Heartland Institute Tech, Antitrust Experts React to Collapse of AT&T/T-Mobile Merger

December 20, 2011

AT&T announced Monday it had abandoned its plan to acquire T-Mobile for $39 billion, citing push-back from the U.S. Department of Justice and the Federal Communications Commission for killing the deal. AT&T had hoped to use T-Mobile’s spectrum to expand its services to current and future customers.

The following statements from technology and antitrust experts at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at tnash@heartland.org and 312/377-4000. After regular business hours, contact Jim Lakely at jlakely@heartland.org and 312/731-9364.


“The meddling and foot-dragging of the FCC and the Justice Department have killed a deal that would have seen AT&T invest $8 billion to bring wireless broadband to rural areas. Last I checked, that was a stated goal of the Obama administration, part of the $7.4 billion ‘broadband stimulus’ the president signed in 2009.

“It is clear now, however, that the administration is not chiefly interested in fostering private investment in the technology sector. It is interested in exercising power to centrally plan the industry from Washington – regardless of how unqualified federal bureaucrats are for the task.

“AT&T is taking a $4 billion bath on this deal, but consumers are the biggest losers. They continue to miss out on better and faster service because the federal government keeps getting in the way of a free market trying to bring us the newest marvels of the technological age.”

Jim Lakely
Co-Director, Center on the Digital Economy
The Heartland Institute
jlakely@heartland.org
312/377-4000


“AT&T taking a $4 billion hit to drop its bid to acquire T-Mobile is disappointing, but not surprising. From the moment the potential deal was announced last spring, plans to scuttle it also were announced by government regulators seemingly overcome by the vapors caused by businesses conducting everyday affairs unfettered.

“Yet, T-Mobile’s parent company will push forward to find a buyer for its national carrier – so the only purpose government intervention served was determining any other company but AT&T will eventually purchase T-Mobile, without granting AT&T the opportunity to fully make its case.”

Bruce Edward Walker
Managing Editor, InfoTech & Telecom News
The Heartland Institute
bwalker@heartland.org
989/430-5557


“The Justice Department called this a ‘victory for consumers’ and, as reported by the Wall Street Journal, kept a fourth strong competitor – T- Mobile – in the national market. This is pure fallacy.

“One way or the other, T-Mobile is going out of business. Its parent company says it’s losing money and can’t stay in the U.S. market. It’s not building a next-generation high-speed transmission network. It doesn’t sell iPhones. T-Mobile is doomed. So are its customers, who will be harmed, not helped, by the federal action.

“AT&T customers will also be harmed, since AT&T believed call quality would have been improved by access to T-Mobile’s towers.

“All in all, consumers got a lump of coal. Merry Christmas, America.”

Maureen Martin
Senior Fellow for Legal Affairs
The Heartland Institute
mmartin@heartland.org
920/295-6032


The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.