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Will AT&T Offer a Compromise to the DOJ?

by on02 September 2011 1626 times

fingersWell, well, well it looks like the folks at AT&T are going to have a go at settling the Anti-Trust suit brought by the DOJ. Originally some statements from the Telecommunications giant had indicated they would fight this in court. Now it according to a report from Reuters they are looking for a compromise that will allow the deal to go through without the need to bother any judges. This would seem to indicate that the deal is a bit shady in the first place, despite AT&T’s claims to the contrary.

But what kind of compromise would AT&T need to make to get this merger deal through? We know that T-Mobile does not care one way or the other. In fact they have a rather healthy failed merger clause that gives them a nice chunk of money in the event it is blocked. So the internet and the press begin to speculate and analyst put in their two cents. Right now there are rumors that AT&T will agree to sell off 25% of T-Mobile to its competitors. It will also probably agree to maintain the pricing and plan structure that T-Mobile has (for a predetermined period of time). These all sound good on the surface, but they hardly address the core argument in the suit. You see the DOJ put it very bluntly; if AT&T and T-Mobile merge it will reduce the competitive market by 25% and put the GSM Market firmly in AT&T’s hands.

This is something that is absolutely not in the interest of consumers, but then again most business dealings are not. AT&T is in a rough position, with the loss of the iPhone to Verizon and the possibility that Sprint will get the iPhone5 later this year AT&T no longer has a truly big seller and the fact that they banked on the iPhone instead of working on 4G put them behind their competitors. Now they have to act or they will fall even farther behind. Instead of investing in rebuilding their aging network they want to buy up one that is working towards modernization and pickup quite a few customers in the mix.

For now it is all in the hands of the Federal Regulators and perhaps even judges as this merger moves towards its fate; whatever that is

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Last modified on 02 September 2011
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