“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
WASHINGTON (AP) — The Obama administration has explained its
effort to block AT&T’s purchase of T-Mobile USA by saying it
will fight mergers that would reduce competition and hurt
consumers.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Yet few think the lawsuit the administration filed Wednesday
signals a more aggressive stance toward acquisitions in other
industries. Rather, experts say, the administration’s challenge of
AT&T’s purchase comes down to this: Telecom is dominated by
just a few big companies. Reducing the number of major players
could all but kill competition and drive prices up.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
By contrast, few other major industries are controlled by just a
handful of giants. And none relies on access to a limited number of
public airwaves.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
With previous big mergers, the administration has taken a
middle-ground approach to antitrust: It’s green-lighted deals such
as cable company Comcast’s acquisition of media giant NBC Universal
and Ticketmaster’s merger with concert promoter Live Nation. But it
also imposed conditions in those deals that are intended to
preserve competition.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“They’re looking even at very big mergers on their merits, and if
the merging parties can’t satisfy their concerns, the Justice
Department will say, `We can’t let this go through,'” said Melissa
Maxman, an antitrust attorney with the law firm Cozen
O’Connor.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
AT&T says it will fight the court action. But it also plans to
meet with Justice lawyers and offer more concessions in hopes of
avoiding a court battle, according to a person familiar with the
matter who spoke on condition of anonymity because of the
confidential nature of the talks.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
President Barack Obama, on the campaign trail, had pledged tougher
antitrust policy. And early in his administration, the Justice
Department repealed Bush-era guidelines that had discouraged
government action against companies with near
monopolies.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
As a result, many had expected bold action from the department –
crackdowns on industry-dominating companies and roadblocks to many
big mergers.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
That didn’t happen. The lawsuit against AT&T might satisfy some
critics who hoped for a much tougher antitrust policy. But it
probably doesn’t suggest a policy shift.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The AT&T proposal was unique, said Benjamin Brown, a former
Justice Department antitrust lawyer, now a partner with the law
firm Cohen Milstein.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“I could very easily have seen this same decision being made under
the Bush administration,” Brown said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
He said there was little evidence for AT&T’s claim that
regional cellphone carriers can compete with the four national
companies: AT&T, Verizon, T-Mobile and Sprint.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
If AT&T bought T-Mobile, just three national players would be
left. And Sprint could have trouble competing with two bigger
behemoths. So it might be acquired, too, further shrinking
competition.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“Any time you take four major parties and turn it into three, the
Justice Department is going to take a close look,” Maxman
said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Telecom mergers attract more scrutiny in part because it’s next to
impossible for new competitors to emerge. Companies need permission
to transmit data on public airwaves. The licenses are costly and
scarce. And the cost of building a new system of cell towers and
satellites is enormous.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“You can’t just pull a bunch of capital together and launch a
national cellphone provider, Brown said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The Obama Justice Department has allowed several big mergers to
proceed without court action. But it made the companies sell or
change parts of their businesses.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
For instance, in the Live Nation-Ticketmaster merger, regulators
required Ticketmaster to license its software to a competitor. It
also forced it to sell a subsidiary that handles tens of millions
of tickets a year.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
In January, when the nation’s largest cable-TV company, Comcast,
took control of NBC Universal, the government forced Comcast to
make the full suite of NBC Universal content available as a single
package to online competitors. And Comcast had to do so on terms
comparable to those reached with more established rivals such as
Dish Network Corp. and DirecTV.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The Federal Communications Commission, which can block telecom
mergers, joined Justice in making those demands.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
In April, Google Inc. won government clearance for its $700 million
purchase of airline fare tracker ITA Software. The deal gave Google
a key role in online travel.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
But to win Justice Department clearance, Google agreed to license
ITA’s software to other companies through 2016. And it agreed to
continue to invest in research and development of products, which
it would also have to license.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Those deals are likely templates for future merger reviews by
Justice, experts said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“Firms got signals from the earlier deals that were approved that
if they were willing to make sufficient (compromises), deals on the
borderline might get approved,” said Spencer Waller, a professor at
Loyola University Chicago’s School of Law and director of the
school’s Institute for Consumer Antitrust Studies.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
That’s the lesson AT&T appears to have taken by planning to
meet with government lawyers and possibly offer further
concessions.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The lawsuit against AT&T “shows that each case is treated on
its own merits,” said Art Brodsky, a spokesman for Public
Knowledge, a digital-rights advocacy group that applauded the
Justice Department’s move.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“You don’t want them to approve any deal, any more than you want
them to approve every deal,” Brodsky said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“text-decoration: none; color: #000066;” rel=”item-license” name=
“4c94f4a0-9c07-4625-8e75-888d36711081” href=
“http://hosted.ap.org/dynamic/stories/U/US_ATT_FUTURE_MERGERS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-09-02-11-53-54#4c94f4a0-9c07-4625-8e75-888d36711081″> © 2011 The
Associated Press may not be published, broadcast, rewritten or
redistributed. “http://hosted2.ap.org/APDEFAULT/privacy”>Privacy
Policy
