AT&T-Mobile
image courtesy ctrlZstudio

The FCC chariman today recommended the $39 billion merger of AT&T and T-Mobile be sent for an official review by an administrative law judge.  Federal Communications Commission Chairman Julius Genachowski suggested this course of action to fellow commissioners, citing that the FCC found the deal "would significantly diminish competition and lead to massive job losses."  Genachowski's order still requires the approval of a majority of the commissioners, and if approved would extend the review of the merger beyond AT&T's hopes to have things all wrapped-up at the FCC early in 2012.  Of course, AT&T is none too happy, stating:

"The FCC’s action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both."

If you'll allow a bit of editorial comment, I'm a happy T-Mobile customer.  I don't want to change anything about my service from T-Mobile, and am concerned that I will lose the legendary customer support T-Mobile offers, as well as gaining an additional $100 or so attached to my monthly bill.  I'm also concerned that Deutsche Telekom, T-Mobile's parent company no longer wants to retain control of the small U.S. carrier because of the huge financial drain that comes with.  I worry what will happen either way -- having AT&T as my carrier is my rock, and having DT let T-Mobile die is my hard place, and I'm smack dab in the middle.  Either case has me getting cell service from AT&T, unless the government has a contingency plan for T-Mobile should the merger fail to pass.  Hopefully, the fellows in Washington have a plan to serve the consumer's best interests, but I'm skeptical.  Unless another company like Google or Apple steps in and buys T-Mobile, our future looks shaky either way.  For now, I, and 33 million others, just have to wait and see.

More: Reuters; BusinessWire

 

Reader comments

FCC chairman asks for judicial review of AT&T T-Mobile merger, AT&T responds

72 Comments

I really hope this deal doesn't go through, AT&T is already a monster, with T-Mobile's subscribers it would reduce the US cell market to a near Duopoly, Sprint can't stand in the way of Verizon and AT&T without another player.

If AT&T buys T-Mobile I could see a purchase of Sprint coming at the hands of Verizon Wireless. Then we can all jump ship and switch to Tracfones.

The problem with this statement is that Tracfone runs its GSM phones on AT&T's network and its CDMA phones on Sprint's network. So either way You'd get serviced by one of the Duopoly companies.

I realize it sucks but one way or another T-Mobile is not going to exist. 39 billion dollars is not chump change for Deutsch Telecom.

You may want to reconsider your duopoly and actually consider it a monopoly by Verizon. The U.S. Government auctioned off 22mHz of 700mHz spectrum that covers the whole U.S. pretty much guaranteeing no competition and they are going to play this competition card? That is 10 x 10 paired channels that is going to crush competition from Coast to Coast. But hey if someone wants to buy out a competitor to compete with that shame on them.

T-Mobile is profitable. DK just wanted to take the proceeds of the sale and invest it elsewhere. If the deal goes through, I doubt they'd shutter T-Mobile as they would lose a lot of money that way.

Are you kidding me? The government does not know its a$$ from a hole in the ground and has no business getting involved when public health or national defense is not at issue. This is called competition, also known as life 101. If T Mobile were profitable this would be a moot point and if they cannot compete, they need to be acquired. This is exactly the kind of nonsense that has this economy DOA with no sign of recovery.

Um. T-Mobile USA is profitable.

Google "T-Mobile USA Adds Customers, Increases Profit" you will find articles published less than two weeks ago.

I think you do not know what you are talking about.

Making a profit and being profitable are not the same. I am confident I know more about business than you, no doubt about it. DT would not be trying to spin this unit off if they were so uhm profitable especially with the way things in Europe are currently. Why don't you check out T-mobile's balance sheet and report back?

Year over year T mobile lost 100k net customers. 33.7 vs 33.8 million 3rd quarter of last year. Their contract business is losing subscribers and has not added net contract subscribers in the last fiscal year. Most of their increase is in the prepaid market. Which do you think is more profitable? They are not growing their top line they are cutting their expenses to make their books looks good, which is not sustainable. This does not even take into account the beating they took in the 4th quarter as the only major 4 carrier without an iphone 4s launch...Yeah, I do know what I am talking about...

Just because a business gets bigger, doesn't translate to a bonus for the consumer. Granted there is no need for a bailout but its a sad day for the consumer when competition is absorbed. The FCC will probably split it off like they did Alltell. Either way tmo subscribers are screwed. As are people on the other three carriers. With less options there is a lack of necessity to compete.

well true but T-mobile is running out of options, profits on the US are not high enough to keep it running for long. T-mobile needs the sale to go through to pay their debt, and without it we don't know how long it will last before bankruptcy.

Um look at your numbers and you may notice a significant customer loss starting around the same time AT&T announced them buying t-mobile. They're not getting new subscribers due to they don't want to go tot-mobile then be converted into AT&T customers.

I don't know what area your from as each region of the country has stronger players.. But here in the Chicago area a lot of T-Mobile customers frantically switched to Verizon our Sprint when the merger announcement was made. Because they either A: wanted nothing to do with the come back of ma bell part 2 or B: they went to T-Mobile to escape AT&Ts crappy customer service and over blown rates. So they're trying to escape AT&T again by going to one of the other carriers.. Sprint, Verizon or U.S. Cellular... If the merger does not go through DT makes some decent money and gets a lot of spectrum from AT&T as is the deal they made cause AT&T was over confident the merger would go through.

So we will see what happens.. If the merger does not go through that announcement would come about the same time the people that jumped ship from T-Mobiles contacts would be up from whatever carrier they went to in fear of AT&T buying T-Mobile.. So it wouldn't shock me if t-mobiles new customer numbers spike at that point. They would get their customers back..a chunk of change from AT&T and a good chunk of spectrum from AT&T.. Might make DT reconsider closing doors.. has anyone even thought maybe DT agreed to the deal because of the bonus they would receive if the merger doesn't go through and they already thought AT&T was being too cocky and t-mobile didn't think the merger would work so they

So they would be in a win win situation.. And what AT&T offered if the merger does not go through might be just enough to save T-Mobile u.s.? If that's the case t-mobile probably signed the deal with a smirk and when AT&T asked what is with the smirk t-mobile said "oh nothing" lol just a funny after thought.

For some reason I already felt T-Mobile was betting on getting the money & spectrum, which would be what they'd need to bring T-Mobile back up & all for free. T-Mobile is strong in the UK& might be having some help in making sure the merger isn't going to happen. Imo, these kinds of dirty tactics happen & hope it stays as it is 2 gsm networks & 2I cdma networks, just imagine one huge gsm network owning all virtual mobile networks, it'd clearly be a gsm monopoly.

This could be the most ignorant comment I've read on ALL of Android Central. Your supposed grasp of economics is without question blatantly stupid.

Citing Fox & the supposedly 8 yrs of Bush as what got us here shows you are also exceptionally stupid about govt too.

Try this... Read a document called the Constitution & learn who does what in govt. Then try to get your news from something other than ANY of the big media & their spin. NBC, ABC, CBS, MSNBC, CNN, FOX et al are part of the same problem so don't propagate a myth of impartiality.

After this learn how to read a company balance sheet & report back on how smart you are.

scottcolbert:

Any government including the "8" years. I am not bias, and I am sure you get real info huh?

If you actually believe that, and you're not actually a troll, or an AT&T shill then you're incredibly naive and have some growing up to do. Maybe you need to do some research into AT&T's antitrust history before spouting off a bunch of right wing misinformation.

I still dont understand how they figure that it will create thousands of jobs. It just dosent make sense, how does one company buying another and taking over their jobs, towers, customer support create more jobs. The only thing i can think of is itll make more jobs for the employed ones to do while they are at work since now they have to pick up the slack of those former T-Mobile employees that were terminated or "replaced". Besides how do they expect to pay for these "New Jobs" without raising prices? They need to get the additional revenue from somewhere, and how do you do that in business children? Thats right RAISE THE COST TO THE CONSUMER!!!!

It's simple. AT&T's statement is about "creating" jobs; they're saying nothing about the jobs they will eliminate or the one's that T-Mobile is already getting rid of in anticipation of the merger. The statement does not speak to "net jobs created" after the merger is a done deal. They were careful with the wording, and most people out there will believe the spin.

As someone else said here: They can't afford to support those jobs without raising prices and that will be hard to do but not impossible in this economy. Less competition means fewer places to run if prices go up.

Also I think it's more than a coincidence that T-Mobile didn't get an iPhone 4S. Their phones are incompatible with AT&T's wireless bands so that means more revenue for AT&T when you're forced to buy a shiny new AT&T iPhone.

I second that, T-mobile was the first to carry Android, and if this were to happen not only would the plan prices stay awesome, T-Mobile wouldn't take long to get updates!

Although this could also be seen as bad for Android because there is the possibility that the other carriers could see it as more competition and begin to lower it's offering of Android devices. Especially AT&T which took forever to begin carrying High-end Android Devices, and possibly Sprint since they supposedly also want to acquire Magenta.

AFTER THOUGHT: Not to mention all the criticism all the Google haters and Micro$oft and Apple would have on this matter, they'd probably try to block the merger or buy a cellular provider themselves.

Another thought is this would mean we might see some decent Moto devices on Magenta, I'd like to see a T-Mo branded Moto XPRT ya know?

And sorry for the rambling but last thought: There is no way Apple would buy T-Mobile, they haven't even given them an iPhone to Officially sell yet...

I would LOVE to see T-Mobile as a Google owned company but kept separated like they are doing with Moto. I think the fact that AT&T could own T-Mobile just makes me sick. It's not fair to the consumer who will have to pay much extra and deal with the slow expansion of their LTE coverage. Personally I agree with T-mobile's strategy...HSPA+ to HSPA+ 42 to LTE advanced...HSPA+ 42 is almost as fast as LTE and gives them an opportunity to jump to LTE advanced in the near future.

I guess that's just my $0.02...but I'm safe with my Sense 3.5 Droid Incredible on Verizon. :p.

Yes, T-Mobile carried the first Android phone, but they never successfully marketed it....without Verizon & the OG Droid, I don't think Android would have ever caught fire like it did.

It's more an issue of timing. When T-Mobile sold the first Android handsets, Android wasn't mature enough to really compete with iOS. By the time the Droid was released, Android had reached a level of usefulness to start to build market share.

I'm also very happy with T-mobile they have been great, and like Jerry said they have great customer service. To be honest I don't know if this merger should be stopped by the government or not, i'm not sure it's our governments place to do so. If T-mobile goes away, i guess I would still choose AT&T over Verizon.

It's completely in the government's power to prevent anti-competitive mergers. It has done so in the past and will continue to do so.

T-Mo is currently not doing well. Their parent company Deutsche Telekom has already said they will basically sell or close. They have no interest in T-Mo here anymore. So, what is the lesser of the 2 evils?

C'mon Google, Sprint, or anyone else (Besides AT&T and Verizon...and Apple) make an offer. New management may be able to keep them alive.

Sprint's go enough on its plate for now. (Failed WiMax, the fiscal burden of the iPhone, network upgrades and starting 4G from scratch with LTE). Plus, their networks are discordant (CDMA and GSM). I think Sprint learned a lesson from its acquisition of NEXTEL and will avoid buying other networks for the foreseeable future. That said, I think Google would be a nice home for T-Mobile; it already has a healthy catalog of Android phones so why stop now?

Acquiring T-Mobile would only help the company...more bandwidth, more coverage and a great competitive company right up there with VZW and AT&T.

HA! There is no chance Sprint would buy T-Mobile. Sprint has been so poorly managed over the last decade that there is no way they would even have the cash to make a competitive offer.

If it weren't for Verizon allowing Sprint customers to roam off their towers, they wouldn't have made it this long.

Could someone be kind enough to explain to me exactly how this "merger" would create jobs? Because I've completely missed at&t's explanation over the months.

Actually the lessor of the two evils is to allow T-mobile to close and allow their customer to go to whichever carriers is best for them.

If the FCC allows the takeover of T-Mobile by AT&T, there is precedence set and someday in the near future, Verizon will take over Sprint. When was the last year the Sprint had an actual profit?

Then there will be two, and those really small ones like Cricket will go the way of the looney bird.

Um this year? Their last quarter was the most profitable in 5 years, and this is prior to the iphone launch

So T-Mo closing down and forcing millions of customers no option other then to move elswhere is the better option then AT&T buying out T-Mo? In effect allowing those same customers the actual choice to stay with AT&T with their existing T-Mo plans or they can still leave for another company if they so choose?

Hmm........

Not sure about the details, but the CWA(you know, the union representing the workers), isBEHIND the merger.
Gives me the idea that maybe it will create or at least keep the same amount of workers. No way they want to lose membership.

I'm pretty sure T-Mobile employees aren't unionized. Its one of the main reasons I went with T-Mobile instead of the other carriers. I could be wrong now as that was ten years ago when I made my choice but I haven't read about any unionization (parasitic activity) since then.

A minor tweak to your comment.

T-Mobile, Sprint and Verizon are noted to not be union friendly companies. I believe CWA wants the merger, so they have access to MORE employees to increase their ranks.

Still, when was the last time a business merger CREATED jobs? The acquiring company looks to shed overhead. That is simply employees, buildings,etc. There wll be buy out packages in year one, but I am willing to bet the merger will shed at least 10,000 or more employees and close redundant stores and authorized dealers will be forced to go "exclusive". This happened when Cingular bought ATT back in 2004-2006, I see history repeating itself!!

The Government worry about the consumer? Which government is that? You cannot be speaking about the US government!

Our current administration has a history of given loans to failing enterprises, especially those with overseas owners, all T-mobile has to do is hold their hands out and get some good old US taxpayer money supplied from China.

Being a current T-mobile customer, I feel the same way. Being stuck between a rock and a wall. My contract ended this month and seeing how Amazon wireless has the penny pincher sale going on, im really considering switching to another carrier. I just wish there was a clearer future for T-mobile, rather than being left in the dark. Either way, I think i'm jumping ship.

Don't buy the need for competition byT-Mo. I am an ATT customer and do not consider T-Mo as a viable option. I would consider Verizon, but not T-Mo or Sprint for that matter. If T-Mo is a good option, why are the customers leaving in droves??

Customers are leaving in droves because they want NOTHING to do with AT&T.. If you notice when T-Mobile and AT&T merger was announced is when t-mobile began to really lose customers rapidly.. Or am I the only one that had noticed?

Unfortunately we all have Apple and the iPhone to thank for this. TMO doesn't have the iPhone, so it dies. Doesn't matter how good their service is.. Sadly, I'd leave sprint in a heartbeat if TMO was getting the G-Nex, their 4G in Brooklyn is amazing.

The union is behind the merger? Must be an ATT union because wasn't there a protest of some sort that Tmobile doesn't allow their workers to unionization? Of course the Union is in favor of the merger, more membership dues coming their way with the merger.

I wish Sprint would buy them, then we would have a legitimate big 3 and Verizon would have to lower their damn prices a bit...Def leaving after this contract anyway, Sprint should have their LTE up and running here in LA by then. Bye bye $114.96 phone bill, hello $79 unlimited everything, prob less with corp discount :-)

T-Mobile is either being sold off in tact to one carrier (AT&T) or in pieces to all of them. From what I hear, it's going bye bye. Be prepared.

Random (and generally useless) nitpick: review by an administrative law judge is not judicial review, at last insofar as "judicial review" is a legal term of art. Although "administrative law judge" has the word "Judge" in the title, an ALJ is not a member of the judicial branch, and usually exercises some combination of what is typically deemed executive and legislative power. The term "judicial review" as used in the U.S. legal system typically refers to review of executive and legislative action by the judicial branch.

"unless the government has a contingency plan for T-Mobile should the merger fail to pass. Hopefully, the fellows in Washington have a plan to serve the consumer's best interests," Wow! I find it it frightening how many people expect the government to run companies, not to mention basic aspects of their personal lives. The governments ONLY concern is to ensure whatever deals are made, they do not infringe on any laws or rights in place. If DT wants out, and wants to sell to whomever they wish, they can. As long as it doesn't break any laws.

There is a law, it's called section 7 of the Clayton Act. It's been on the books since 1914, it states quite simply :

No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.

So to the question of whether this is the business of government...yes it is.

As for contingency plans: the government has no responsibility for contingency plans, the government's responsibility in this instance is to block acquisitions that may substantially lessen competition. It is the company's responsibility to determine their next step if the acquisition is blocked.

As for the speculation regarding T-mobile's financial condition, there is a defense if the company can establish that it is a failing company. I've read AT&T's response to the department of justice complaint, they're not making a failing company defense. To make a failing company defense the parties must establish that the company is failing and that there are no other potential acquirers. I doubt very seriously that the parties could even begin to meet either burden.

Waybenn: Well said! It is very scary how anyone could want anything from a government an inefficient as our (regardless of Administration). The Boards of DT (Owns T mobile) and AT&T both approved this merger action. It may or may not be a good deal but the point is DT OWNS T mobile and should be able to do as they wish with it legally with the government trying to block it.

It's completely within the government's power to prevent mergers that damage competition in a market. You are completely wrong.

So what's been keeping AT&T from investing those millions of dollars before now? They don't need to gobble up a competitor to "invest money in the economy improving their infrastructure."

All the right wingers here are screaming about free enterprise and competition, etc, but we have no free markets in this country any more. Rather our economy is made up of monopolies and oligopolies (which act like monopolies). The reason our coverage is so sparse and data speeds so low compared to other countries is that we lack competition as it is in the marketplace. Every market and industry in this country right now lacks a true competition and as a result we get higher prices, lack of innovation and poor customer service. That's what monopolies and oligopolies offer and if this merger goes through it will only get worse.

Nothing is preventing them from doing this. The side benefit of doing this is that they're buying a competitor that has in the past required them to respond by improving their network and moderating their pricing. If you read the DOJ complaint there are references to documents where AT&T discusses the impact that Tmobile competition has had on them.

In my opinion, we do not have a free market because of government interference. Remember the bailouts? Too big to fail? Why was Lehman Brothers allowed to fail but Goldman Sacs not? Nonsense. They should have all been allowed to fail. New companies will take their place. You are either for government involvement or not. I am with AT&T and if their business model leads to their downfall, I will go to another company. Who is to say whether one of the smaller regional carriers will not emerge?

I will take may chances without government involvement unless the public health or military are involved. They do those fairly well mainly due to the revenue they take in and the massive cost of each.

We do not have a right to a cell phone with certain features at a certain price. If you do not like what a company offers, select another company. If you like none of your selections, get rid of your cell phone. There may be countries where that is dictated by the government but not this country!

Just my opinions, you all are certainly entitled to yours!

As a side note AT&T has spent billions to upgrade their network. Remember the FCC auction of the 700 MHz spectrum which was analog TV signals? Verizon and AT&T bid and spent over 16 billion to buy the rights to this spectrum for their LTE networks, which are now deploying. They have the right to recoup their investment and if their prices are too high for anyone, choose another carrier.

As a side note, AT&T's investment in infrastructure has lagged that of its competitors. In the last couple of years they decided to try and catch up as their network became more and more burdened generating greater levels of consumer complaints. One of the company's that took advantage of this was Tmobile, by competing aggressively, lowering pricing and pushing their version of 4G networks ahead. AT&T's response, again from the documents filed in the DOJ complaint was a direct result of such competition.

As for what you take your chances with that's nice. Most people aren't willing to limit government involvement to pbulic safety and military. There's nothing in the constitution that sets the limits that you desire.

As far as AT&T business model is concerned, buying out all of your competition might in fact be a successful business model, but often is a business model that harms consumers. As a consumer, I prefer that that not happen.

"Just my opinions, you all are certainly entitled to yours!"

You are correct. It is just your opinion. I will fight to the death for your right to be completely and absolutely wrong.

One thing that slightly gets lost in the discussion is that it would be bad for other carriers. T-mo and AT&T are both GSM carriers. Other than a few regional markets, most of the other carriers still rely on CDMA, and either partner with Verizon or Sprint for roaming. The merger pretty much means that there will be just one GSM carrier in the USA.

I've seen a lot of people who come to the US trying to figure out which carrier to use while in the states. Most get a pre-paid SIM from T-Mo instead of looking at AT&T. The merger means (at least until LTE becomes a world standard) that AT&T will be the only choice for anyone coming to the US wanting to not pay high international roaming fees.

The merger also makes me wonder what will happen to T-Mo features like UMA, which AT&T doesn't offer.

One big reason why ATT wants TMobile is building towers is tough (due to needing land, and people don't want to sell to phone companies) and it is cheaper to buy a company. That doesn't mean the merger should go through. I don't see an easy solution.

I am so glad blogs have no real power or we would all be in trouble. If this merger goes thru, then good for AT&T. If it doesn't go thru then good for T-Mobile. Either way I don't see T-Mobile lasting another 5 years. I could care less about customer service, prices of devices or monthly cost. My phone works when I need it to. I have both AT&T and T-Mobile and to really be honest, they are both the same to me service wise.

In the 4 years I've had both, I called AT&T CS about 9 times and T-Mobile about 5. All 14 times have been pleasent and quick. I know some of you just plain hate AT&T (I respect you) and others want to see AT&T do things better so lets see what the coming year has for us.

The only thing I wish is if I could get the Motorola Razr. That phone is so sweet, but Verizon just doesn't get the job done for me.

On a side note I hope all of you enjoy time off (if your not working) tomorrow!!!

Where does the government have any authority to determine if a merger moves forward or not based upon "job losses". Seriously, how the hell is the government supposed to know that? The FCC can recommend the merger for competition reasons, but not employment reasons.
I've had AT&T since they were Cingular and I have been nothing but pleased. It may help I spend $250 a month or so.

Another case of government over reach.

The government has the power to prevent mergers that damage competition. Period. Don't like it? Move to Somalia. It's a libertarian paradise.

My $0.02:

A company like Sprint should make an offer, which may be less than AT&T's, but keeps the company from falling flat on their face. I know Sprint has it's problems, but a small company merger would really help the smartphone market. Together they would have around 85 million subscribers, which is much closer to AT&T's 94 and Verizon's 105...I think it would make it soo much more competitive. With those carriers, I think I would switch to Sprint/T-Mobile and enjoy Sprint's and T-Mobile's combine good coverage. With both companies together, It would make everything better.

As geometry as the system is, this could be just an act senators are putting on to get bribe money from at&t. They see how desperate at&t is & are just waiting for there offer to come. I don't have faith in our nations system when it comes to money & our best interest, believe me if this wasn't so, then we wouldn't be in the situatioin our country is is in. When so much money'$ involved Greed kicks in & they'll make decisions to benefit only themselves this goes for both at&t & most of the people with power. Hope for the best, but expect the worst. I truly hope at&t doesn't get this deal & would rather see a smaller network witch has been giving deals as good as T-Mobile, so that the ideal of the low price & fair data stay after the buyout. Sprint or metro pcs has there unlimited plans for decent prices. I have sprint & pay $60+10 & live in NY where my downloads average 6,9 and 13 mbs usually 9 mbs, my point is I use about 1the gig a day sometimes 2 gigs because I watch avi aka, divx file movies before sleeping & if it were to be Verizon or at&t I'd be over my limit in 5the hours ... point is T-Mobile + another network with a great feature would only be better & also sprint being the only network witch still has nights and weekends starting at 7pm is already good,with T-Mobile's service and network would only makebe sprint better. Even if the price stays the same,there would be no excuse to raise the price & I can only hope this wouldn't cause data capping or higher priced plans, this is what I hope would happen.