OK, so Carly herself isn’t specifically to blame. But the U.S. Department of Justice today cited last year’s T-Mobile USA ads — featuring the spokesmodel cleverly lampooning AT&T and Apple — to help make its case that AT&T’s proposed $39 billion acquisition of the Bellevue-based company will reduce competition in the market.

“Documents produced by AT&T and T-Mobile establish that a significant portion of customers who ‘churn’ from AT&T switch to T-Mobile, and vice versa,” reads one part of the DOJ complaint. “This shows a significant degree of head-to-head competition between the two companies, as demonstrated by T-Mobile’s recent television ads directly targeting AT&T. The proposed merger would, therefore, likely eliminate important competition between AT&T and T-Mobile.”

The stakes are extremely high for both AT&T and T-Mobile USA parent company Deutsche Telekom. If the acquisition doesn’t go through, AT&T has agreed to pay Deutsche Telekom a $3 billion breakup fee.

And Deutsche Telekom would be forced to try to figure out what to do with T-Mobile USA, which has continued to shed subscribers despite its aggressive new “challenger strategy.”

Earlier today, AT&T expressed surprised at the DOJ suit and said it would continue to fight for the deal.

In a statement this afternoon, Deutsche Telekom said it is “very disappointed by the DOJ’s action, and will join AT&T in defending the contemplated merger against the complaint in court. DOJ failed to acknowledge the robust competition in the U.S. wireless telecommunications industry and the tremendous efficiencies associated with the proposed transaction, which would lead to significant customer, shareholder, and public benefits.”

Read the full DOJ complaint here: PDF, 25 pages.

Comments

  • http://twitter.com/mehalchin Martin Mehalchin

    I saw the headline only in my RSS Reader and wondered, “wow, how did Carly Fiorina get involved in this deal.” Wrong Carly.

    • http://geekwire.com Todd Bishop

      Hey, you never know how far that old HP fallout is is going to spread. ;)

      • http://blog.findwell.com Kevin Lisota

        I thought the same thing! Extra credit to Todd for knowing his commercials well enough to know her name.

        • http://www.testshoot.com/ TestShoot

          I thought she threw a temper tantrum for losing the gubenatorial bid to Gerry Brown, and like a child breaking their toys, the merger was the object. But the only thing THIS Carly broke… my heart

          • jackflash1

            I heard that Fiorina wants her old job as receptionist back….

    • The_parallax_view

      Exactly what i thought.

  • http://www.facebook.com/chuck.goolsbee Chuck Goolsbee

    “And Deutsche Telekom would be forced to try to figure out what to do with T-Mobile USA, which hascontinued to shed subscribers despite its aggressive new “challenger strategy.”

    Easy: Get the iPhone. Problem solved.

    The iPhone is the only thing that has kept AT&T’s revenues flowing. T-mo’s customer service is stellar, layer the iPhone on top of that and I’d bet the one shedding customers would be AT&T.

    • Thewickedwitchisdead

      More importantly, iPhone with an unlimited data plan option on TMO would be stellar and turn their fortunes around. If both Sprint and TMO get the iPhone as rumored and continue to offer unlimited data, even for a premium price over their existing plans, it will help both immmensely.

  • Don’t make me leave u

    IPhone on t-mobile NOW!!!!!!!!!!!!!!!!

  • Pam Miller

    I too thought the reference was Carly Fiorina. Hah!

  • Anonymous

    I just hope that ATT loses. We need more competition so we can have better prices. ATT and the big red should not be any more powerful IMO.

    • http://profiles.yahoo.com/u/6G3ZZJCHOLYP3S5CRCIHQ7WDSE MVIM

      I don’t. As much as I think the merger is bad for consumers, it would be a waste for AT&T to have to blow $3 billion on T-Mobile USA and get nothing out of it. Worse yet, since it will likely be sold off in piecemeal if this deal fails, that’s $3 billion of investment into a company that is almost guaranteed to fail on its own. And instead of lowering costs for consumers, AT&T customers will end up paying higher prices so that $3 billion doesn’t have to come out of executive bonuses for 2011.

      • jackflash1

        “On a yearly basis, American cell phone users are spending about $635.85
        on cell phone service. Spanish cell phone users pay about $508.26 for
        the year. And Canadian cell phone subscribers pay about $500.63. By
        contrast people in the Netherlands and Finland pay the lowest amount for
        cell phone service, only $131.44 per year. And cell phone users in
        Sweden only pay $137.94 per year.” so in short, it really doesn’t matter, as usual, the dummies in America are getting screwed.

    • http://visumrealestategroup.com Seattle Homes

      I’d have to disagree.  Great competition is great but AT&T’s merger with T-MO would create stronger network for both users.  I think, in the case of cell phone coverage, bigger is better.

      • Mat_t

        ATT’s merger with TMO would reduce our country to a two carrier competition spread. Not 3. Sprint owned by -> Verizon. Not to mention that it’s easily illegal, and allowing them to merge is the exact opposite of the reason AT&T was broken up in the first place – to prevent excess consolidation in the telephony industry.

        Do people really not know history?

        In the case of cell phone coverage, bigger is better *IF IT ACTUALLY IMPROVES*. ATT has already demonstrated they have no need for Tmo’s spectrum.

  • Joe Sabino

    Can you say Light Square? Payback for campaign fund to the President! No change only more the same maybe worst.

    • Roboeyes2020

      Light squared is not currently feasible. This is pretty well documented in filings with the FCC. The bands it would broadcast on with the strength needed for a worthwhile signal will probably interfere with GPS devices. Do a google search,

      Weird…you are saying things you have no knowledge of AND you have no idea how punctuation works at all. Its like you’re some sort of idiot. Oh wait hating on Obama. Yep folks, this old idiot has been drinking the fox news punch.

      • http://www.facebook.com/Edheltaur Dreyden Fairweather

        I think it is hilarious when someone criticizes another person’s punctuation and doesn’t get it right themselves. What makes it even funnier is you probably meant spelling, not punctuation, as Joe had spelling errors and only one punctuation mistake (though did have some other grammar mistakes). You, on the other hand, had numerous punctuation mistakes (e.g., many missing commas, ending your sentence with a comma, improper use of an ellipse, “it’s” gets an apostrophe when used as “it is”). So, does that make you an idiot? Does that mean your opinion is now invalid or automatically biased? According to you it does . . .

  • Mike G

    TMo’s coverage sucks so it’ll never be a competitor. 
    AT&T needs TMo’s frequency band so that it (AT&T) can exapnd capabilities into the future.

    Anti-trust is only a small part of it.

    But, since when has the Obommer administration NOT bent over backwards to send US money overseas?  Bye-bye $3Bil

    • Roboeyes2020

      T-mobile had hspa+ network rolled out to almost everyone in their service area before ATT had even began their similar network. I personally have seen 17Mbps download speeds with the HTC amaze on T-mobile. Most of their other devices run ~8Mbps. There is something called diminishing.. returns and cellphones are getting into that category with their speeds. 42Mbps. That’s what T-mo’s potential speed is. What is your cable modem at home bro?

      Also

      According to a Congressional Budget Office (CBO) report published in October 2007, the U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion dollars by 2017 when counting the huge interest costs because combat is being financed with borrowed money. The CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq, or $6,300 per U.S. citizen.

      From Wikipedia. ^ sources there

      Weird…you are saying things you have no knowledge of AND you think 3 billion dollars is a big deal. Its like you’re some sort of idiot. Oh wait hating on Obama. Yep folks, this old idiot has been drinking the fox news punch 

    • http://www.socialmediaspeaker.us Eric Weaver

      Mike, AT&T paying T-Mo for a failed takeover bid has nothing to do with the government – it is, however, part of the Free Enterprise system.

  • Anonymous

    “challenger strategy.”

    Didn’t that one blow up?

    • Rob

      Why do you think that’s funny?

      • Dick

        It was meant for other T-Mobilers. That was all the buzz during every meeting. I suppose you had to be there to appreciate the humor of the dept.

  • Justin Testin

    why post a video that can’t be viewed because it is “private”?

    • http://techmansworld.blogspot.com/ncr MHazell

      I’m looking at the video, and it is not private.

  • Paul Scott

    This is another example of how our current Adminstration has no understanding of business fundamentals.  I personally was involved with the Alltel-Verizon M&A–overseen mainly under the previous US Adminstration.  Business is business, period.

    All’s fair in Love and War, ATT and T-Mobile had to continue to compete, until the deal was completed.   

    AG Holder and Chairman Genachowski are to blame, not poor ol’ Carly! 

    Oh, excuse me, she makes over $250,000/yr.  Sorry, she is too blame…

  • Rakesh

    The video’s private!!!!

  • http://twitter.com/Java1959 Java 1959

    If T-Mobile wants its customers back all its got to do is sue Apple for access to the iPhone.  That’s the only reason customers have left.  I’ve never had coverage problems with T-Mobile in the USA and I travel a lot.

    • J F Atkinson Jr

      No Tmo needs to pony up the dough just like Sprint VZN and ATT did to get it (or any other phone device)!

  • Dae Powell

    Off topic, but a word about Carly. DON’T CHANGE HER IMAGE!  We need a sweet feminine presence before the TV audience occasionally. Nostalgic?  Maybe, but rock stars we have in abundance.  Not so many young folks present the wholesomeness of Donna Bailey (It’s a Wonderful Life) these days.

  • Lyndon

    I think part of the back and forth churn is because both companies use CDMA tech so you can take an unlocked phone from one company to the other. As apposed to switching to Sprint or Verizon (also more expensive).

  • http://powernuuz.com CitizenX

    She still has goofy elbows.

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