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Jon Fox,
CALPIRG

DoJ Blocks AT&T, Protects Consumers

San Francisco, CA – Today the U.S. Department of Justice (DoJ) filed suit to block AT&T’s proposed takeover of T-Mobile. If approved the merger would combine the second and fourth largest wireless carriers, giving AT&T control over nearly 50% of the U.S. wireless market. The CALPIRG applauds the DoJ’s efforts to protect consumers from market consolidation, higher prices, and fewer choices.

“We’re not surprised that the Department of Justice had anti-trust concerns and applaud them for raising those concerns” said Jon Fox, Consumer Advocate with CALPIRG, adding “The wireless market is already concentrated among a few companies, and the proposed AT&T merger with T-Mobile would make matters worse. Consumers need more competition, not less.”

In its filings to the court, the DoJ confirmed CALPIRG’s concerns that as proposed, the acquisition would reduce competition for wireless telecommunications services across the United States.

“Mobile phone companies should compete for customers through better service and lower prices,” said Fox. “Instead, phone companies are trying to corral consumers into a concentrated duopoly. Regulators must block this merger unless a truly competitive marketplace is not only allowed to exist but to thrive.”

There’s only one way the public interest could be protected in the event of a merger, and that is if regulators required wireless companies allow access their infrastructure for a fair price. Right now, AT&T, Verizon, and Sprint already lead in infrastructure development to an extent that it is nearly impossible for a new company to enter the market and compete.

If regulators required the big wireless companies to open up their back-end to competitors at a fair price:

    * Competitors could ensure that AT&T and Verizon, who have a history of raising rates together, would keep their rates in check or face losing customers.
    * Competitors could offer choices to the low-end market that T-Mobile has traditionally served that industry watchers fear AT&T will ignore.
    * Competitors could provide an alternative for consumers who want access to applications and other innovative applications that AT&T has a history of restricting.
    * Competitors could help ensure free and fair access to online content.

“Blocking AT&T’s consolidation of the market is a step in the right direction.  Opening up the back-end to competition is the next step to ensure competitive pricing and consumer protection,” said Jon Fox.

For more information contact:                   
Jon Fox, CALPIRG Consumer Advocate                                              
Office: (415) 622 0039 x309
jfox@calpirg.org

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The California Public Interest Research Group (CALPIRG) is a result-oriented public interest group that protects consumers, encourages a fair sustainable economy, and fosters responsive democratic governance.

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