@jbtaylor on tech

Yesterday I saw a short story describing how 9 state agriculture commissioners had endorsed AT&T's bid to takeover T-Mobile. The story didn't mention how much campaign cash AT&T has given the group, so I tallied it up using online tools from the Center for Responsive Politics and the National Institute on Money in State Politics.

Turns out AT&T has showered the group with campaign cash -- $135,000 over their political careers. I should point out that three in the group are appointed by governors, so they've received no money from AT&T. (The governors who did the appointing have, but I didn't count that.)

So basically you've got 6 politicians who've gotten an average of $22,500 from AT&T. It should surprise no one the officials have endorsed AT&T's rural broadband myth.

And it is a myth.

1) AT&T has no plans to expand its existing footprint with 4G to cover areas not already covered by 3G. That means 50 percent of the land area of the U.S. will never be covered by AT&T. If you don't believe me, look up what AT&T's CEO told the House Judiciary Antitrust Subcommittee.

2) AT&T does not need to buy T-Mobile to bring 4G into rural America. They admitted to the FCC they could do it on their own for $3.8 billion -- a fraction of what they have offered Deutsche Telekom to takeover T-Mobile.

3) AT&T doesn't need any more spectrum to build out to rural America. In fact, they have more unused warehoused spectrum than any other wireless carrier in the country. Remember, Verizon, which has less spectrum and more customers than AT&T has committed to building out 4G to cover 98 percent of America. Does anyone seriously believe that AT&T will sit on its hands if the courts block the T-Mobile takeover?

p.s. Although, it's on this blog's home page, I'll repeat it here. This blog reflects my personal view and not those of my employer.

p.p.s. The Hereford cow pictured above is named Rose. She lives at the Smithsonian's National Zoo in Washington, D.C.

What's next with AT&T's bid to takeover T-Mobile?

At a scheduling conference on Sept. 21, Judge Huvelle set an expedited schedule for both the government's case against AT&T and Sprint's case against AT&T.

The next time AT&T goes to court will be on Oct. 24 in the Sprint case. AT&T has indicated that they plan to file a motion to dismiss Sprint's case against it, arguing that Sprint has no standing to sue. Sprint disagrees, of course.

To resolve the standing issue, the judge has ordered that AT&T file its motion to dismiss the Sprint suit by Sept. 30. Sprint must reply no later than Oct. 7. AT&T, in turn, must respond to Sprint's reply by Oct. 13. Oral arguments on whether or not to grant AT&T's motion to dismiss the Sprint suit will be held on Oct. 24.

Immediately following that proceeding, the judge will hold a status conference as part of the government's case against AT&T. Then, the judge will get an update on several pre-trial matters that AT&T and the Justice Department must agree on when it comes to evidence to be submitted at the trial.

As for the government's case, the lawyers for the Justice Department and AT&T will present oral arguments on Feb. 13 of next year.

Still before the court is a motion from Sprint asking the court to hear the Sprint case against AT&T and the government's case against the company in a coordinated proceeding. While Judge Huvelle didn't grant Sprint's motion in that regard, she didn't dismiss it either.

First Sprint must convince her to throw out AT&T's motion to dismiss Sprint's suit.

Separately, under questioning from Judge Huvelle, Justice Department lawyers indicated that it was possible more state Attorneys General could file suit against AT&T.

Just this week, a spokesperson for the Mississippi Attorney General indicated that her boss was still evaluating whether or not to join the Justice Department's lawsuit.

Once again, Sharis Pozen, the Justice Department's Acting Assistant Attorney General of the Antitrust Division sent a very clear message that the Department isn't playing games when it comes to its lawsuit seeking to block AT&T's proposed takeover of T-Mobile.

Today in an event at the Georgetown Law Center, Pozen said, "We have alleged that this transaction violates the law, and we are going forward and preparing for that lawsuit. I wouldn't call it a pre-emptive lawsuit of any kind."

"It is very much our standard course,” Pozen said. “When we determine a merger violates the laws we inform the parties and take action."

Not that AT&T is listening. AT&T CEO Randall Stephenson is reported to have told a Wall Street gathering today that the company still hopes to convince the Justice Department to settle the case.

But let's roll the tape back.

When Judge Huvelle issued her minute order with some very standard language inviting the parties to come to discuss a proposed trial schedule and "prospects for settlement", AT&T's PR team convinced media that a settlement would be discussed yesterday.

I was in the court room yesterday and the notion of a settlement was never discussed.

Not once.

Yet, AT&T is STILL trumpeting this illusive settlement offer. And media are STILL dutifully taking dictation rather than asking critical questions.

Folks, if there was going to be a settlement offer, we would have heard about it yesterday. AT&T should stop playing games and the media should call them on it.

Or alternatively, AT&T should start listening to the Justice Department.

I go back to what Pozen said earlier: "We don't file lawsuits to posture, we file them when there are violations of the law."

Got that, AT&T?

This afternoon, Cellular South, the country’s largest privately held wireless company, announced that it had filed an antitrust lawsuit against AT&T. The litigation asks the Court to block AT&T’s bid to takeover T-Mobile. Headquartered in Ridgeland, Mississippi, the company serves approximately 870,000 customers in Mississippi, Florida, Alabama, Georgia and Tennessee.

Vonya B. McCann, Sprint’s Senior Vice President of Government Affairs, issued the following statement to media:

“Today Cellular South stands with the U.S. Department of Justice, seven state Attorneys General and Sprint in asking the Courts to protect American consumers from the harms to competition, innovation, and pricing that likely would result if AT&T is allowed to takeover T-Mobile. As this growing chorus of opposition shows, this proposed transaction violates antitrust law and is not in the best interests of consumers and the American economy.”

The title for this blog post should actually be a little longer.

It should read: "The People of the United States of America, the State of New York, the State of Washington, the State of California, the State of Illinois, the Commonwealth of Massachusetts, the State of Ohio and the Commonwealth of Pennsylvania vs. AT&T, T-Mobile and Deutsche Telekom."

That's too much of a handful.

Of course, with yesterday's news that a bi-partisan group of seven state attorneys general have joined the Justice Department's lawsuit to block AT&T's takeover of T-Mobile, that's exactly what AT&T has -- a handful. In this case, it's a handful of legal obstacles to overcome.

When the news was announced yesterday by the Justice Department and in news releases from the various state attorneys general, AT&T still held out hope for settlement with DOJ and waved off the significance of the new suits filed by the states. Instead, AT&T pointed to a July letter signed by 11 other state Attorneys General who support the proposed transaction.

What AT&T isn't telling media is that not one of these attorneys general had conducted a legal investigation into the transaction before signing AT&T's letter endorsing the T-Mobile takeover. They just issued a statement of political support -- they weren't offering a legal opinion.

In July, when AT&T released this political letter of support, the Attorney General of Louisiana declined to sign the pro-AT&T letter, telling the Attorney Generals of Arkansas and Utah the following:

"We believe such action is premature at this time. We are carefully reviewing, inter alia, information gathered from other states and monitoring regulatory developments at the federal and state levels, particularly in the area of economic models used in the merger proposal. We believe such review and analysis is essential for a thorough analysis of the potential impact of the proposed merger on Louisiana consumers, businesses, price, competition and market conditions. We also need to carefully consider our regulatory role as well as legal and professional obligations under law and the rules of professional conduct, to avoid any potential conflict in our representation of the state and its various agencies and officials."

In other words, the Louisiana Attorney General declined to sign the pro-AT&T letter because the analysis of the proposed transaction was ongoing -- at this point in time, neither the Justice Department nor the states had filed suit.

But wait a minute, I can hear AT&T saying, Louisiana didn't file suit. In fact, 42 other state attorneys general didn't file suit.

That's true.

But the letter endorsing the transaction that AT&T is still touting today is one that was signed before any law enforcement investigation was completed.

And frankly, even if a state attorney general were to announce tomorrow that he or she had completed an investigation and had concluded that the transaction was competitive and wouldn't harm consumers, seven other state attorneys general disagreed and have filed suit in Federal Court. (Also, it's important to keep in mind that at least one state is supportive of the DOJ lawsuit, but it doesn't have the resources to join the fight. I imagine, given the tough budgets most states are facing, that more AGs are in this situation.)

In any case, the bottom line is now, AT&T has to contend with the U.S. Justice Department, seven states and Sprint.

Even if the DOJ were to agree to a settlement with AT&T, AT&T would still have to convince seven states and Sprint to settle. In evaluating any future settlement offer from AT&T, under antitrust guidelines, the DOJ must determine that the competition T-Mobile currently brings to the marketplace would be replaced by whatever offer AT&T makes.

In other words, if T-Mobile is going to be swallowed up by AT&T, AT&T must offer a new fourth national wireless carrier to take its place. Such a carrier must have the market power that T-Mobile has today. Does anyone seriously believe that's likely?

And speaking of Sprint, last night Sprint filed motions in Federal Court which request that Sprint's case against AT&T be considered in a coordinated proceeding with the Department of Justice's suit. The judge will consider Sprint's motions in her Sept. 21 hearing.

Despite media reports indicating that the scheduling hearing involves only the DOJ and AT&T, Sprint will be in court that day, too. (And Sprint's view of when a trial should be held differs from AT&T -- we agreed with the DOJ's proposed schedule.)

It should be an interesting day.

So what about the politics here? What will AT&T do next? I fully expect AT&T, given its vast network of political support of elected officials, to continue to announce more officials backing the proposed transaction. In almost every case, these officials are ones that have received thousands of dollars of AT&T, CWA and IBEW campaign cash over the years, so I largely discount that. Media should, too.

The fact is, it doesn't matter what political pressure AT&T applies. This matter is now in court and if AT&T thinks that the Justice Department, seven state Attorneys General and a U.S. District Court Judge will react to its political tactics, it's sadly mistaken and frankly extremely cynical.

In my personal view, this transaction is unlawful and must be stopped -- for the sake of consumers, for competition, for American jobs and for our country's economy.

And speaking of my personal views, this blog represents that -- my personal view not that of my employer. To learn more, please review my disclosures here.