UPDATED 09:15 EDT / JULY 27 2011

Consumers and Politicians Oppose AT&T-T-Mobile Merger

As news of RadioShack partnering with Verizon hit the internet, people are thinking what will become of T—Mobile? RadioShack is dropping T-Mobile to partner with Verizon, but all is not lost for T-Mobile as they will merge with AT&T.  AT&T is set to acquire T-Mobile for $39 billion.  No problem right?  Well, not exactly.  The AT&T and T-Mobile merger is being opposed not only by consumers but also by politicians.

Bursor & Fisher, a New York-based law firm, is helping a small group of AT&T customers demand arbitration from the company.  The group alleges that the deal between AT&T and T-Mobile would violate the Clayton Antitrust Act, and harm competition in the wireless market. The firm has already signed up 11 AT&T customers, and it’s soliciting more on its website.  It filed the first arbitration demand Thursday in a 236-page document.

Senator Al Franken of  Minnesota sent a filing to the Justice Department and Federal Communications Commission, Franken said the deal would lead to a market duopoly, and that conditions attached to the merger wouldn’t stop what could be as much as a 25 percent increase in wireless costs for consumers.

“The competitive effects of a merger of this size and scope will reverberate throughout the telecommunications sector for decades to come and will affect consumer prices, customer service, innovation, competition in handsets, and the quality and quantity of network coverage,” said Franken, a member of the Senate Judiciary Committee. ”These threats are too large and too irrevocable to be prevented or alleviated by conditions.”

AT&T released a statement with the regards to the arbitration filed by Bursor & Fisher which also addresses the concern of Sen. Franken.

“The claims made by the Bursor & Fisher Law Firm are completely without merit,” the company’s statement said. “An arbitrator has no authority to block the merger or affect the merger process in any way. Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner.”

Others that are also blocking the merger are:  Sprint Nextel, Senator Herb Kohl of Wisconsin, California’s Public Utility Commission.  But the merger also gained supporters over the course of time as governors from 26 states have already signed the merger as well as 76 members of the Congress are pushing for the merger.

Michael Aschenbrener of Aschenbrener Law in Chicago stated that the arbitration may not stop the merger, but the least it could do is get the concerns of consumers heard, and be subsequently addressed by AT&T.


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