Sep 14 AT 9:53 AM Anthony Domanico 23 Comments

Chicago Tribune supports AT&T/T-Mobile merger, calls DOJ’s antitrust suit an “unnecessary mess”


The Chicago Tribune is fully embracing the proposed merger between AT&T and T-Mobile USA. In an editorial published on Monday, the Tribune scorned the Department of Justice for filing an antitrust suit against the deal, stating the move was an unnecessary mess.

In its zeal to protect consumers from price increases that may or may not have occurred in the deal's aftermath, government lawyers managed to sandbag not one but two major companies. It's a mess – and so unnecessary.Chicago TribuneEditorial

The Tribune offers two main arguments for why the proposed deal between AT&T and T-Mobile should receive the FCC’s and Congress’ blessing.

First, as has become painfully obvious in recent months, Deutsche Telekom (DT) simply has no interest in aggressively building out its US operations. DT would much rather invest its money in a significant build-out of its European spectrum, where it believes it will see the biggest return on investment.

Second, the Tribune argues that the deal would bring rural communities into the 21st century when it comes to data speeds. Since DT has suggested it will not make the necessary investments to bring HSPA+ or a next-generation LTE network to the rural communities, the Tribune believes rural America will lose out in the end if the deal is not approved.

Whether you’re for or against the proposed merger, the Tribune editorial brings to the forefront what we’ve been fearing all along: that Deutsche Telekom is simply not interested in investing in the US telecom market. This suggests that, even if the AT&T deal is rejected by the United States, T-Mobile USA will get sold to someone in the not-too-distant future. Sadly, it appears T-Mobile USA as we know it today will soon cease to be.

What do you guys think? Does the Chicago Tribune bring up some good points, or is the story just more fodder?

Source: Chicago Tribune

Anthony loves all things technology, from hardware to apps and games. You can connect with him via Google+ or Twitter by clicking one of the fancy doo-dads above.

    Most Tweeted This Week

  • B2L

    Honestly this is all just a bunch of BS! The DOJ did the correct thing filing an antitrust suit. We definitely don’t need a GSM monopoly.

    • ben steel

      BS is right!..
      The lack of expansion in rural America leaves the door open for others, Metro PCS, Sprint, or an American new comer to join the party….with the merger, the door will close. I hope no one is buying that argument.
      No mention of job creation anymore….? That theory, was blown out of the water weeks ago after the claim of creating 5000 new jobs was debunked by the offsetting lose of over 10 thousand….a net lose of 5K

      • spaceinvader

        Yah but you have to realize this. If smaller carriers were to expand high speed data to rural communities, that would cost money. And the money it would cost to increase coverage in rural communities would cost way more than they would be pulling in from the rural communities. You have to remember no matter how much companies “care about consumers”, its a business at its core and no money means no service. I’m not saying I agree with the merger but you Have to look at it realistically.

  • SparkyXI

    That coming from a corrupt paper in an even more corrupt city.

  • jimkenobi

    att&t is really bad in Chicago. If you work for a paper and have an iPhone on att&t you might be a little biased.

  • ben dover

    blah blah blah, I’m sure I could go find another media outlet that says otherwise.
    The first thing blocked out when it comes to a court room is what the media has to say :)

  • Rushi

    Pretty sure former Governor Rod Blagojevich was involved in the selling of this editorial. Wonder how much he got.

  • Tangent

    “First, as has become painfully obvious in recent months, Deutsche Telekom (DT) simply has no interest in aggressively building out it’s US operations.”

    Really? Then what’s with the regular rollouts of new 4G markets? What about the sudden and huge improvement in the number of high-end Android handsets they’re carrying?

    • Rushi

      They are just making themselves more marketable for a sell off.

    • OskarMULA

      That’s what I was thinking!

    • ben dover

      I think it might be more of a “hey! remember us? the Chicago Tribune!?…. yeah, we’re still here! buy our newspapers!”

    • Anthony Domanico

      They’re doing what was already in the plan/budget for 2011. Companies don’t act as quickly as you think they do.

      Deutsche Telekom has indicated on several occasions that it does not want to invest in a next-generation network separate from their 3G+ (HSPA) network they’ve been working to build out for the past year or two.

      • Jeff

        Considering that their network has the highest rated 3G speeds, I’m a little bit confused. As for a “4G” network, would you rather they have spent billions of dollars building a WiMAX network like Sprint only to get burned and have to switch to LTE?

        Let’s not call companies dead until they’re actually dead, ok?

        • Anthony Domanico

          In what world does T-Mobile not need to build out an LTE network?

          • Tangent

            In a world where they gained an advantage by being the last to roll out 3G the way they did? Because they waited so long compared to other providers to roll out 3G, all their 3G equipment was newer than anyone else’s. This meant that when time came to upgrade to HSPA+ and their current 4G speeds, they mostly just had to upgrade the backhaul and flip a switch while other carriers had to replace actual hardware in their towers.

            They currently provide 42 Mbps service through HSPA+. This can be increased to 84 Mbps. Apparently further revisions of HSPA+ support 672 Mbps. By the time those speeds are too slow for consumers I’m betting LTE won’t be the cutting edge tech anymore and T-Mobile will be able to go from their HSPA+ network straight into a 5G network and skip the expense of LTE equipment altogether.

            The only downside as I see it with HSPA+ upgradable to 672 Mbps is that there are some people out there that are obsessed with whether or not it was once not classified as 4G, but only advanced 3G. Personally I wouldn’t care if Verizon used quantum entanglement while T-Mobile used some sort of smoke-signal based system as long as the data speeds were competitive.


    Please every paper gets funding from companies to print pro whatever articles. There are free UN bias media outlets still left

    • BiGMERF

      Sorry last sentence should read there are few not free

  • WrlsFanatic

    How do I put this: Chicago Tribute editorial page… if you have an opinion on a policy issue, then I’m generally ok with that. If you think that gay marriage should be legal, or Obama’s healthcare law overturned, then please feel free to chime in. These are things you may have enough understanding about to comment. What you don’t know shit about is the wireless industry or business, so why don’t you do us all a favor and SHUT THE FUCK UP!

    AT&T wants the US to believe that 1) the merger will bring more jobs, 2) they will roll out LTE to more of the US after the merger, and 3) there will be no issue with prices or competition.

    1) Name one merger of two mature companies that brought about jobs in the last decade or two. Just one. Mergers are built around synergies and economies of scale. You achieve those by reducing costs because x and y functions performed separately by both companies can be performed by one person. At best, they would like you to believe that they will hire a ton of workers to roll out LTE (see my point #2) and that will create jobs. 5k jobs will be created, they claim. Those will all be blue collar, and when you fire off all the white collar workers, you not only have a net SALARY loss as higher-paid employees more than off-set lower-paid employees, but I refuse to believe that AT&T will cut LESS than 5k white collar workers, leading to a net job loss. GREAT IDEA IN A DOWN ECONOMY!!!

    2) This one is really simple. I worked at a national US carrier for years, and they all have very detailed models that direct their network expenditures to the best possible areas. They say they’ll cover 97% of the US with LTE if the merger is approved. First, that doesn’t logically flow. You’re telling me that after dumping $39B over to DT you’ll somehow more easily justify the cost of rolling out LTE to rural areas? It’s a simple function of: # of potential additional customers * monthly revenues * time-value of money vs. the initial investment. Nothing about flushing $39B down the toilet makes that equation change, and at the very least you would logically conclude that with less cash,t he cut-off point for capital expenditure projects is higher than it was before with less capex to go around. AT&T has NEVER said how they come to this logical conclusion. Second – and this one could not be any more important or crucial – there is NO LEGAL REASON why AT&T HAS to roll out LTE after this merger. If the merger went through, on day one De La Vega could make a public statement along the lines of, “HAH HAH FUCKERS! JUST KIDDING!” and there would be nothing the government could do about that. What would it cost them? Consumer backlash? Hardly. The average consumer knows nothing about this. Most don’t even know there’s a proposed merger in the works. The justice department would be mad at them… but not only is there little AT&T would need from them after gobbling up T-Mobile, but I’m sure AT&T’s status as the #1 corporate political donor would very quickly smooth that over.

    3) The whole reason this move was blocked – well, really they’re just attempting to block it – was because of its potential impact on competition. AT&T really hasn’t said much on this at all. The simple fact is, whether it’s official or just an unspoken agreement they have, AT&T and Verizon have essentially colluded on pricing for many years now. I remember about three years ago when Verizon changed prices for unlimited plans to add unlimited talk at $69 on a Friday, AT&T matched that Sunday. That’s impossible. You can’t put together a business case for that kind of pricing shift, run it up the chain, get plans input into the system, and officially launch them in under 48 hours. It’s impossible. I used to BUILD those business cases for my former employer, and it takes over a week in the best of circumstances. I’m not suggesting they actually tell each other what they’re thinking about – why take the legal risk of a collusion lawsuit? I’m suggesting that AT&T looked at the change and said, “Why give consumers a reason to prefer Verizon over us? Let’s just match them.” Maybe you’re asking, “Well didn’t everyone do that with the iPad? The $500 price point is pretty common.” The fact is, AT&T and Verizon have had nearly identical price points ($x for x minutes) for MANY years now. You know who neither of them have matched? T-Mobile. Sprint. For years now, you’ve had AT&T and Verizon at the top of the price range, Sprint had the best data plan pricing, and T-Mobile had the best voice pricing (and not far from Sprint on data). I won’t even go into the fact that the AT&T/Verizon duopoly will crush Sprint, I’ll just state that you will never see value prices like T-Mobile brought when they exit the market.

    Eventually, T-Mobile will fail, and THAT is the reason AT&T should be using to justify the merger. “If they won’t be here in 5 years anyway, why can’t we have them? Verizon and Sprint are CDMA… they don’t want T-Mobile.” The fact is, that is not entirely true. In 5 years, Verizon and Sprint will both be LTE, and while T-Mobile will probably never move there, it’s the next logical evolution of their network. If T-Mobile is still there in three years, Sprint would easily be able to acquire them, slowly (but DELIBERATELY unlike their iDen network) move customers to LTE, and then shut down the old T-Mobile network, thus providing synergies and economies of scale.

    It is logical to conclude that this merger – if it went through – would crush Sprint, which would lead to higher prices for the US wireless consumer. If the Tribune is too ignorant – not to mention flat-out illogical – to see that, then they should keep their opinions to themselves.

    • uknowme

      I second that long winded but thought out comment.

      • WrlsFanatic

        Yeah, I type too much.

    • snowbdr89

      Dam it says comment not write a novel. : )

  • Nathan

    Am I dum to say I only want the deal off because I have T-Mobile and not that I don’t know the facts?

  • nexus

    so sad that a newspaper can be bought and paid for (ignore the pun) :( stupid editors be unbiased. I know television is full of bias but keep it out of other things… please?