October 25, 2020

DealBook: Dish Network Makes $25.5 Billion Bid for Sprint Nextel

7:41 a.m. | Updated

The pay-TV operator Dish Network said on Monday that it had submitted a $25.5 billion bid for Sprint Nextel.

The move is an attempt to scupper the planned takeover of Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in the American cellphone operator in a complex deal worth about $20 billion.

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Dish Network thinks it can do better. Under the terms of its proposed bid, Dish Network said it was offering a cash-and-stock deal worth about 13 percent more than SoftBank’s bid.

Dish Network values its offer at $7 a share, including $4.76 in cash and the remainder in its shares.The offer is 12.5 percent above Sprint Nextel’s closing share price on Friday.

“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charles W. Ergen, Dish Network’s chairman.

Mr. Ergen said a “Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”

Sprint Nextel

The bid is the latest for the telecommunications industry, as many of the largest companies around the world look to expand through acquisitions.

As part of its offer, Dish Network said it would be able to combine its own existing broadband and TV offerings with Sprint Nextel’s cellphone operations. The proposed takeover would allow the newly united company to compete with rivals like Verizon that are moving into new areas in search of revenue.

As the No. 3 cellphone service provider, with 56 million subscribers nationwide, Sprint Nextel has struggled to catch up with larger rivals. It is expected to face even more competition as the parent company of T-Mobile USA moves closer to a multibillion-dollar agreement to buy MetroPCS.

Dish Network said it would finance the cash component of the takeover through a combination of $17.3 billion in cash and debt financing.

Barclays is advising Dish Network on its proposed bid. Deutsche Bank, the Raine Group and Mizuho Securities are advising SoftBank. Citigroup, Rothschild and UBS are advising Sprint Nextel.

Article source: http://dealbook.nytimes.com/2013/04/15/dish-network-makes-25-5-billion-bid-for-sprint-nextel/?partner=rss&emc=rss

T-Mobile Unveils Aggressive Phone Pricing With No Contracts

The company on Tuesday said the Apple iPhone 5 would be available starting April 12 for $100 up front, with customers paying an additional $20 a month for 24 months for the handset. Other new smartphones, like the Samsung Galaxy S IV and the BlackBerry Z10, will be available with similar payment plans.

Although there would be no contract binding customers to T-Mobile, the No. 4 American mobile carrier by market share, customers would have to pay off the balance they owe on their phone to end service before the two years are up.

Also Tuesday, T-Mobile formally replaced its old phone contracts with new plans that do not require signing a contract. For $50 a month, customers can get unlimited minutes, text messages and 500 megabytes of data; they can pay an extra $20 for unlimited data.

Over two years, the effective price for a smartphone and phone service would be hundreds of dollars less than it would on ATT or Verizon Wireless. At $580, it would also be cheaper than buying a $649 unlocked phone directly from Apple.

At those two carriers, the most popular phone plans cost upwards of $100 a month with a two-year contract for limited data. The iPhone 5 costs at least $199 on their networks with a two-year contract.

The simplified phone plans are part of T-Mobile’s new campaign to be the “un-carrier.” By moving to contract-free plans, it says it is doing away with charging customers fees for surpassing their data limits or terminating their service early.

John Legere, T-Mobile USA’s new chief executive, said that over two years, an iPhone on T-Mobile will cost $1,000 less than it would on ATT. He said moving toward contract-free plans would make the price that people pay more transparent and save them money over time.

“Do you have any idea what you’re paying?” Mr. Legere said at a press event in New York. “I’m going to explain how stupid we all are because once it becomes flat and transparent, there’s nowhere to hide. You pay so much for your phones, it’s incredible.”

Article source: http://www.nytimes.com/2013/03/27/technology/t-mobile-unveils-aggressive-phone-pricing-with-no-contracts.html?partner=rss&emc=rss

DealBook: With U.P.S. Deal, Europe Blocks Another Big Merger

European antitrust regulators proved again on Monday that they were more than willing to flex their considerable muscle.

U.P.S.‘s $6.9 billion bid for TNT Express is the latest merger blocked by the European Union, and certainly the most prominent since the proposed tie-up of NYSE Euronext and Deutsche Börse last year. In the case of U.P.S., European regulators argued that proposed asset sales, including airline operations, would not be enough to appease their concerns over the state of competitiveness in package delivery.

“We are extremely disappointed with the European Commission’s position,” the chief executive of U.P.S., D. Scott Davis, said in a statement. “We proposed significant and tangible remedies designed to address the European Commission’s concerns with the transaction.”

Other antitrust regulators have blocked mergers on antitrust grounds. For example, the Justice Department opposed ATT‘s proposed $39 billion bid for T-Mobile USA.

But the European Commission member who heads its antitrust unit, Joaquín Almunia, has displayed an aggressive approach that has rankled some deal makers.

Mr. Almunia has acknowledged those concerns, even as he has sought to rebut them. In a speech delivered in November, the commissioner argued that he was not trying to prevent European companies from growing. But he said he was trying to preserve a competitive market place.

“It is simply not true that the commission is putting the brakes on the legitimate efforts of Europe’s firms to scale up,” he said. “What we must avoid are attempts to shield Europe’s companies from competition, in particular during this harsh period for the economy. In this game, only a few of them will benefit, and the majority will lose.”

Among Mr. Almunia’s arguments was that the European Commission was less concerned about high levels of market share than what mergers might do to prices.

In the case of the NYSE Euronext merger, regulators demanded that the two exchange operators sell off significant parts of their businesses. Chief among the European Union’s concerns were the strong position that the two companies would have in the market for derivatives traded on exchanges, leading to a call for the sale of either NYSE Euronext’s Liffe platform or Deutsche Börse’s Eurex unit.

Both companies protested, arguing that the European Union’s view of the market was too limited and did not take into account the broader market for derivatives traded off exchanges. The market operators eventually decided to call off their deal, believing that there was little hope for reversing regulators’ opinion.

Other deals have passed review, but some have required significant changes. In approving Universal Music Group’s takeover of EMI Music last year, for example, European regulators required the sale of a third of EMI’s assets. The decision has led to the auction of music labels like Parlaphone, the home to groups like Coldplay and David Guetta.


This post has been revised to reflect the following correction:

Correction: January 14, 2013

An earlier version of this post misstated Mr. Almunia’s position at the European Commission. He is the commissioner for competition, its antitrust unit; he is not the leader of the European Commission.

Article source: http://dealbook.nytimes.com/2013/01/14/with-u-p-s-deal-european-antitrust-regulators-block-another-big-merger/?partner=rss&emc=rss

Cellphone Users Steaming at Hit-or-Miss Service

On Friday, four days after Hurricane Sandy, the major carriers — ATT, Verizon Wireless, T-Mobile USA and Sprint — were still busily rebuilding their networks in the hardest-hit areas.

One-quarter of the cell towers in the storm zone were knocked out, according to the Federal Communications Commission. Many had no power, and their backup battery systems soon drained. The lines connecting those towers to the rest of the phone network were ripped out. Carriers deployed generators to provide power, but eventually those required more fuel — another limited resource.

In an emergency, a lack of cellphone reception can be dangerous, especially as more people have chosen to snip landlines out of their budgets. About 60 percent of American households have landlines, down from 78 percent four years ago, according to Chetan Sharma, an independent mobile analyst.

The carriers say they are trying their best to deal with an unusual disaster. But in the past, they have steadfastly objected to recommendations from regulators that they spend more money on robust emergency equipment, like longer-lasting backup batteries.

Neville Ray, chief technology officer of T-Mobile USA, said Hurricane Sandy was the biggest natural disaster he had ever dealt with and that service failures were inevitable.

“There’s an amount of preparation you can do, but depending on the size and scale and impact of the storm, it’s tough to anticipate every circumstance,” Mr. Ray said in an interview. “No degree of preparation can prevent some of those outages from happening.”

When networks fail, carriers deploy trucks, called C.O.W.’s, for cell on wheels, that act as temporary cell towers. But the companies say the challenge with deploying these trucks poststorm is connecting to power and to the wider phone network, which requires a microwave radio link to a working tower. Because of the density of the buildings in New York City, the trucks could serve only a small area, according to Mr. Ray.

The carriers have made other efforts to provide services while restoring their networks. ATT wheeled out R.V.’s where customers could charge their phones. And it made an agreement to share networks with T-Mobile USA in the affected areas of New York and New Jersey. When customers of both companies place calls, they are carried by whichever network is available in the area.

But ultimately all of the carriers’ preparations and responses were not enough to get services running again in a hurry. Over the week the carriers reported gradual progress, and they declined to offer timelines indicating when customers could expect to have service again.

The unreliability of wireless networks may point to a bigger problem. Over the years, the phone companies have fought off regulators who want to treat them as utilities, arguing that if they are going to stay innovative, they cannot be burdened with the old rules that phone companies dealt with in the landline era. But as a consequence, there are almost no rules about what carriers have to do in an emergency, said Harold Feld, senior vice president for Public Knowledge, a nonprofit that focuses on information policy.

“With the new networks we’ve prized keeping costs down, we’ve prized flexibility and we’ve prized innovation,” said Mr. Feld, who wrote a blog post on Monday anticipating cell tower problems. “But we have not put stability as a value when we have been pushing to have these networks built out.”

Mr. Feld noted that after Hurricane Katrina in 2005, the F.C.C. recommended that carriers install backup batteries on their transmission towers that would last 24 hours, among other measures. But the carriers objected, presumably because they did not want to spend the money, he said. (Of course, 24 hours would not have been enough in many areas hit by the latest storm.)

In general, the carriers say it is in their own interest to fortify their networks for emergency situations, but Mr. Feld said this incentive was not enough.

“We ought to actually be doing this in the mind-set that there need to be actual rules, so that everybody knows how to behave when the crisis hits,” he said. “When I drive I have the best incentive in the world not to hit a telephone pole and not to slam into another car. But I still need speed limits, stop signs and stop lights.”

Debra Lewis, a spokeswoman for Verizon Wireless, said no amount of rules could have prepared carriers for the outcome of a storm like Hurricane Sandy.

“The fact is, regulation cannot anticipate the varied challenges that can arise in such situations, but we do learn from them and adapt accordingly to ensure we meet consumers’ needs,” Ms. Lewis said. She said the company prepared for natural disasters with generators and batteries that provided at least eight hours of power to cell sites.

Verizon Wireless said Friday evening that less than 3 percent of its network in the Northeast was still down. “In severely impacted areas, such as Lower Manhattan, while wireless service has yet to return to normal levels, coverage is good,” it said.

ATT was the only major carrier that would not go into specifics about how much of its network was down. Anecdotally it seemed that in Manhattan at least, ATT’s coverage was not as good as Verizon’s after the storm. One Twitter user directed this message at ATT on Tuesday: “I live in lower manhattan. Vz has service u do not. You are ruining lives. I had to come midtown 2 call mom. Switching.”

Mark Siegel, a spokesman for ATT, said the company would not comment because it was working on restoring its network.

Article source: http://www.nytimes.com/2012/11/03/technology/cellphone-users-steaming-at-hit-or-miss-service.html?partner=rss&emc=rss

DealBook: Sprint Says It Is in Negotiations With SoftBank of Japan

9:47 p.m. | Updated

Two giants overwhelmingly dominate the wireless market in the United States. Now a merger deal is in the works that could produce a robust challenger.

Sprint Nextel said Thursday that it was in discussions with SoftBank over a “potential substantial investment.” The talks, which began this summer, center on SoftBank, a Japanese telecommunications company, paying $12.5 billion for a stake of about 70 percent in Sprint, according to a person briefed on the matter who was not authorized to speak publicly. The talks emerged just a week after Deutsche Telekom, the parent of T-Mobile USA, announced a reverse takeover of another smaller company in cellphone service, MetroPCS. The spate of deal-making is aimed at shifting the balance of power in a United States market largely controlled by Verizon Wireless and ATT. They have more than 200 million customers — more than their next six competitors combined.

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As the No. 3 cellphone service provider, Sprint, with more than 56 million subscribers, has long struggled to catch up. In recent years, it has sought to compete primarily on price. But the T-Mobile-MetroPCS merger could create a tougher competitor in the lower end of the cellphone market.

Sprint Nextel
Softbank

While Sprint has committed billions of dollars to revamping its infrastructure, hoping to develop a Long Term Evolution high-speed network, it has been constrained by limited financial resources. Sprint carried nearly $21 billion in long-term debt as of June 30, and it has lost money every year since 2007.

A deal with SoftBank would promise to provide Sprint with substantial financial power. SoftBank, one of Japan’s largest cellphone service providers, could supply additional resources for Sprint to develop its next-generation network.

The combined company could subsequently consider other deals, possibly including a takeover of Clearwire, a wireless services provider of which Sprint owns a significant stake. Shares of Clearwire jumped nearly 71 percent Thursday on that prospect. And a stronger Sprint could make a run at a merged MetroPCS-T-Mobile. Sprint nearly acquired MetroPCS this year, but its board vetoed the deal as too expensive.

The person briefed on the matter said Thursday that SoftBank and Sprint are focused on their own deal now.

Buying Sprint would give SoftBank an entry into the American market, one of the largest and most profitable in the world.

Chetan Sharma, an independent telecommunications analyst, said a deal between Sprint and SoftBank would probably give SoftBank control over the broad direction of Sprint. SoftBank could influence how Sprint deploys network upgrades or adds services for customers, he said. But a deal would not necessarily accelerate Sprint’s deployment of L.T.E., the fourth-generation cellular network, because Sprint is already on track to expand its newer network aggressively by the end of 2013, Mr. Sharma said.

The more likely result that Sprint customers can expect is new services. Japanese and South Korean carriers are leading the way with innovative mobile services, he said, including mobile payments and analytics that look at a customer’s personal data to provide better map directions or recommendations for things to buy. Such services could open doors to new methods of mobile advertising for Sprint, he said.

“Things that Google and Apple are trying to do here, operators are doing in those countries,” Mr. Sharma said.

A representative of SoftBank was not available for comment.

With a brief statement on Thursday, Sprint confirmed the talks, which had been reported by the Nikkei newspaper of Japan. “Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint,” the statement said.

Shares of Sprint surged more than 14 percent in heavy trading Thursday. But SoftBank’s shares fell more than 15 percent in early trading in Tokyo on Friday.

Under the current outlines of the deal, Sprint would first issue new shares to SoftBank. That would be followed by a tender offer for Sprint’s shares, until the Japanese company reached its 70 percent target holding.

SoftBank is still lining up financing from banks, and any deal is not expected to be announced for several days at least, the person briefed on the matter said.

In pursuing Sprint, SoftBank may see an opportunity to again reshape a country’s cellphone market. The company, founded by the Internet entrepreneur Masayoshi Son, moved into wireless service in 2006 when it acquired Vodafone’s operations in Japan, putting it behind two bigger and more established rivals.

Through a combination of offering attractive devices like the iPhone and faster data networks, as well as by acquisitions, it climbed up the ranks of the Japanese market. Craig Moffett, an analyst with Sanford C. Bernstein, said it was too early to draw conclusions about the meaning of a deal between Sprint and SoftBank. He said a majority investment from SoftBank would just be an effort to scoop up spectrum, the radio waves that carry wireless services, as if it were real estate. Still, it made little sense, he said.

“There are no synergies whatsoever in a Japanese company buying a U.S. telecom operator,” he said. “This is tantamount to Japanese buyers buying Rockefeller Center.”

Article source: http://dealbook.nytimes.com/2012/10/11/softbank-of-japan-said-to-near-a-deal-for-control-of-sprint/?partner=rss&emc=rss

Business Briefing | Telecommunications: U.S. Seeks Withdrawal of AT&T Antitrust Case

The Justice Department said Friday that it wanted to withdraw or postpone its antitrust case against the proposed acquisition of T-Mobile USA by ATT now that the two companies no longer had a valid application to approve the deal. The companies took back their application with the Federal Communications Commission two weeks ago after the commission’s chairman came out against the $39 billion deal. The companies have said they will seek approval from a federal judge, who has scheduled a February trial on the Justice Department’s case, and will file another F.C.C. application later. A deputy assistant attorney general, Joseph Wayland, told Judge Ellen Segal Huvelle of Federal District Court that the government planned to file a motion next week to put off the case. Judge Huvelle gave the government until Tuesday to do so and scheduled a hearing for Thursday on the matter.

Article source: http://feeds.nytimes.com/click.phdo?i=c3fcf927480815241dc22e9e1c8c7f10

Stocks & Bonds: Indexes End the Day Up, but Down for the Month

Capping a period characterized by wild swings of hundreds of points, all three major indexes finished the month lower, despite rising for the day.

On Wednesday, shares shifted between gains and declines, running from flat to more than 1 percent, in a market weighed down by news that the Justice Department would seek to block ATT’s proposed acquisition of T-Mobile USA.

Shares shot up after the opening, but the ATT news dragged down the telecommunications sector. Then the three main indexes lost steam after a Federal Reserve official said that policy adjustments were not justified now.

In the last half hour, a bounce sent the Dow Jones industrial average above its starting point for 2011, but there was still not enough momentum to finish the month higher.

The Dow was up 53.58 points, or 0.46 percent, to 11,613.53 at the close, just above its 2011 start of 11,577.51. It was down more than 4 percent for the month. The Standard Poor’s 500-stock index was up 5.97 points, or 0.49 percent, to 1,218.89, but down more than 5 percent for the month.

The Nasdaq composite index rose 3.35 points, or 0.13 percent, to 2,579.46. It closed down more than 6 percent for August.

ATT was the second-most actively traded stock in the telecommunications sector, behind Sprint. It fell 3.85 percent, to $28.48. Its rival Sprint Nextel was up nearly 6 percent to $3.76.

August was punctuated by volatility in the broader markets, as choppy economic data renewed discussions about whether the economy was headed for another recession. Concerns about euro zone debt, fiscal uncertainty in the United States and the potential for further economic stimulus from the Federal Reserve also affected market sentiment.

Those issues persisted this week when the Fed released minutes from its Aug. 9 meeting, where its policy makers considered changing the size or composition of the Fed’s balance sheet or reducing the interest rate paid on banks’ excess reserve balances.

Fed policy makers have agreed to consider other options at their next meeting in September. Some analysts said the Fed might need more information before deciding on further stimulus.

On Wednesday, Dennis P. Lockhart, the president of the Federal Reserve Bank of Atlanta, appeared to tamp down the prospect.

“We may find, as economic circumstances evolve, that policy adjustments are required,” Mr. Lockhart said in speech to the Chamber of Commerce in Lafayette, La. “In more adverse scenarios, further policy accommodation might be called for. But as of today, I am comfortable with the current stance of policy, especially considering the tensions policy must navigate between the short and long term and between recovery and the need for longer-term structural adjustments.”

The Treasury’s benchmark 10-year note fell 17/32 to 99 1/32, pushing the yield to 2.23 percent, up from 2.18 percent late Tuesday.

Mark T. Lamkin, the chief executive officer of Lamkin Wealth Management, said the late-day swoon in shares could be attributed to short-term technical profit-taking, before the release of the national jobs report for August on Friday. It could also be a reaction to Mr. Lockhart’s remarks, he said.

Britain’s FTSE 100 gained 2.4 percent, and Germany’s DAX gained 2.5 percent. In Paris, the CAC 40 rose 3.1 percent. Asian markets were broadly higher on Wednesday.

On Wednesday, new data on factory orders and jobs set up a rise in shares that carried over from markets in Asia and Europe.

The Commerce Department showed that factory orders for July rose 2.4 percent, the largest increase since March. Demand for automobiles and commercial airplanes propelled the orders.

A report on employment from ADP Employer Services showed new jobs on private payrolls totaled 91,000 for August, below forecasts.

Those reports were made public before the release Friday of one of the most closely watched indicators, the Labor Department’s national report on the job situation. Analysts were forecasting a gain of 70,000 in new nonfarm payroll jobs for August, compared with 117,000 the previous month, while the unemployment rate of 9.1 percent was not expected to change, according to a survey by Bloomberg News.

“We are still not seeing job losses, which is what you would see in a recession,” said Anthony G. Valeri, a senior vice president and market strategist for LPL Financial.

Goldman Sachs economists said that the ADP report, which is used to help estimate the outcome of the national report, could mean lower forecasts for Friday’s numbers.

Article source: http://feeds.nytimes.com/click.phdo?i=9017821925f27179688c6b506c049c9a

Indexes End the Day Up, but Down for the Month

Capping a period characterized by wild swings of hundreds of points, all three major indexes finished the month lower, despite rising for the day.

On Wednesday, shares shifted between gains and declines, running from flat to more than 1 percent, in a market weighed down by news that the Justice Department would seek to block ATT’s proposed acquisition of T-Mobile USA.

Shares shot up after the opening, but the ATT news dragged down the telecommunications sector. Then the three main indexes lost steam after a Federal Reserve official said that policy adjustments were not justified now.

In the last half hour, a bounce sent the Dow Jones industrial average above its starting point for 2011, but there was still not enough momentum to finish the month higher.

The Dow was up 53.58 points, or 0.46 percent, to 11,613.53 at the close, just above its 2011 start of 11,577.51. It was down more than 4 percent for the month. The Standard Poor’s 500-stock index was up 5.97 points, or 0.49 percent, to 1,218.89, but down more than 5 percent for the month.

The Nasdaq composite index rose 3.35 points, or 0.13 percent, to 2,579.46. It closed down more than 6 percent for August.

ATT was the second-most actively traded stock in the telecommunications sector, behind Sprint. It fell 3.85 percent, to $28.48. Its rival Sprint Nextel was up nearly 6 percent to $3.76.

August was punctuated by volatility in the broader markets, as choppy economic data renewed discussions about whether the economy was headed for another recession. Concerns about euro zone debt, fiscal uncertainty in the United States and the potential for further economic stimulus from the Federal Reserve also affected market sentiment.

Those issues persisted this week when the Fed released minutes from its Aug. 9 meeting, where its policy makers considered changing the size or composition of the Fed’s balance sheet or reducing the interest rate paid on banks’ excess reserve balances.

Fed policy makers have agreed to consider other options at their next meeting in September. Some analysts said the Fed might need more information before deciding on further stimulus.

On Wednesday, Dennis P. Lockhart, the president of the Federal Reserve Bank of Atlanta, appeared to tamp down the prospect.

“We may find, as economic circumstances evolve, that policy adjustments are required,” Mr. Lockhart said in speech to the Chamber of Commerce in Lafayette, La. “In more adverse scenarios, further policy accommodation might be called for. But as of today, I am comfortable with the current stance of policy, especially considering the tensions policy must navigate between the short and long term and between recovery and the need for longer-term structural adjustments.”

The Treasury’s benchmark 10-year note fell 17/32 to 99 1/32, pushing the yield to 2.23 percent, up from 2.18 percent late Tuesday.

Mark T. Lamkin, the chief executive officer of Lamkin Wealth Management, said the late-day swoon in shares could be attributed to short-term technical profit-taking, before the release of the national jobs report for August on Friday. It could also be a reaction to Mr. Lockhart’s remarks, he said.

Britain’s FTSE 100 gained 2.4 percent, and Germany’s DAX gained 2.5 percent. In Paris, the CAC 40 rose 3.1 percent. Asian markets were broadly higher on Wednesday.

On Wednesday, new data on factory orders and jobs set up a rise in shares that carried over from markets in Asia and Europe.

The Commerce Department showed that factory orders for July rose 2.4 percent, the largest increase since March. Demand for automobiles and commercial airplanes propelled the orders.

A report on employment from ADP Employer Services showed new jobs on private payrolls totaled 91,000 for August, below forecasts.

Those reports were made public before the release Friday of one of the most closely watched indicators, the Labor Department’s national report on the job situation. Analysts were forecasting a gain of 70,000 in new nonfarm payroll jobs for August, compared with 117,000 the previous month, while the unemployment rate of 9.1 percent was not expected to change, according to a survey by Bloomberg News.

“We are still not seeing job losses, which is what you would see in a recession,” said Anthony G. Valeri, a senior vice president and market strategist for LPL Financial.

Goldman Sachs economists said that the ADP report, which is used to help estimate the outcome of the national report, could mean lower forecasts for Friday’s numbers.

Article source: http://feeds.nytimes.com/click.phdo?i=ed77311c76998c66dd157a38b2cfbb21

Key Senator Opposes AT&T Purchase of T-Mobile

WASHINGTON (AP) — A key member of the Senate Judiciary Committee is calling on federal regulators to block ATT’s proposed $39 billion purchase of T-Mobile USA.

Herb Kohl, D-Wis., chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said the transaction would lead to higher prices and fewer choices for consumers because it would leave just three national wireless carriers.

Two of those carriers — ATT Inc. and Verizon Wireless — would control nearly 80 percent of the market, Kohl noted. And there is “considerable doubt” about whether the third national carrier, Sprint Nextel, could survive as an independent competitor should the deal go through, he said.

“We cannot turn a blind eye to the dangerous possibility that this acquisition could ultimately result in a duopoly in the national cell phone market,” Kohl said in a letter sent to the Justice Department and the Federal Communication Commission Wednesday.

Kohl added that by eliminating T-Mobile USA, the fourth-largest wireless carrier, the merger would remove the one carrier offering less expensive prices and rate plans.

“Removal of such a maverick price competitor from such a highly concentrated market — a competitor that disciplines price increases from all three other national cell phone competitors, not only ATT — raises a substantial likelihood that prices will rise following this merger,” he said.

ATT, the nation’s second-largest wireless carrier, is seeking federal approval to acquire T-Mobile from Germany’s Deutsche Telekom AG. The cash-and-stock deal would catapult ATT past Verizon Wireless to become the biggest cellphone company in the country, and leave Sprint as a distant number three. Although the Justice Department and the FCC will ultimately decide whether to let the transaction to proceed, Kohl’s input is influential because he heads the Senate subcommittee that handles antitrust matters.

ATT said in a statement that Kohl’s view is “inconsistent with antitrust law, is shared by few others and ignores the many positive benefits and numerous supporters of the transaction.”

ATT and T-Mobile argue that the merger would lead to fewer dropped and blocked calls and faster mobile Internet connections for subscribers by allowing the companies to combine their limited wireless spectrum holdings at a time when both are running out of airwaves to handle mobile apps, online video and other bandwidth-hungry services.

They also say the deal would position ATT to cover more than 97 percent of the U.S. population with its new high-speed, fourth-generation wireless service.

Article source: http://feeds.nytimes.com/click.phdo?i=1ce3ad7e3933ea817c6b63e0332854d6