Challenge To T-Mobile Deal Brings Out Fans and Critics

Jennifer LeClaire, <a href=''></a>

Just two days ago, AT&T's CEO was expecting a green light to acquire T-Mobile from the feds by the first quarter of 2012. So the Department of Justice's move to file an antitrust suit to block the deal was a shocker.

Now organizations are taking a stand on both sides of the issue. Although they disagree on details, proponents and opponents of the deal are passionate about their arguments.

Limiting Consumer Choice

Public Knowledge has asked the Federal Communications Commission to use its authority under the Communications Act to reject the deal immediately. Public Knowledge argues that carriage of international traffic, international roaming, and reciprocal carriage agreements all are part of the international component that makes it compulsory that the deal be rejected.

"The Justice Department has done its job," Public Knowledge Legal Director Harold Feld said. "Now the FCC should do its job, follow the law, and reject the takeover of T-Mobile."

Consumer Watchdog agreed. Its lawyers brought a nationwide class-action suit against AT&T in 2006 seeking refunds for AT&T customers.

"The last thing beleaguered American consumers need right now is higher prices and shoddier cell-phone service," said Harvey Rosenfield, founder of Consumer Watchdog and one of the lawyers in the 2006 lawsuit. "That's exactly what would happen if AT&T was permitted to buy T-Mobile. The FCC should join DOJ in opposing this anticompetitive proposal."

DOJ Opposition 'Perplexing'

But not everyone is on the DOJ's side. The Hispanic Federation and the Competitive Enterprise Institute (CEI), among others, are blasting the government for trying to block the merger.

"This Justice Department's action seems premature and perplexing, given the level of public discourse currently under way across the country on the merger. More than most groups, Latinos depend on wireless and mobile broadband connectivity," said Lillian Rodriguez Lopez, noting that the Hispanic Federation is focused on advocating for enhanced benefits and protections for the Hispanic community.

"We were optimistic to hear more about the thousands of new jobs that AT&T has promised to create in our nation if its merger receives federal approval, including the 5,000 overseas jobs it mentioned it was returning to the states today," she said.

Subverting Free Enterprise

Ryan Radia, CEI associate director of technology studies, said the DOJ's lawsuit amounts to a subversion of the evolution of free enterprise and economic progress. As he sees it, federal regulators and their arbitrary "merger guidelines" are woefully ill-equipped to judge the merits of proposed business deals, particularly in dynamic modern markets such as the wireless sector.

"To be sure, no business deal is ever guaranteed to benefit consumers or the economy," Radia said. "But market participants, including upstream suppliers, customers, potential entrants, and capital markets, stand ready to check detrimental concentration in telecommunications if it arises."

He said the suit is also further evidence of the Obama administration's antipathy toward the job-creating sector. AT&T's acquisition of T-Mobile has the potential to create hundreds of thousands of new jobs by accelerating the rollout of advanced wireless networks nationwide. He pointed to a new Deloitte report that predicted 4G mobile broadband would generate tens of billions of dollars in economic growth in coming years.