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AT&T gives U.S. regulators a reason to block Softbank-Sprint deal

Posted: , by Alan F.

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AT&T gives U.S. regulators a reason to block Softbank-Sprint deal
For SprintCEO Dan Hesse, the shoe is on the other foot

For SprintCEO Dan Hesse, the shoe is on the other foot

When AT&T was trying to buy T-Mobile, one of the loudest opponents of the deal was Sprint. The nation's third largest carrier was happy when AT&T decided to give up on the proposed $39 billion deal. Now that the shoe is on the other foot, and it is Sprint on the receiving end of a $20.1 billion bid from Japan's Softbank, it is none other than AT&T making comments about Softbank's 70% purchase of Sprint with a rather loaded three sentence statement. Payback? Revenge?

While AT&T isn't coming right out and saying it objects, the statement is basically a blueprint for the regulatory agencies, giving them a huge reason to block the acquisition. In the statement, AT&T discusses how Softbank, a foreign company, would own more spectrum than any U.S. carrier once the deal closes. AT&T says that it expects that fact to lead to a thorough examination by the agencies. Both U.S. and Japanese telecom regulators will have to sign off on the deal and it will be interesting to see if the DOJ and the FCC play just as hard with Sprint as they did with the proposed purchase of T-Mobile by AT&T. And don't forget, there is also the T-Mobile/MetroPCS reverse merger that will still need approval from the Feds.

"Softbank’s acquisition of Sprint and the control it gains over Clearwire will give one of Japan’s largest wireless companies control of significantly more U.S. wireless spectrum than any other company. We expect that fact and others will be fully explored in the regulatory review process. This is one more example of a very dynamic and competitive U.S. wireless marketplace, which is an important fact for U.S. regulators to recognize." – Brad Burns, AT&T vice president

source: SlashGear

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posted on 18 Oct 2012, 16:23 8

1. android_sucks (Posts: 111; Member since: 28 Jul 2011)


posted on 18 Oct 2012, 22:45 3

40. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

More like sour grapes on the part of AT&T.... Softbank's purchase of Sprint doesn't consolidate the competitive landscape like AT&T's purchase of T-Mo would have. Sprint has basically re-capitalized. The source of funds is Japan, not China. The U.S. has a mutual defense treaty agreement with Japan.

As I said at the top of my post - it is sour grapes on AT&T's part.

posted on 18 Oct 2012, 23:28 2

42. bigdawg23 (Posts: 462; Member since: 25 May 2011)

Its called business. Any company that is in it for making their business successful will block a competitor when possible. AT&T is just returning the favor to Sprint.

posted on 18 Oct 2012, 16:30

2. theoak (Posts: 324; Member since: 16 Nov 2011)

Considering too that Sprint just got back majority of CLEAR ... Sprint is sitting on a lot of spectrum. Sprint is just not using it :(

posted on 18 Oct 2012, 16:43 6

9. lsutigers (Posts: 821; Member since: 08 Mar 2009)

They don't really need to right now. Once Nextel's 800mhz spectrum is refarmed for LTE and they go VoLTE Sprint will consolidate a lot of it's unused or inefficient spectrum and be able to sell some of it or use it for expansion. Also, with Clear deploying 20x20mhz carriers of TD-LTE, signal penetration will not be the issue it was with WiMAX and Clear's LTE will be the fastest in the US.

posted on 18 Oct 2012, 17:31 2

19. letgomyeggroll (Posts: 138; Member since: 13 Jun 2012)

Nextel is pretty much down. But you can wait all you want to, even until your contract is up. If they don't have the funds its not happening soon. They broke the bank from the purchase of Nextel all the way to the IPhone. And paying Clearwire for the data services, and which they could've have use that money build their own LTE!!!!!!!!!!!!!!

Regardless,, whatever spectrum they own. They have to make it work with their LTE phones. Otherwise they minus will go out of business. And as for the extra spectrum, they can also sale them.

posted on 18 Oct 2012, 16:45 6

10. iCandy (Posts: 46; Member since: 07 Dec 2011)

AT&T just received FCC approval on the purchase of a boatload of 2.3GHz spectrum. This fact combined with Verizon's recent acquisition of a motherlode of AWS will dampen any argument in opposition.

posted on 18 Oct 2012, 16:35 8

3. darkvadervip (Posts: 365; Member since: 08 Dec 2010)

I agree with at&t.

posted on 18 Oct 2012, 16:36 3

4. cncrim (Posts: 910; Member since: 15 Aug 2011)

Reason is reason but I don't think it going to work

posted on 18 Oct 2012, 16:38 9

5. vvelez5 (Posts: 623; Member since: 29 Jan 2011)

I don't agree with AT&T at all. If a company wants to purchase another company and that company is willing than there should be no reason it should be blocked.

posted on 18 Oct 2012, 16:49 9

11. -box- (Posts: 3991; Member since: 04 Jan 2012)

So (if it were possible) if apple wanted to purchase google, or Microsoft wanted to purchase either, or Toyota wanted to purchase Fiat/Chrysler, or BP wanted to purchase Shell, etc, it's automatically OK if the boards of each say so? You know what a monopoly is, right?

posted on 18 Oct 2012, 16:57 5

12. Rydsmith (unregistered)

Don't be too harsh on the young lad, they don't offer Economics 101 in most high schools (where I assume his education ended).

posted on 18 Oct 2012, 18:01 2

27. vvelez5 (Posts: 623; Member since: 29 Jan 2011)

"Young lad" I've been on this website for a while now. Way before the fanboy bashing came around. Also with the point of economics my friend if you'd understand the only way that monopolies can exist is through government coercion then you would not be saying what you are now. Question for you since it's obvious that you haven't taken any econ courses outside of what was a general requirement in your college liberal arts education. What does a monopoly mean to you and when does it happen?

posted on 18 Oct 2012, 17:21 1

16. Hammerfest (Posts: 384; Member since: 12 May 2012)

"You know what a monopoly is, right?"

The question is, do you know what a monopoly is?

Because last time I checked, the once broken up AT&T for being a Monopoly, is infact, 2x as bad compared to before the breakup...

Quite a few infographs about the before-after-longtimeafter of the AT&T Monopoly...

posted on 18 Oct 2012, 17:37

20. -box- (Posts: 3991; Member since: 04 Jan 2012)

Yep, which was my point. The same was threatened to Microsoft in the late 90s/early 2000s

posted on 18 Oct 2012, 17:57 2

25. vvelez5 (Posts: 623; Member since: 29 Jan 2011)

I would hope I know what a monopoly is, seeing as my major is in economics. And yes if those companies would like to sell then yes they should be able to. As an Austrian economics supporter I believe that the free market would actually prevent monopolies. Unlike governments which make monopolies.

posted on 18 Oct 2012, 21:24

37. ckingt4 (Posts: 26; Member since: 15 May 2012)

he who hath the most money wins. company a: extremely profitable, Company b: bleeds money and customers for 6 years. How do they compete selling the same products and services? They all started on an even playing field and sprint/tmobile lost, VZW and ATT won. I'm a VZW guy used to work for them, reguardless I don't want to see a limited US resource be controlled by a foreign company. I dont believe cheaper is always better and the wireless market obviously agrees. Getting back to my point, the free market created the duopoly. Now they have the most money which allows them to cover the most people which equals the most consumers.

posted on 18 Oct 2012, 16:58 3

13. rb68 (Posts: 27; Member since: 23 Apr 2010)

Then you just validated AT&T's stance. Using that same argument, they should have been allowed to merge with T-mobile.

posted on 18 Oct 2012, 17:58

26. vvelez5 (Posts: 623; Member since: 29 Jan 2011)

Yes, they should have been able to purchase T-mobile. It's amazing to see the number of new faces on this website that weren't around when the government who intervened on the AT&T, T-mobile merger. Seriously how new are you people.

posted on 18 Oct 2012, 18:09

28. dmckay12 (Posts: 243; Member since: 25 Feb 2012)

I agree with AT&T's position, but for a different reason. I don't think that foreign entities should control our communications or media. This policy was law under the Communications Act of 1934 until 1997, when concessions were made by the FCC, now many communications and media companies are owned by foreign companies/people (especially Japanese companies/people). The reason behind the policy is in case of war, where we are enemies with the owners, they could cripple our ability to communicate. The FCC can regulate it, but has only cracked down once.

posted on 18 Oct 2012, 18:18 1

29. vvelez5 (Posts: 623; Member since: 29 Jan 2011)

I understand your point. Myself I am for a global economy and if another entity, whether it be foreign or domestic, can make another business more profitable and efficient than I am for it.

posted on 18 Oct 2012, 16:39 7

6. downphoenix (Posts: 3165; Member since: 19 Jun 2010)

AT&T is just butthurt because Dan Hesse didnt play along with the others and gave an approving nod, but instead spoke out for the consumer in general. You can watch the other carriers will gang up on them soon, since Sprint is the outcast here.

The difference is, this buy is not going to affect the wireless industry here in the US, whereas the T-mobile buyout would have. The FCC was fine with the spectrum holdings that Sprint has, why would it make a difference if those spectrum holdings are owned by a US company vs a Japanese company... oh right, its because AT&T is also known as Republican Wireless, they have contributed more to the GOP than all other wireless carriers combined, so looks like they're calling in a favor.

Its all about undermining Sprint due to its spectrum holdings.

posted on 18 Oct 2012, 19:54 1

32. johnbftl (Posts: 281; Member since: 09 Jun 2012)

Other way around buddy. Dan Hesse was butt hurt when AT&T pulled the rug out from under him and almost snagged T-Mobile. Hesse has had a hard on the size of Florida to destroy AT&T since he was ousted as CEO over a decade ago. He destroyed their wireless division to the point they sold it to SBC (AT&T currently is a rebrand of Cingular, which was acquired when AT&T Global purchased Cingular's parent company, SBC). If you look back at Dan Hesse's AT&T, it was analog TDMA. Instead of building a more advanced network like Verizon and Sprint were doing with CDMA and SBC was doing with GSM, Hesse stayed the course with analog TDMA. Sound familiar? Instead of advancing to the LTE game, let's use WiMAX which is slower on an average congested metropolitan network than EVDO-RevA (3G). Now they're getting into the LTE game late and are well near bankrupt, probably will be if this deal gets blocked by the DOJ.

posted on 18 Oct 2012, 16:40 7

7. TheRetroReplay (Posts: 254; Member since: 20 Mar 2012)

Sounds like some is still butthurt over their failed acquisition of T-Mobile

posted on 18 Oct 2012, 16:42 7

8. cncrim (Posts: 910; Member since: 15 Aug 2011)

If softbank invest their money in USA and I don't see it as anticompetition. Not like like Att and T-Mobile merge it take away competition

posted on 18 Oct 2012, 17:01 5

14. jwest1975 (Posts: 1; Member since: 18 Oct 2012)

Simple fact is, Softbank is not taking away competition. They are only going to create a stronger competitor in the US against all the other carriers in the US....specifically, AT&T and Verizon. The failed AT&T/T-Mobile marriage would most likely resulted in the elimination of the 4th largest carrier in the US. All competition, AT&T being the first to speak out, should rightfully be concerned about Softbank and Sprint as it stands to create a significantly stronger number 3 carrier in the US. The competition will find whatever objections they can to prevent the acquisition.

posted on 18 Oct 2012, 17:20 3

15. letgomyeggroll (Posts: 138; Member since: 13 Jun 2012)

Softbank is just mainly backing up Sprint with the funds. They won't own the spectrum, just Sprint. I believe Softbank will mainly be in the back ground of Sprint. So I don't this this will affect the transition.

T-Mobile is not own by a U.S, company, but they have their own spectrum. So how is it worst than what Sprint is doing.

And Att and TMobile got stop because it will lead to only 1 GSM service provider.

posted on 18 Oct 2012, 17:28 2

17. xtroid2k (Posts: 534; Member since: 11 Jan 2010)

Dan did it to himself. While I don't agree with AT&T, Dan has to be ready for the return punch. Don't throw stones if you live in a glass house.

posted on 18 Oct 2012, 17:31 2

18. Slammer (Posts: 1515; Member since: 03 Jun 2010)

While I may see a small partial point of AT&T's complaint, the fact is, Sprint and Clearwire combined have always had huge spectrum holdings that could deliver extremely fast speeds. Only now when there is financial leverage for Sprint to start building out the nations fastest network, AT&T complains.

John B.

posted on 18 Oct 2012, 17:44 1

22. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

Karma is a bitch. During the ATT proposed takeover of Tmobile, I stated Sprint should look at the big picture and support the merger like the CEO of Verizon Wireless. Nope, Sprint had to cry a river over the deal. Now, it's Sprints turn to experience grief.

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