Sprint's lobbying pays off with new ally: DOJ
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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