Justice Department 'Ready and Eager' to Go After AT&T

Think the fix is in on the $39 billion AT&T/T-Mobile merger?  Think again. Attorney General Eric Holder says his antitrust litigators are "ready and eager" to fight the case in court.

The Justice Department filed suit to block the deal in August, claiming the proposed merger would be anticompetitive.  It would reduce the number of national cell phone companies from four to two and Holder says it would raise prices for consumers.

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said Deputy Attorney General James M. Cole said when the suit was filed.  

“Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition.”

Lobbying campaign

AT&T has claimed the deal would help consumers, saying it would speed the deployment of high-speed Internet access nationwide by making more spectrum space available to AT&T.

The company has unleashed a ferocious lobbying campaign aimed at persuading Congress and the Obama Administration that the deal is a win for consumers.

It has also recruited non-profits and even consumer groups to weigh in on its behalf.  Critics say it has done so through the skillful application of funds rather than a compelling argument.

But the effort has so far had no visible impact on the government's stance. Holder appeared at a Senate hearing today and said his department is  ready for action.  

"There is a trial team that is in place and they are ready and eager to go to court,'' he said.

Consumers' view

Besides its lobbying efforts, AT&T has launched an advertising barrage aimed at winning the hearts and minds of consumers but so far with little notable effect.

“Ask the T-Mobile users. We all know what saved AT&T. Apple did! That's how come they can throw all that money around. Less competition is not the American way,” a consumer named Dave said in a recent ConsumerAffairs.com posting.

“This could raise cell phone rates for everyone, not just T-Mobile users,” another poster, Daniel, said. “Less compition means higher prices, its basic economics. Let's band together and stop this, everyone speak out.”

Another poster, Craig, chimed in with “AT&T + T-Mobile = better reception? Oh, that's a good one.”