States Line Up Against AT&T's T-Mobile Acquisition - InformationWeek

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9/18/2011
11:10 PM
Ed Hansberry
Ed Hansberry
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States Line Up Against AT&T's T-Mobile Acquisition

Seven attorneys general join Justice Department in opposing the acquisition.

Opposition to the proposed purchase of T-Mobile by AT&T got a bit larger on Friday as the attorneys general of seven states voiced their support for the suit filed by the Department of Justice. The seven states are New York, California, Pennsylvania, Illinois, Massachusetts, Ohio, and Washington.

AT&T spokesperson Michael Balmoris has told Tech Crunch "it is not unusual for state attorneys general to participate in DOJ merger review proceedings or court filings." Basically the nation's second largest carrier is putting on a brave front in the face of increasing opposition.

The amended complaint will complicate this deal even further, which isn't good for AT&T at all. After the DOJ's filing, experts gave the deal a less than 25% chance of consummating. That number just got worse. Before the states piled on, the negotiations were to be among AT&T, T-Mobile, and the DOJ. Now there are seven additional cast members that have to be dealt with. Several of the states, most notably California, are known for very pro-consumer laws. Since the crux of the complaint is about the deal being worse for consumers, those states will be harder to satisfy than the federal government will be.

Some want the executive branch to step in. Fifteen Democratic members of the U.S. House of Representatives want President Obama to put pressure on the DOJ to settle. FierceWireless said: "The lawmakers said the deal will lead to job creation as the networks are merged and upgraded, and it will also lead to expanded [Long-Term Evolution] access, which will foster more jobs."

It seems they took all of AT&T's arguments in favor of the proposed transaction at face value. Don't think for a second there isn't some 2012 campaigning going on. Anything that promises more jobs will be supported by politicians right now, especially Democrats, who have the most to lose next year.

On Wednesday, AT&T and the DOJ, potentially with seven states in tow, will appear in U.S. district court to discuss issues that could lead to a settlement. Expect AT&T to make huge concessions. If they stick to their guns on this, the case will drag on for months, further increasing the risk of being outright blocked.

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