Sprint Takes a Swing at AT&T

AT&T is like a piñata at a children’s party. It’s an easy target; everyone’s jumping in line to take a bash at it; we’re all waiting with baited breath to watch it explode. Sure, we won’t get any candy, but the result will be just as sweet: no AT&T/T-Mobile merger.

Taking the latest swing is Sprint Nextel. The company filed a lawsuit last week to challenge AT&T’s proposed $39 billion purchase of T-Mobile. Sprint’s antitrust claims come just one week after the Department of Justice filed its own suit to block the merger. And now the media have joined the flogging as AT&T works overtime to salvage the deal.

In its filing, Sprint echoed the DoJ’s concerns that the deal is anti-competitive and would create a duopoly between AT&T and Verizon. The deal “would force consumers to endure higher prices and be denied the fruits of vigorous innovation,” Sprint said.

Free Press and its allies have poked a stick at AT&T ever since it announced the merger, arguing that the deal would hamstring consumers and slash jobs.

It’s no surprise that third parties are getting involved to contest this merger, or that the DoJ has sued. The case is being dragged out only because AT&T is clinging to the doorframe.

The company has spent millions of dollars trying to wine and dine its way to a merger, and has plied lawmakers with a promise to restore call-center jobs in the U.S.

AT&T has also hinted it will make new concessions on the merger, though the details of its plan are still vague. Last Friday the company sent a letter to the DoJ highlighting the merger’s so-called benefits — and chastising the department for failing to recognize them.

The letter claims the “combination of T-Mobile and AT&T is good for consumers.” It says:

“That means increased output, higher quality service, fewer dropped calls and lower prices to consumers than without the merger. Rather than substantially reducing competition, the combined firm will usher in more intense competition to an already vibrantly competitive market.”

There’s so much to debunk in just this one paragraph, let alone the entire letter, that it’s hard to know where to start. Luckily, the media were on it, knocking AT&T before company execs could take a breather.

Karl Bode of DSL Reports swung hard with his response. He reminded readers that AT&T has a long track record of raising rates while refusing to invest in its networks. (Dropped calls are a sensitive subject for AT&T subscribers.)

Bode writes:

“AT&T lobbyists must have grown so used to getting what they want that they believe they can simply repeat debunked talking points and still somehow get deal approval, but unless AT&T comes up with some whopping concessions and a lot more campaign contribution cash — it’s simply not going to be that easy.”

And CNN gave AT&T a good bashing. David Goldman wrote on the CNN website that the company is “talking out of both sides of its mouth” as it simultaneously disparages T-Mobile for its loss of customers while also claiming the acquisition is the key to AT&T’s future in a fierce, competitive market where every network is a threat.

“So how can AT&T claim that the regional and lower-cost carriers represent significant rivals,” the article reads, “if T-Mobile, the nation’s fourth-largest wireless company, can’t compete?”

Stay tuned for new and creative tactics from AT&T as it tries to keep the merger alive.

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