Today, September 6th 2011, Sprint has a brought a lawsuit against AT&T, Inc., AT&T Mobility, Deutsche Telekom, and T-Mobile in an effort to block the proposed merger between the AT&T and T-Mobile. Looks like Sprint has stopped the name calling and complaints against the proposed merger of AT&T and T-Mobile and decided to get serious with a lawsuit. We suppose the U.S. Justice Department lawsuit emboldened them to do the same.
The Lawsuit states that the proposed acquisition would be “a violation of Section 7 of the Clayton Act.” The Clayton Act is an Antitrust law passed in 1914 which “prohibits the acquisition of the whole or any part of the stock or assets of another corporation where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to create a monopoly.”
There is no doubt now that Sprint is in the for the long haul with the fight against this transaction. Sprint and many others fear such a deal would cause higher prices and less innovation, entrench existing carrier duopolies of AT&T and Verizon. It almost seems as though 2 companies that were later formed after the break-up of “Ma Bell would be holding the industry hostage again as they did in the late 1970s into the early to mid 1980s.
[spoiler]06 September 2011
Sprint Files Suit to Block Proposed AT&T and T-Mobile Transaction
WASHINGTON (BUSINESS WIRE), September 06, 2011 – Sprint Nextel [NYSE:S] today brought suit against AT&T, Inc., AT&T Mobility, Deutsche Telekom and T-Mobile seeking to block the proposed acquisition as a violation of Section 7 of the Clayton Act. The lawsuit was filed in federal court in the District of Columbia as a related case to the Department of Justice’s (DOJ) suit against the proposed acquisition.
“Sprint opposes AT&T’s proposed takeover of T-Mobile,” said Susan Z. Haller, vice president-Litigation, Sprint. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”
Sprint’s lawsuit focuses on the competitive and consumer harms which would result from a takeover of T-Mobile by AT&T. The proposed takeover would:
Harm retail consumers and corporate customers by causing higher prices and less innovation.
Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 52 million customers at the end of 2Q 2011 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.