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T-Mobile Merger Approval Violated Every One of the DOJ's 'Antitrust Principles'

51 points by KaiserSanchez 6y ago

toast0 6y ago
The timeline is that the merger approval happened and sometime after that, the new principles were published. If we assume positive intent, someone at DOJ was tired of approvals like the T-Mobile deal, and was able to (somehow) build concensus to an announcement of new principles. These newly announced principles are quite a bit different than the old ones, so we shouldn't be surprised that old deals don't align, that's kind of the point. It's also not too surprising that an old deal finalized a few months before the new principles finalized. Everything is on a long pipeline, and it gets done when it's done, changing principles in the middle is hard --- especially when the new ones are unpublished and you had already done significant work under the old ones.
- baryphonic 6y ago
  Not to mention, imagine the legal headache for the DOJ to stop a merger on as-yet unpublished principles. "Arbitrary & capricious" and various violations of rules like the Administrative Procedures Act would be thrown out in court. It's a little sketchy as is that the DOJ can change its criteria without any decision in Congress, but at least this is closer to following the contours of the law as is rather than arbitrary decision-making.
- quantified 6y ago
  It’s a very charitable assumption. New principles were not necessary to block.
ars 6y ago
Techdirt is acting like Sprint was going to remain as a viable company "if only they didn't merge". But the reality was either they merged, or Sprint would shut down. There was no scenario where Sprint stayed in businesses acting as competition. On top of the that T-Mobile had a really hard time competing with Verizon and AT&T because of lack of spectrum, so preventing them from getting Sprint's spectrum would actually make them less competitive. I think the author may have forgotten that Verizon and AT&T are competitors to T-Mobile and instead only paid attention to Sprint. > "Not only did the DOJ ignore all objective data showing the deal would clearly be terrible for customers, the market, and employees" What data is this? Because out here in the real world the deal has been amazing for T-Mobile customers and the market. Perhaps not employees, but that's not really a reason to stop it.
- athms 6y ago
  >But the reality was either they merged, or Sprint would shut down. There was no scenario where Sprint stayed in businesses acting as competition. That is because SoftBank didn't know what to do with Sprint and refused to invest money into the business. When SoftBank bought Sprint, the company was profitable and T-Mobile was unprofitable. Deutsche Telekom had been trying to offload T-Mobile for years but wanted more than it was worth. Slowly the tables turned and T-Mobile became profitable while Sprint started losing money. Masayoshi Son is the Eddie Lampert of Japan. Son used to be worth about $100 billion, but his bad investments via SoftBank over the last twenty years cut $80 billion off his wealth.
  - csharptwdec19 6y ago
    Sprint made a lot of stumbles -before- Softbank. Honestly when the Acquisition happened I thought softbank was insane for doing so. IOW Sprint didn't know what to do with sprint either, I'm just glad TMO got some spectrum out of it at the end. But, even before that, Sprint was realizing the pain of their missteps. Probably the biggest of which was WIMAX, the smaller was taking too long to get rid of IDEN. Sprint didn't know what to do with Sprint in 2013. Even before the Acquisition they were foregoing parts of their normal maintenance and instead 'living' with problems. The one major saving grace in all of it? The biggest reason it was still good for TMO? Sprint had a LOT of sub-1000Mhz spectrum whereas TMO had none. And, to TMO's credit... They played the game very well. Their roaming deal from AT&T before the sprint merger completed allowed them to temporarily gloss over lot of their coverage issues until they were able to start using that spectrum for LTE (Also that nice piece of 700mhz they got from VZQ). Source: Sprint user from 2009-2013, switched to TMO, Used to deal with maintenance of Sprint Infrastructure in a large municipality as a contractor.
RcouF1uZ4gsC 6y ago
I think in this case, the decision was to either allow the merger and create a three way competition with AT&T, Verizon, and Sprint/T-Mobile, or watch as AT&T and Verizon slowly pushed out Sprint and T-Mobile. Sprint was mostly dead by this time. T-Mobile got a jump start due to innovation in the consumer space, but that was dying out. Instead, by allowing the merger, we have a viable third company to compete with AT&T and Verizon.

51 points by KaiserSanchez 6y ago

The timeline is that the merger approval happened and sometime after that, the new principles were published. If we assume positive intent, someone at DOJ was tired of approvals like the T-Mobile deal, and was able to (somehow) build concensus to an announcement of new principles. These newly announced principles are quite a bit different than the old ones, so we shouldn't be surprised that old deals don't align, that's kind of the point. It's also not too surprising that an old deal finalized a few months before the new principles finalized. Everything is on a long pipeline, and it gets done when it's done, changing principles in the middle is hard --- especially when the new ones are unpublished and you had already done significant work under the old ones.

baryphonic 6y ago
Not to mention, imagine the legal headache for the DOJ to stop a merger on as-yet unpublished principles. "Arbitrary & capricious" and various violations of rules like the Administrative Procedures Act would be thrown out in court. It's a little sketchy as is that the DOJ can change its criteria without any decision in Congress, but at least this is closer to following the contours of the law as is rather than arbitrary decision-making.
quantified 6y ago
It’s a very charitable assumption. New principles were not necessary to block.

ars 6y ago

Techdirt is acting like Sprint was going to remain as a viable company "if only they didn't merge". But the reality was either they merged, or Sprint would shut down. There was no scenario where Sprint stayed in businesses acting as competition. On top of the that T-Mobile had a really hard time competing with Verizon and AT&T because of lack of spectrum, so preventing them from getting Sprint's spectrum would actually make them less competitive. I think the author may have forgotten that Verizon and AT&T are competitors to T-Mobile and instead only paid attention to Sprint. > "Not only did the DOJ ignore all objective data showing the deal would clearly be terrible for customers, the market, and employees" What data is this? Because out here in the real world the deal has been amazing for T-Mobile customers and the market. Perhaps not employees, but that's not really a reason to stop it.

athms 6y ago
>But the reality was either they merged, or Sprint would shut down. There was no scenario where Sprint stayed in businesses acting as competition. That is because SoftBank didn't know what to do with Sprint and refused to invest money into the business. When SoftBank bought Sprint, the company was profitable and T-Mobile was unprofitable. Deutsche Telekom had been trying to offload T-Mobile for years but wanted more than it was worth. Slowly the tables turned and T-Mobile became profitable while Sprint started losing money. Masayoshi Son is the Eddie Lampert of Japan. Son used to be worth about $100 billion, but his bad investments via SoftBank over the last twenty years cut $80 billion off his wealth.
- csharptwdec19 6y ago
  Sprint made a lot of stumbles -before- Softbank. Honestly when the Acquisition happened I thought softbank was insane for doing so. IOW Sprint didn't know what to do with sprint either, I'm just glad TMO got some spectrum out of it at the end. But, even before that, Sprint was realizing the pain of their missteps. Probably the biggest of which was WIMAX, the smaller was taking too long to get rid of IDEN. Sprint didn't know what to do with Sprint in 2013. Even before the Acquisition they were foregoing parts of their normal maintenance and instead 'living' with problems. The one major saving grace in all of it? The biggest reason it was still good for TMO? Sprint had a LOT of sub-1000Mhz spectrum whereas TMO had none. And, to TMO's credit... They played the game very well. Their roaming deal from AT&T before the sprint merger completed allowed them to temporarily gloss over lot of their coverage issues until they were able to start using that spectrum for LTE (Also that nice piece of 700mhz they got from VZQ). Source: Sprint user from 2009-2013, switched to TMO, Used to deal with maintenance of Sprint Infrastructure in a large municipality as a contractor.

RcouF1uZ4gsC 6y ago

I think in this case, the decision was to either allow the merger and create a three way competition with AT&T, Verizon, and Sprint/T-Mobile, or watch as AT&T and Verizon slowly pushed out Sprint and T-Mobile. Sprint was mostly dead by this time. T-Mobile got a jump start due to innovation in the consumer space, but that was dying out. Instead, by allowing the merger, we have a viable third company to compete with AT&T and Verizon.