Tech wrap: Is the DoJ right to oppose the AT&T, T-Mobile deal?

August 31, 2011

The Justice Department sued to block AT&T’s $39 billion deal to buy T-Mobile USA because eliminating T-Mobile as a competitor would be disastrous for consumers and would raise prices, particularly because the smaller provider offers low prices, the lawsuit said. The lawsuit is a serious attempt to halt a “fundamentally flawed” deal, not a tactic to wring out-sized concessions from AT&T, a source familiar with the lawsuit said.

Dan Frommer says blocking the deal won’t help make service quality any better. A merger would create more spectrum to offer better, faster, more reliable service, Frommer writes. Also, its shortsighted to look at today‚Äôs pricing and market and use them as strict guides for the future, as voice and SMS service are disrupted by Internet technology, and as carriers try to charge more for 4G LTE access than they did for 3G access, Frommer added.

Breakingviews columnists Robert Cox, Robert Cyran and Richard Beales say the wireless industry in the U.S. is essentially a duopoly and that the DoJ suit against the AT&T, T-Mobile deal protects smaller providers.

Earlier, AT&T promised to bring 5,000 wireless call-center jobs back to the U.S. if the deal wins approval.

Sony put price tags on its long-awaited debut tablets that could hurt the company’s chances to grab the No. 2 spot in the tablet market. Two versions of Sony’s main tablet cost $499 and $599, which matches the price of Apple’s iPads for models with the same memory and will turn off consumers, analysts said.

“Consumers want tablets but they are not prepared to pay the same amount they’d pay for an iPad for something that’s not an iPad,” said Gartner analyst Carolina Milanesi. Research firm Forrester also put out a blog post saying that Sony’s pricing “raises a red flag” and could sink tablet sales.

The Financial Times pulled its iPad and iPhone apps from Apple’s App Store after losing a battle to keep control of customer data obtained through subscriptions. Apple recently begun to insist that subscriptions to apps that it hosts must go through its own store, giving Apple ownership of valuable data about customers from those transactions, as well as a 30 percent cut of revenues. In a move to reduce its dependence on Apple and develop apps more quickly for rival tablet computers, the FT in June launched a Web-based version of its mobile app, the first of its kind by a major publisher.

Chinese environmental groups accused Apple of turning a blind eye as its suppliers pollute the country. Toxic discharges from “suspected Apple suppliers” have been encroaching on local communities and environments, a coalition of environmental organizations said in a 46-page report alleging efforts to conceal pollution. Apple said it maintains a rigorous auditing regime and all its suppliers are monitored and investigated regularly and that the company requires “suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made”.

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This result isn’t all bad news for AT&T — they can still return 5,000 jobs to the U.S. market, they can still invest in 4G LTE infrastructure, and they can certainly work on improving the quality of their customer service.

Finally, they can compete more effectively for T-Mobile customers, with a value-based offer, and thereby convince consumers that they are worthy.

Perhaps AT&T’s CEO did under-estimate the anti-Bell sentiment towards his company, but they can recover — as they’ve done in the past, from their numerous setbacks.

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