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As T-Mobile Deal Dies, AT&T CEO Keeps Lying
DC's Lobbying Juggernaut Finally Gets Told 'No'
by Karl Bode 12:35PM Friday Dec 09 2011
Adding yet another wrinkle to AT&T's already troubled T-Mobile takeover bid, the Department of Justice today informed a Judge the agency wanted to postpone the trial. Justice Department lawyer Joseph Wayland is arguing that an expedited trial is no longer necessary because AT&T on Thanksgiving (hoping to minimize the PR hit) pulled their FCC deal application. According to DOJ logic, if there's no merger application, there's no merger to block -- and it would be a waste of court time if AT&T proposed a new plan at the FCC in a few months.

Meanwhile, the Washington Post is running what's essentially an obituary for the deal. The piece notes how AT&T has spent more on campaign contributions than any company since 1990, and as a result hasn't been told "no" by a regulator since the original Ma Bell breakup. But something happened on the way to the T-Mobile deal: AT&T's repeated lies and astroturf efforts were so obnoxious, they managed to rub even factually-challenged Washington DC the wrong way:
The letters from third-party groups raised eyebrows at government agencies and on the Hill, where people began wondering why groups with no obvious ties to broadband were writing in. News reports emerged showing that many of the groups had financial ties to AT&T. Then there were the ads that staff members at the FCC said they couldn’t avoid when they opened a newspaper, fired up their iPads or watched TV — all touting the merger’s ability to put thousands of Americans to work. But who had ever heard of a big company merger creating rather than destroying jobs?
The Post suggests that it was AT&T's hubris and heavy promotion of their false claims that made regulators take a closer look. When they decided to fact check (who are you and what have you done with our merger-loving regulators?), they found arguments that were completely full of holes:
AT&T’s blitzkrieg of ads, which claimed that the promised expansion of broadband would create 100,000 jobs, wasn’t helping either. A deal’s impact on jobs is not typically part of an evaluation by antitrust officials, but this time regulators thought AT&T’s campaign had forced them to take a closer look. They found holes. For one, the company refused to divulge how many jobs it would eliminate in the merger.
The piece rather floats over the fact that most of AT&T's claimed benefits of the T-Mobile deal were thoroughly debunked after an AT&T attorney accidentally publicized AT&T data. AT&T waged one of the largest telecom disinformation efforts we've ever seen, paying groups ranging from cattle ranchers to ballooning associations to write in to the FCC in support of the deal. Jim Cicconi, AT&T's top lobbyist and the man behind most of these sleazy efforts tells the Post "this has been some of the worst couple weeks of my life."

With AT&T's political pull it's hard to believe the deal is dead until it truly dies, and AT&T's doing everything in its power to salvage the acquisition. So far their tactics don't appear to be particularly sophisticated, and consist largely of repetition and denial. As deal approval gets increasingly unlikely, AT&T CEO Randall Stephenson continues to pretend that the deal will lower prices, improve competition, and improve service, something even our pay-to-play government is finding it hard to believe.

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Tuscaloosa, AL

2 recommendations

I'm not so sure it's dead

Yes, the deal to swallow T-Mobile whole may in fact be dead, but there are other ways to accomplish the same thing. This is what AT&T might try to do:

1. Enter into a spectrum-sharing deal with T-Mobile. Essentially, both companies' customers could roam on either network, at least on GSM. 3G is a problem because of incompatible bands, but there's no problem with GSM roaming.

2. Start buying unused spectrum from T-Mobile. Start out in more rural areas so it's less likely anyone will notice and complain.

3. Start buying small T-Mobile markets, especially in areas with a regional competitor, so there won't be as much of a competitive shift by losing a player.

4. Work with DT to harmonize bands. That means T-Mobile's 1700 3G goes away and gets replaced by LTE. At the same time, T-Mobile will start selling phones that work on AT&T's 3G and LTE bands.

5. T-Mobile will raise its prices to at least match AT&T's prices. At the same time, those harmonized phones will s-l-o-w-l-y roll out, but they won't come out fast enough to allow everyone to get one. And the price hike might even come first, just for good measure.

6. Once enough markets have been sold off to AT&T, T-Mobile will be a shell of its former self. And, with its higher prices, fewer and fewer people will want to use it. It'll be a carrier on a downward slide.

7. AT&T will make another offer for a smaller and less viable T-Mobile. Naturally, DT will accept, and it will be pitched to regulators as a way to put the assets of a dying carrier to good use. As for the loss of competition, well, it's obvious that the market couldn't support the existing number of carriers, as evidenced by T-Mobile's troubles. And, with luck, by this time there may be a more friendly administration in office.

The deal might take a bit longer this way, but, in the meantime, T-Mobile's frequencies will have been reconfigured to match AT&T's, which had to be done anyway, and prices will have been raised to match AT&T's, so there will be fewer customers potentially grandfathered on cheaper plans. And, if AT&T and DT really wanted to get rid of those customers, DT could simply shut down T-Mobile right before the new buyout deal is announced. Customers would be allowed to leave without an ETF, which means no grandfathered customers, and it has the added benefit of making T-Mobile look like a dead carrier, which all but assures the deal of going through.

You read it here first, folks.


Glen Head, NY

2 recommendations

Not Exactly AT&T

Meanwhile, the Washington Post is running what's essentially an obituary for the deal. The piece notes how AT&T has spent more on campaign contributions than any company since 1990, and as a result hasn't been told "no" by a regulator since the original Ma Bell breakup.
It should be noted the warmed over dung calling itself "at&t" IS NOT the "Ma Bell" AT&T of years past but rather SBC Communications renamed "at&t". The former "Ma Bell" AT&T was a heavily regulated monopoly that did do some good; Bell Labs and Western Electric are two notable divisions and their contributions to electrical engineering and the physical sciences are well represented. The mere fact that SBC now calls itself "at&t" does not change the fact that it is a lousy corporate citizen and they are finally learning the lesson "payback is a bitch".
I support the right to keep and arm bears.

Holy Cable Modem Batman

Washington, DC

3 recommendations

Should have sent more cupcakes to the FCC...

Should have sent more cupcakes to the FCC...

AT&T lost a lot of goodwill and capital in this town.

Completely tone-deaf campaigning by AT&T to get this merger done... not to mention the billions of dollars that went flying out the window.

What a screwup....
"We're going to start at one end of (Fallujah), and we're not going to stop until we get to the other. If there's anybody left when that happens, we're going to turn around and we're going to go back and finish it."
Lt. Col. Pete Newell: 1st Inf. US Army