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Groups: Consumers Win as AT&T Drops Merger Plan

December 22, 2011

HARTFORD, Conn. - First, the Justice Department filed suit to stop it. Then, the Federal Communications Commission moved to block it. In the end, AT&T this week officially dropped its $39 billion effort to take over T-Mobile, signalling a stronger stand on antitrust oversight by the Obama administration than its predecessor.

Amalia Deloney, grassroots policy director for the Center for Media Justice, says there's more to the story.

"The more exciting news is what led to it, which is really a massive groundswell of people from all across the country saying that this wasn't in consumers' interests or community members' interests."

AT&T wanted T-Mobile's cellular airways, called spectrum. In its statement, AT&T said the acquisition would have "offered an interim solution to...spectrum shortage." T-Mobile's parent company, Deutsche Telekom, walks away with a $4 billion consolation prize, a "break-up fee" that was inserted in the original deal.

Parul Desai, speaking for the Consumers Union, says the Washington, D.C.-based lobbying against the deal was aided by a groundswell of public opinion.

"The opposition was significant, in that it pointed out that the facts really were against the merger, and it was easy to point that out."

Deloney says as she and representatives of other community and consumer groups talked with people about the movement to stop the merger, they heard three things repeatedly.

"They knew of absolutely no merger in their lifetime that had led to the creation of jobs; they understood very clearly that there was nothing good about a monopoly; and they know that AT&T has no decent track record working with communities."

In a statement, a Justice Department official said, "Had AT&T acquired T-Mobile, consumers in the wireless marketplace would have faced higher prices and reduced innovation."

Melinda Tuhus, Public News Service - CT