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Communications supergiant AT&T may be waging a losing battle in its attempts to complete a merger with T-Mobile. This past Wednesday, the Department of Justice filed an antitrust lawsuit against the company. The DOJ’s chief concern in filing suit is to preserve competition in the industry. Although the wireless service provider industry has some smaller regional providers, only four parties compete on a national level — AT&T, T-Mobile, Verizon, and Sprint. The DOJ alleges that the merger would violate antitrust rules by greatly reducing competition, leading to “far higher prices, less product variety and innovation, and poorer quality services.”
Attempting to make the deal more palatable to its opponents, AT&T has pledged to move 5,000 call center jobs back to the United States should the merger succeed. AT&T has touted this promise as the “largest return of jobs by any U.S. company since 2008.” However, despite also guaranteeing no loss of United States-based call center jobs, the company has not disclosed how many jobs would be eliminated in other departments upon completion of the merger.
Should AT&T succeed in defeating the DOJ’s lawsuit, it will face a stone wall in seeking requisite approval of the merger from the Federal Communications Commission. FCC Chairman Julius Genachowski stated that the merger had already “raise[d] serious concerns about the impact of the proposed transaction on competition” prior to the DOJ’s filing. Several members of Congress have also expressed concern or directly opposed the merger through letters to both the DOJ and the FCC, citing the potential harmful effects on competition, consumer choice, and rural and regional wireless providers.
Should AT&T accomplish the (nearly) impossible, it would displace Verizon Wireless as the largest United States wireless carrier, with more than 132 million connections to mobile wireless devices and about $72 million in mobile wireless service revenue.
– Meredith Lawrence
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