Sen. Herb Kohl has come out against the AT&T, T-Mobile merger and this could be a big deal because Sen. Kohl is the chairman of the U.S. Senate’s subcommittee on antitrust.
In a sternly-worded letter, Sen. Kohl said the move could cause “substantial harm” to competition in the mobile marketplace and he feared that this will lead to further consolidation. If AT&T is successful in its $39 billion bid for T-Mobile, it would become the largest carrier in the United States by a wide margin. Verizon Wireless would still be within distance in terms of subscribers but poor old Sprint may become outgunned.
“It will pose a substantial danger to consumers of higher cell- phone bills and fewer choices for service at exactly the wrong time — when consumers are relying more and more every day on wireless-phone services to make and receive voice calls, exchange emails and text messages, search the Internet, and use many other applications,” Kohl said in a letter.
The Senator’s words echo what Sprint has been arguing for a few months now but Sen. Kohl’s objections aren’t guaranteed to derail the deal. In fact, if I had to bet some money on it, I’d say that the deal goes through in the first half of 2012 with some major divestitures and conditions.
Don’t look for Verizon to look to buy Sprint after that, as Big Red has said it is not interested and I doubt that deal would get through governmental regulations.
[Update] AT&T has hit us with its official response:
“We respect Senator Kohl. However, we feel his view is inconsistent with antitrust law, is shared by few others, and ignores the many positive benefits and numerous supporters of the transaction. This is a decision that will be made by the Department of Justice and the FCC under applicable law and after a full and fair examination of the facts. We continue to believe those reviews will result in approval of this transaction.”