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AT&T The Almighty Buck

Leaked AT&T Letter Damages Case For T-Mobile Merger 201

Posted by Soulskill from the who-here-is-surprised dept.
An anonymous reader writes "Yesterday a partially-redacted document briefly appeared on the FCC website, accidentally posted by a law firm working for AT&T on the $39 billion T-Mobile deal (somewhere there's a paralegal looking for work today). While AT&T engaged in damage control, telling reporters that the document contained no new information, a review of the document shows that's simply not true. Data in the letter undermines AT&T's primary justification for the massive deal, while highlighting how AT&T is willing to pay a huge premium simply to reduce competition and keep T-Mobile out of Sprint's hands."
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Leaked AT&T Letter Damages Case For T-Mobile Merger More

Leaked AT&T Letter Damages Case For T-Mobile Merger

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  • Nothing new here (Score:5, Insightful)

    by nurb432 ( 527695 ) on Friday August 12, 2011 @05:06PM (#37073868) Homepage Journal

    No, really there isn't. Corporate takeovers to stifle the competition is normal practice ( hell its the primary reason they exist ), so nothing 'new' was really released here.

    • Re:Nothing new here (Score:5, Informative)

      by Baloroth ( 2370816 ) on Friday August 12, 2011 @05:15PM (#37074004)

      You're right, anyone who is surprised by this is, well, lacking in foresight, to put it diplomatically. The merger was obviously about anti-competition, especially given that T-Mobile is one of only two contract companies (Sprint is the other) to undercut Verizon and At&T prices and data caps. This deal should not only not go through, the attempt should result in massive penalties against AT&T (splitting the company? Forced regulation of prices or removal of data caps? Ah, one can dream.) More likely, this will be brushed under the table, the right people will get "campaign donations", and everything will go smoothly. For AT&T. And the customers will get screwed. More screwed, that is. But, in the wireless provider business in America, that's pretty much how these things go.

    • Actually, there is one new surprise....

      The actual document leak was a surprise. Everything else is something we all expected.

    • When they're for good reasons.

      Apple bought a couple chip design firms, seriously helped Apple compete against the likes of Samsung in the mobile space.

      Disney bought Pixar to revive its dying animation business and basically salvage a profitable relationship, gaining talented Pixar execs who could all-around revive Disney's creative side (I still think Pixar halfway bought Disney).

      But this one was obvious. There is no logical reason for this purchase other than shrinking the choice of the consumer.

    • Re: (Score:2)

      by ischorr ( 657205 )

      It's something we all know. But it's tougher for the bought-off politicians to ignore if AT&T's own documents publicly support it. Remember, AT&T's public statement is that it will actually INCREASE competition; they're not stifling anything.

      So why would you "meh" this, except to be That Guy On The Internet?

    • Just because it's 'normal practice' and 'nothing new' doesn't mean there shouldn't be some red flags, or at least some general outrage. Competition is necessary for a well functioning market place. When a deal is done for the sole purpose stifling competition at the expense of the consumers, then that is exactly the reason and place for regulation.

  • They'll just get a slap on the wrist for lying. Worst case, the CEO will "resign" (aka: early retirement w/benefits) for good PR and the whole thing forgotten in a month.

  • Merger will still happen (Score:3)

    by ArchieBunker ( 132337 ) on Friday August 12, 2011 @05:07PM (#37073874)

    So can anyone name a merger that the government has successfully stopped?

  • 'Leaking' a statement of that magnitude was 100% intentional by someone who didn't want it 'going down without a hitch'. You know it's true.

    • 'Leaking' a statement of that magnitude was 100% intentional by someone who didn't want it 'going down without a hitch'. You know it's true.

      A paralegal willingly giving up their job for the benefit of faceless consumers? ... in this economy?

      • Re: (Score:3)

        by geekoid ( 135745 )

        Believe it or not, there are people who would do that, even in this economy. The may come as a shock to you, but someone people will die for other people.
        You surprise belays an undertone of selfishness that is beneath you.

      • Re: (Score:2)

        by Lehk228 ( 705449 )
        i'm sure Verizon will take care of them

    • Re: (Score:2)

      by geekoid ( 135745 )

      Because no one ever makes a mistake. If they wanted it leaked, it would have been directly to the papers.

      Somewhere there is an IT guy taking the rap for some paralegals mistake.

      • Re: (Score:2)

        by PPH ( 736903 )

        If they wanted it leaked, it would have been directly to the papers.

        Its called plausible deniability. And it reduces the potential damages should AT&T try to sue the paralegal. They'll still end up fired, but intent to harm AT&T will be difficult to prove.

  • US cell system (Score:5, Interesting)

    by Anonymous Coward on Friday August 12, 2011 @05:12PM (#37073950)

    I was a recent visitor to the USA and was astonished at the 3rd world nature of its cell system. I had never imagined it was so bad, before visiting. Why USAians don't demand better regulation is a mystery to me. They seem intent on defending the very thing that makes their lives miserable compared with most developed nations.

    This was also the impression I had of its subway system. I've ridden subways in Moscow, Tokyo, London, and other major cities. All were clean, safe, and the sort of system a developed nation can be proud of. The subways in the US smelled of urine (!!), were infested by RATS (!!), covered with trash, and had the feel of a thing you'd only want to use if you do not value your personal safety. This was my first exposure, and really changed the view I used to have of the USA as an advanced nation. It really is on par with some very poor and undeveloped countries in terms of civic infrastructure.

    • Re: (Score:2)

      by grumling ( 94709 )

      Once you get out of Manhattan, the place gets better.

      I promise.

    • Your Phone experience was probably AT&T, since it has the frequencies that most foreign phones roam to the US on. You're absolutely right about the (lack of) regulation here, but it's too late to change all of the non-interoperable systems the phone companies use.

      As for the subways, they are paid for by local governments. You must have been in NYC or Boston, because those are old and decrepit systems. Washington DC, San Francisco, and Atlanta have very nice systems. I'm in Portland and we have a top-not

    • Why USAians don't demand better regulation is a mystery to me.

      Regulation is a four-letter word over here. It "handcuffs job-creators" and "stifles industry", and no matter what national polls show, (almost) no elected officials fight this Big Lie.

    • Sorry you had a bad experience, but the US is nearly as large as the entirety of Europe, so that's a terrible comparison considering that outside the metro areas cell service quality is pretty decent. Also, I don't see how the "US Subway System" (never heard of that one...) is in any way related to the discussion of mobile regulations.

      The United States is a huge place, so picking out faults as a whole are pretty ignorant. If anything, I'd say regulations on spectrum use should be relaxed so more carriers ca

      • If anything, I'd say regulations on spectrum use should be relaxed so more carriers can get in on the game.

        And who is going to pony up 100 billion dollars to just start up a new network from scratch? Apple? Exxon?

    • Re: (Score:2)

      by s73v3r ( 963317 )

      Why USAians don't demand better regulation is a mystery to me.

      Because regulation is the first step on the path to SOCIALISM! We can't have that! We need business to be as free as possible, so we can follow in the footsteps of other great Libertarian countries like Somalia.

      Also, am I the only one who sees "USAians" as "US Asians"?

    • I'm not an American, but I live here for several months now.

      And you know what? It's a big country. Bigger than Europe, in fact. And it is also a federation - state borders are not just lines on the map, there really is a difference when you cross them. Some parts of US are, indeed, decidedly third-world. Others have all the infrastructure you could possibly ask for. It makes zero sense to try to average that out - it'd be like averaging, say, Finland and Albania, just because they're both in Europe.

  • Ma Bell seeking to reduce competition?! (Score:3)

    by Chris Burke ( 6130 ) on Friday August 12, 2011 @05:13PM (#37073964) Homepage

    No, say it isn't so! My reality is crashing down on me. I suddenly feel so disillusioned and jaded. I'm either going to go write emo poetry, or kill myself.

    No, wait, that would just be a huge overreaction. Suicide it is, then.

  • Capitalism at its best (Score:5, Insightful)

    by v(*_*)vvvv ( 233078 ) on Friday August 12, 2011 @05:13PM (#37073972)

    It's no new information because we knew it already.

    Law of Capitalism #1: Customer value directly conflicts with corporate income. If more value goes to the consumer, less value will go to the corporation.

    Mergers are never for the benefit of the consumer.

    AT&T is willing to pay a huge premium simply to reduce competition and keep T-Mobile out of Sprint's hands

    Law of Capitalism #2: Monopolies win.

    But the problem isn't with our understanding of these laws. It's with the FCC not doing it's job, and everyone involved being paid off.

    • All regulators are being captured. Captured regulators don't do their job. Problem is I think that the politicians WANT the regulators to be captured.

      • Re: (Score:2)

        by PPH ( 736903 )

        Problem is I think that the politicians WANT the regulators to be captured.

        For a fee, yes.

        Its like a hunting reserve. You pay to get in, bag your limit and tie it to the bumper of your SUV. Congress isn't making any money by letting the regulators run free.

    • Re:Capitalism at its best (Score:4, Informative)

      by immakiku ( 777365 ) on Friday August 12, 2011 @05:38PM (#37074240)
      Law 1: not true. In a competitive market, the corporation that can give customers the most value will keep the most value for itself. What you say is only true in monopolistic and (sometimes) oligopolistic environments. In this case, however, the market is pretty much an oligopoly. That's why the government has to step in to determine if this merger is something that allows AT&T to compete better and provide more value to the customers or if it's something that will altogether transfer more value from customers to AT&T.

      • In a competitive market, the corporation that can give customers the most value will keep the most value for itself.

        Right on cue!

        This is the myth that fuels small to medium businesses, and the dreamers who still have any hope left.

        Law #1 is true, and that is precisely why businesses that give the most value suffer through self-sacrifice and lower profits. While businesses are small, it is the moral stance of the founders and business operators that can counteract this law and increase customer satisfaction. It is at a price, but often those with a passion, and who are already happy with their compensation, such as the fo

      • Re: (Score:2)

        by s73v3r ( 963317 )

        Law 1: not true. In a competitive market, the corporation that can give customers the most value will keep the most value for itself. What you say is only true in monopolistic and (sometimes) oligopolistic environments.

        Which is why he posted Law 2. And in an unregulated market, AT&T would have already bought T-Mobile, and Verizon probably would have already bought Sprint.

    • US economic system != capitalism.

      Capitalism isn't the government giving money to corporations at taxpayer expense.

      With true capitalism monopolies can only exist if they serve the consumer better than any other competitor.

      • With true capitalism monopolies can only exist if they serve the consumer better than any other competitor.

        So ruthless, self-serving competition doesn't exist in true capitalism? Interesting!

        If only we could have it. Darn reality!

      • US economic system != capitalism.

        I really wish this statement were true to everyone's eyes, and we could just admit it. Unfortunately, to many run this code:

        function USA(){
        capitasim;
        }

        if (USA != capitalism)
        then USA = socialism;
        Those who cannot see the code at work for what it really is cannot fix it. But thank Gov for free speech, because we all get to spew bullshit about it all day regardless of how anything is actually implemented.

      • Re: (Score:2)

        by s73v3r ( 963317 )

        The US is close enough to Capitalism that the distinction is not important.

        And would you be arguing that in a "real Capitalist" setup, the companies would not lobby the government?

      • Re: (Score:2)

        by s73v3r ( 963317 )

        With true capitalism monopolies can only exist if they serve the consumer better than any other competitor.

        Or if they buy out their competitors and force the others out of business. In case you haven't noticed, Microsoft was able to get monopoly status without any special intervention, just good ol' fashioned anti-competitive behavior.

      • USA has private ownership of the means of production (aka "capital").

        That is the only necessary and sufficient trait of capitalism. Taxes, subsidies etc are completely irrelevant - they represent government policy, but do not change the basis of the economic system.

        USA is a capitalist economy.

    • In fairness, sometimes it's win/win/win (acquiror/acquisition/consumer) when a company with a nicely developed sales channel buys up a little invention and puts some wood behind the arrow.

      I used to work for a major heavy equipment manufacturer and scout around looking for neat inventions to put on our products. One was a patent by a nice dude with a high school degree that was totally awesome. We picked it up from him, made him a boatload of cash, and threw our engineering resources behind it and got it i

    • gets the most business. He who gets the most business makes good profit.

      He who supplies poor value to the customer ends up not having customers.

      That is usually unless some external force, such as a government, interferes. The AT&T monopoly was created by the government. Even when monopolies do develop naturally, they don't last. Standard Oil was already starting to crumble before the forced breakup (and it had done some good for the consumer, vastly lowering the cost of oil products through various effi

      • Re: (Score:2)

        by s73v3r ( 963317 )

        That comment ignores everything there is about reality. Ignoring the fact of lock-in, the fact of limited consumer choice, and the fact of market inertia.

  • This may result... (Score:3)

    by grimmjeeper ( 2301232 ) on Friday August 12, 2011 @05:14PM (#37073980) Homepage

    ...in the paralegal getting an "involuntary career path adjustment". But I doubt much will come of this. The only way anything significant will happen is if someone in congress latches on and runs with it. But that will only happen if they're from the district of a competitor and can count on their "support" in the upcoming election.

  • Would Sprint buy T-Mobile? (Score:5, Insightful)

    by nine-times ( 778537 ) <nine.times@gmail.com> on Friday August 12, 2011 @05:14PM (#37073984) Homepage

    Sprint had (has?) a substantial problem when they bought Nextel, since it meant that they had to maintain two incompatible networks: CDMA and IDEN. Now they're going to buy a GSM carrier too? Seems silly.

    • Just means you slowly phase one out. If AT&T buys T-Mobile they will be phasing out all the T-Mobile G3 phones (or force them onto 2G edge) so why wouldn't Sprint do something similar?

      • Re: (Score:2)

        by s73v3r ( 963317 )

        AT&T is still a GSM carrier. It's a lot easier for them to deal with two sets of GSM 3G frequencies than it would be for Sprint to deal with WiMax 4G, CDMA 3G, and GSM 3G.

    • Re: (Score:2)

      by grumling ( 94709 )

      That's because iDEN's biggest feature, push to talk, never quite worked right on the CDMA network. they couldn't get people to switch.

  • Reference is made to it, but where is it? I'd like to see it... anything that can prevent the T-Mobile buyout would be welcome news for me. I am a T-Mobile customer because they are the best for service and AT&T and Verizon are both evil as hell. Sprint burned their bridge with me as a previously long-term customer when they created a atmosphere where you had to threaten to leave their service in order to get what I needed. And before long, they started disconnecting "troublesome customers" to reduc

  • As a happy T-Mobile customer let me just say, woohoo!!!!!

    Even if T-Mobile ends up not being able to survive on their own, i'd be happier getting subsumed into Sprint or Verizon. They certainly couldn't be any worse than AT&T. Not to mention that aside from all the other issues i have with AT&T, as someone who is also an Android owner i'm very happy with what T-Mobile has been doing with the platform. AT&T seems to be the company least likely to carry on in that spirit after acquiring T-Mobile.

    • AT&T seems to be the company least likely to carry on in that spirit after acquiring T-Mobile.

      from a (my) German perspective the whole issue is incredible funny.

      here in Germany Deutsche Telekom (with subsidiaries like T-Mobile) is the 800-pound gorilla in telecommunication, formerly a public company, owner of most landlines, slow, bureaucratic, ... you name it. to see this shitty shop mentioned as a agile and innovative provider seems ridiculous to me. Is AT&T owner of branches in other countries? It would be interesting to know if Ma Bell is similar flexible outside the ancestral domestic marke

  • I'm a TMo Customer... (Score:5, Interesting)

    by milbournosphere ( 1273186 ) on Friday August 12, 2011 @05:22PM (#37074090)
    ...and this merger won't be good for me. I went to my local public dialog forum here in San Diego, and found quite a few others like me. Yet, we weren't able to talk because AT&T had lined up minority group after minority group after interest group after volunteer group talking about how "good AT&T is for the community." I shit you not, one lady even came up and spoke for her whole two minutes about how her pregnant 14-year old daughter wouldn't be able to function without this merger.

    The sad thing? Almost every person who stood up disclosed that they had received grants, money or deals from AT&T. Two hours later, I walked of the forum disgusted. I've been an ATT customer before, and I don't want to be again, and people must agree with me, because 50k people jumped ship from T-Mobile last quarter.

    I'm bummed because T-Mobile has historically been a great company to work with. Any company that rings you up to make you aware of and retroactively pay for an overcharge is okay in my book. For some reason, I couldn't see ATT doing that kind of thing. Oh well, at least I'll be able to jump ship to Sprint when ATT officially acquires T-Mobile. I don't trust the FCC or the FTC to lift a finger to stop this merger.

    • I first had Cingular Wireless and they were great.... then they got soaked up by ATT and boy was it horrible. Dropped calls everywhere.

      Eventually switched to verizon after all of that shit. I have been with Verizon for over 3 years now and have yet to get a dropped call.

      I just wanted to get away from GSM in general and switch to CDMA over the voice clarity.

      But with Verizon wanting to cap data limits (i'm grandfathered in for unlimited, but not sure for how long)... I don't know who to go with...

    • Re: (Score:2)

      by scragz ( 654271 )

      I'm a T-Mobile customer and the behind-the-scenes changes are already happening and affecting me. A few months ago they discontinued the pseudo prepay plan I was on and made me pay a deposit. This month I had a bunch of dumb stuff happen that required a lot more minutes than I normally use. I called them to see about ordering more and their brand new policy is that you have to sign up for a new two-year contract just to add minutes to your plan for the month or you get charged $.49/minute (!!!) if you go ov

    • Current T-mo customer here as well. I hopped on with T-Mo when I bought my N900 (love it!), and have really loved interacting with the company since. When I heard about the T-mo merger with AT&T I started having flashbacks to when Cingular got bought by AT&T and my optimism died a little bit more that day.

      Anyways, since I value having a GSM phone far more than I do most other items when picking a cell service, I still want to stay with a company that allows me to use sim cards in unlocked phones

      • Agree. Got on TMo to get good service with phones that take a SIM card. (I still don't get phones with no SIM card --what do you people do when you travel? Buy and learn to reconfigure a new phone just because you're in Japan/France/Ecuador for 2 weeks? Keep your non-functioning phone and disappear from civilization?) TMo had no problem with me bringing my unsupported unlocked Treo onto the TMo network, and now I similarly have a N900 which does what I want, as opposed to what the phone's corporate maste

        • -what do you people do when you travel

          Simple - I have an el-cheapo Nokia I use :).

          Also - if you know you are going to travel a lot there are CDMA phones that support both CDMA and GSM.

          • Re: (Score:2)

            by KWTm ( 808824 )

            "-what do you people do when you travel"
            Simple - I have an el-cheapo Nokia I use :).

            Also - if you know you are going to travel a lot there are CDMA phones that support both CDMA and GSM.

            That's what I figured --so the el-cheapo phone you use does have internet connection? Do you use it to sync your files over to the Real Phone or do you end up using the el-cheapo? And what if it doesn't run the software that you're used to on the Real Phone? Or does it not have internet, and then your Real Phone is cut off f

        • Re: (Score:2)

          by s73v3r ( 963317 )

          I still don't get phones with no SIM card --what do you people do when you travel? Buy and learn to reconfigure a new phone just because you're in Japan/France/Ecuador for 2 weeks?

          Most people don't go overseas often, if at all. Meaning that it's not important to them to have this ability, especially at the possible expense of worse service in their primary usage area.

          And there's also places like the one I grew up in, where the only providers were CDMA (Verizon and Alltel). Now that Verizon ate Alltel, AT&T is moving in, so there's a GSM carrier.

  • Deal will still probably go through (Score:3)

    by Immerial ( 1093103 ) on Friday August 12, 2011 @05:33PM (#37074196) Homepage
    It's funny, I read some where AT&T had announced that they predicted that they would have to divest $8 billion in various stuff to make the deal go through. The funny part is that I read it as "we need $8 billion to buy off the politicians for the deal to go through".

    • Re:Deal will still probably go through (Score:4, Interesting)

      by quarterbuck ( 1268694 ) on Friday August 12, 2011 @06:02PM (#37074482)
      The story pretty much says the same thing.
      AT&T has said that it will cost them $39 Billion to buy TMobile. It has also claimed to investors that it will save them $10Billion.
      The justification is that it will enlarge Wireless coverage in USA.
      The leak now claims that the expanded network coverage will cost only $3.8 Billion http://www.wirelessweek.com/news/2011/08/unredacted-ATT-filing-shows-high-price-tag/ [wirelessweek.com]
      So AT&T Pays $39 Billion, saves $3.8 Bilion in network costs and $6.2 Billion in non-network costs (say closing and selling stores/laying off duplicated jobs). Assume that Sprint is worth the same as TMobile intrinscially - which is approx. $10B. The remaining $19 Billion premium paid must then be the cost of eliminating competition or the cost of keeping sprint from expanding.

      • Re: (Score:2)

        by PPH ( 736903 )

        The justification is that it will enlarge Wireless coverage in USA.

        Enlarge AT&T's wireless coverage, that is. They won't be adding one stinkin' cell site when they buy T-Mobile. That's existing coverage. If they wanted better coverage for their customers, they'd create a low cost roaming agreement with T-Mobile and leave the respective systems alone.

        The remaining $19 Billion premium paid must then be the cost of eliminating competition or the cost of keeping sprint from expanding.

        Bingo! Give that man a cigar (of the non-exploding variety).

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