Mobile $6 billion if it doesn’t go through.  Huh.  I don’t know about you, but I’ll take the $6 billion over the $39 billion, let T-Mobile stand alone (or sell itself to Sprint), and AT&T can spend the remainder they would have spent on the T-Mobile acquisition to build out its network.  Instead of having no improvement for $39 billion, they can have considerable improvement in their network (and some limited justification for jacking up their prices).  

• [Paul Ihrig]

  site is messed up
  AT&T/

• [BookGuy]

  I like the interaction between the two young ladies in these spots.  I hope they use them in the real commercials once the merger goes through.

• [Palomino]

  Some one correct me please: Didn’t  AT&T  lose an anti-trust lawsuit in the U.S.A. and then, as SBC, repurchase a company named AT&T Corp and later renamed itself AT&T Inc? And no one is surprised at their current shenanigans?

  • [Telegram Sam]

    That was after SBC, formerly Southwestern Bell, acquired Pacific Telesis and Ameritech, and before the acquisition of BellSouth — whereupon AT&T had reabsorbed four of the seven Regional Bell Operating Companies into which it had been split two decades earlier. 

    “We don’t care.  We don’t have to.  We’re The Phone Company.”

• [oggelbe]

  AT&T never changed it just respawned from the corporate cestpool.

• [Mcneri]

  Now we have seen the truth, I sure hope it sets us free. This merger was never necessary, is not necessary and will never be necessary. Now I will see whether the DOJ stands for Department of Justice or Department of Jokers!

• [t3kna2007]

  Is the document available, somewhere?

  I traced back through four layers of “via”, and none of them had a link to the document that I saw.  Maybe I overlooked it.

  (I don’t see how the proposed merger would be good for consumers.)

• [Richard Bergman]

  been with all of the cell phone companies and now they goin to be ATT man who needs a cell phone if the best avail merges with garbage il jus go prepaid and save myself the headache

• [Daemonworks]

  You really think the politicians are going to say no to their corporate masters?

  Could happen, I suppose.

• [Chris Sexton]

  So what will it take to start an independent cell phone (or other) communication network? Some kind of ‘undergound’ or ‘dark’ net?