Most Read: Business

DJIA
-0.17%
S&P 500
-0.28%
NASDAQ
-0.28%
 Last Update: 07:03 PM 09/30/2014

World Markets from      

 

Other Market Data from      

 

Key Rates from      

 

Blog Contributors

Timothy B. Lee

Timothy B. Lee

Timothy B. Lee covers technology policy, including copyright and patent law, telecom regulation, privacy, and free speech. He also writes about the economics of technology. He has previously written for Ars Technica and Forbes. You can follow him on Twitter or send him email.

Brian Fung

Brian Fung

Brian Fung covers technology for The Washington Post, focusing on electronic privacy, national security, digital politics and the Internet that binds it all together. He was previously the technology correspondent for National Journal and an associate editor at the Atlantic. His writing has also appeared in Foreign Policy, Talking Points Memo, the American Prospect and Nonprofit Quarterly. Follow Brian on Google+ .

Andrea Peterson

Andrea Peterson

Andrea Peterson covers technology policy for The Washington Post, with an emphasis on cybersecurity, consumer privacy, transparency, surveillance and open government. She also delves into the societal impacts of technology access and how innovation is intertwined with cultural development.

Post Tech
About / Where's Post I.T.?   |    Twitter  |   On Facebook  |  RSS RSS Feed  |  E-Mail Cecilia
Posted at 10:03 AM ET, 09/01/2011

AT&T will likely fight DOJ to the end, analysts say


AT&T and T-Mobile are fighting for a merger deal. (Seth Perlman and Roberto Pfeil - AP)
With the Justice Department’s filing to block the AT&T-T-Mobile merger now on the books, policy and Wall Street analysts are weighing in with early reads of the situation. The consensus seems to be that the fight’s just beginning — a good theory, as AT&T said almost immediately after the DOJ’s announcement that it will fight the lawsuit.

“AT&T has a lot of incentive to try to make this deal work, and not only because of the $3 billion breakup fee they committed to, but because T-Mobile’s worth is now fully apparent,” wrote Carl Howe of Yankee Group. “The fact that the DOJ is suing to block this merger demonstrates that T-Mobile plays an important role in ensuring competition in national GSM service in the U.S., and therefore may now be more valuable than they were before the merger.”

It’s not a good idea to count AT&T out of the fight for that reason, said Jeffery Silva of Medley Global Advisors, who said that with “the government's mixed record in merger litigation, the political sensitivities associated with the deal in advance of the 2012 presidential-election year and the curious earlier-than-expected action by DoJ, there’s a possibility litigation could be intertwined with negotiation that may yet result in a settlement/consent decree down the road.”

Still, the company faces an opponent that’s serious about blocking the deal, not merely using it as a bargaining tool, wrote David Kaut of the St. Louis-based investment group Stifel-Nicolaus, adding that he would be “astonished” if the FCC approved the merger while litigation is pending in the District Court.

One concern analysts raised is that this latest development could stagnate the industry as a whole. With AT&T’s acquisition in question, many analysts suggested other buyers for T-Mobile. Potential T-Mobile buyers looking at it for its spectrum, network and subscriber base include Google and Comcast, Howe speculated. And of course, many addressed the possibility that No. 3 carrier Sprint may try to grab T-Mobile.

But a Sprint deal would likely face similar concerns from the DOJ, said analysts at Bernstein Research in a note.

“A plain reading of the DoJ’s complaint makes it clear that a Sprint/T-Mobile pairing would be equally unacceptable. Sprint now regains a competitor (T-Mobile) forced to re-energize its competitiveness in Sprint’s core middle market,” the firm wrote, adding that Sprint may also now face stiffer competition for spectrum deals.

Related stories:

AT&T deal draws high-profile suit by Justice Department

AT&T to fight DOJ attempt to block T-Mobile merger

DOJ statement on suit to block merger

By  |  10:03 AM ET, 09/01/2011

Tags:  AT&T, T-Mobile, DOJ, FCC

 
Read what others are saying
     

    © 2011 The Washington Post Company