Perry-backed telecom merger blocked by DOJ for being anti-competitive
Image has not been found. URL: http://images.americanindependent.com/c7d3fb7929Thumb1.jpg.jpgOn Wednesday, the Department of Justice moved to block the proposed $39 billion takeover of mobile carrier T-Mobile by telecom giant AT&T, arguing the merger would violate anti-trust laws and would diminish price, quality, and innovation, Bloomberg News reported.
The federal suit seeks a court order halting the deal, calling the mega-merger anti-competitive. “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” the U.S. filing read. The merger would create the largest U.S. cellphone carrier in an already concentrated national market.
“Any way you look at this transaction, it’s anti-competitive,” Sharis Pozen, the acting assistant attorney general in charge of DOJ’s antitrust unit, told Politico. FCC Chairman Julius Genachowski echoed apprehension about the merger’s economic consequences, saying, “although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition.”
The opinions expressed by the DOJ stand in contrast to Gov. Rick Perry’s ongoing support for the acquisition by the Dallas-based company. In a May letter to the FCC, Perry says light regulation is key to competition, and calls for the federal government’s “swift approval” of the merger, to “send a strong signal to employers, consumers and states” that the federal government is serious about American technology.
Perry and other Texas Congressmen have been promoting the deal for months, citing job growth as a factor (a claim refuted by industry experts and lawmakers) and earlier Wednesday, AT&T said the merger would bring 5,000 outsourced call center jobs to the U.S.
As the Texas Independent previously reported, the merger would likely result in the loss of hundreds of call center jobs in South Texas minority communities like Brownsville, which already face high unemployment numbers. Now, AT&T says it doesn’t expect any job losses for call center workers.
AT&T was the top contributor to federal campaigns from 1990-2010, donating more than $45 million to candidates from both parties and spending more than $140 million on lobbying in the last 14 years alone, according to media reform group Free Press. As the Texas Independent has reported, this state is no exception — since 2002, AT&T doled out $692,195 in donations to Perry; $75,000 to merger supporter U.S. Rep. Gene Green (D-Texas) since 1997; $69,800 to U.S. House Judiciary Committee Chairman Lamar Smith (R-Texas). Smith penned a letter to the FCC and DOJ, asking them “to carefully weigh the evidence” against the merger.
A handful of Texas lawmakers were among House Democrats who added their signatures to the letter advocating the merger, and received nearly $500,000 from AT&T.
Several media activist groups including Free Press, the Center for Media Justice, the Media Access Project and Public Knowledge fought hard against the merger, calling it a blow the public interest and the economy. Seen as a victory, the DOJ ruling comes after mounting calls, letters and research debunking AT&T’s claims by media activists.
“Blocking this merger is a major victory for the public interest,” said Free Press President and CEO Craig Aaron in a statement. “The Justice Department clearly based its decision on the facts, and, as Free Press has argued from the start, the overwhelming evidence shows that this merger would lead to higher prices and fewer choices for consumers, and massive job cuts.”
“Surprised and disappointed” by the DOJ decision, AT&T is expected to fight the ruling in court.
“AT&T has already invested untold millions in lobbying and campaign contributions, and it is going to play every card in the deck to try to get this merger done,” said Aaron.