How AT&T Completely $#!@ed Up The T-Mobile Acquisition

How AT&T Completely $#!@ed Up The T-Mobile Acquisition

AT&T’s plan to gobble up the fourth largest carrier in America is, for all intents and purposes, dead. After the Department of Justice moved to block the deal, AT&T began to back out of the deal.

So here’s a question. How does one of the biggest companies on Earth, with more lobbyists and politicians in its pocket than you can count, find itself incapable of closing a merger deal with a fourth-rate carrier, even after spending millions on campaign contributions, kickbacks and lobbying?

The simple answer? AT&T done $%!@ed up.

A fantastic piece today by The Washington Post explains just how AT&T screwed up the deal, but here’s the gist.

When AT&T first announced it wanted to buy T-Mobile, they did what they usually do: they put their lobbyists to work, while reminding politicians and interest groups that they’d contributed to that they really wanted this deal to happen. In fact, because the T-Mobile deal was so huge, AT&T literally threw every resource they had at their disposal to convince people that an AT&T-Mobile wasn’t just an okay deal, but good for consumers.

Hysterically, it was AT&T’s full frontal PR assault that ended up kicking the deal’s teeth in:

The letters from third-party groups raised eyebrows at government agencies and on the Hill, where people began wondering why groups with no obvious ties to broadband were writing in. News reports emerged showing that many of the groups had financial ties to AT&T.

Then there were the ads that staff members at the FCC said they couldn’t avoid when they opened a newspaper, fired up their iPads or watched TV – all touting the merger’s ability to put thousands of Americans to work. But who had ever heard of a big company merger creating rather than destroying jobs?

And then, just for good measure, AT&T ended up accidentally providing evidence that it was lying and that the T-Mobile merger wasn’t necessary to expand their beleaguered broadband network.

Incredulous staff members at the FCC also sent a harshly worded letter in the fall saying the company had “produced almost nothing” to prove its job claims. Their skepticism grew when an AT&T lawyer accidentally uploaded internal documents to the agency’s Web site that showed the company was planning to expand its broadband network even if the merger didn’t go through.

In other words, AT&T will now likely have to pay a $4 billion breakup fee now that the deal has gone south because they were not only lying about the merits of the deal, but they protested so much after they lied that everyone knew they had to be hiding something. Nice one, guys.

[via Gizmodo]

  • FriarNurgle

    iPhone5 on LTE = exodus to Verizon. No way AT&T can compete against the head start Verizon has on 4G… and I really really HATE Verizon. Maybe I can avoid the past pains I’ve had dealing with Verizon by piggy backing on my someone’s plan or something.

  • Srose428

    Picture really says it all hahaha, yeah AT&T handled it very foolishly and will loose billions because of it.

  • macgizmo

    I know I’m probably in the minority here, but I couldn’t care less about 4G. The speed of my iPhone right now is more than adequate for my needs whenever I’m not in WiFi range.

  • IamJAd

    Judging from that picture, maybe once AT&T was so close to the T-Mo girl, they…just couldn’t $#!@ing resist?

  • IamJAd

    I don’t know why you have VZW so much, but…  why do you love AT&T so much?  Right now, voice and data simultaneously is a plus, but everything else about AT&T just won them another year as the worst carrier.

    I do look forward to LTE on the iPhone, tho.

  • prof_peabody

    I don’t think this article is really right.  You are kind of implying that even though the deal is anti-competitive, reduces jobs, violates the monopoly act, and goes against everything congress is supposed to stand for, it would have gone through if they greased the right palms in the correct way?  
    If the law is worth anything at all, even if AT&T did everything right, it still should have been denied.  It’s a bad deal, it always was a bad deal.  If it was approved it would be awful for consumers in almost every way on a very objective, fact-based level.  

    Whether or not AT&T got their PR right is kind of irrelevant.

  • Srose428

    “You are kind of implying that even though the deal is anti-competitive,
    reduces jobs, violates the monopoly act, and goes against everything
    congress is supposed to stand for, it would have gone through if they
    greased the right palms in the correct way?” 

    Sad to say but yeah it would have gone through had AT&T not been so blatant in lying about  the merits of the deal.  Yeah the system does not work in case you were wondering.

  • Srose428

    Will LTE allow for both Voice and Data on other carriers??

  • Steve LeVine

    @google-6628ae36b67e19e19bdeea713bfaa2f7:disqus Yes, LTE is a standard whomever uses the technology so any carrier that offers it will have both voice and data simultaneous. Right now, Verizon and Sprint use CDMA technology for their 3G which doesn’t allow simultaneous in in current form (without some serious tweaking.) AT&T uses GSM technology for their 3G.

  • Steve LeVine

    IF the assertions of this article are supported and that the real reason the merger didn’t happen was not because of the anti-competitive nature but how AT&T handled it, something should be taking place. What is that “something”? The ouster of the CEO and other top execs of AT&T by demand of the shareholders. Probably dismantling of the Board of Directors as well. If it costs them $4 billion in breakup fees alone, not counting the loss of the expected revenue based on the assumed merger, that’s obviously not the right way to run a for-profit, public company.

  • Srose428

    Oh well this is gonna change the game come next fall…Sorry I framed my question incorrectly I realize LTE is a standard as well as the current standards in use, thank you for clarifying though. Gosh AT&T is %$^&ed

  • winski

    ATT is a pariah.. I dealt with them a LOT over the years and they NEVER cared about customers – AT ALL and only cared about there profits. They did NOT care for share holders – only what THEY could put in their pockets. $ 4-6 billion as break-up fees?? Mouse-nuts..rounding error and the bean-counters will figure out how to FORCE subscribers and the government to pickup the tab and they’ll never see a blip… They could care less…

    T-Mumble on the other hand obviously couldn’t find any marketing people to get the $99 iPhone 4s to the market before the holidays so again, they’re relegated to being a bad ‘me-too’…

    Just pathetic…

  • Aaron

    Loose billions? I prefer tight billions.

  • Robert Glover

    delete

  • Evan Benford

    Hope sprint buys up the spectrum

  • Howie Isaacks

    The root cause of the acquistion failure was not AT&T.  It was government interference.  We don’t the f*cking FCC or Justice Dept. meddling in the affairs of business, and we don’t need their damned nanny state protections. 

  • OEB

    It’s ok guys! AT&T will be just fine as it will just continue to rape us with their oligopolistic pricing and complete lack of respect for their customers. Hell, next they will increase data prices, texting prices and throttle my ‘unlimited’ data… Wait they already did that.

  • STRIPBLUNTS

    This article is TOTAL BS!!! It’s articles like these + blogs & the media that destroyed this deal! Everyone cried “monopoly” without even thinking about what they were talking about!! Now everyone can go back to complaining about their AT&T coverage, like they’re not trying to remedy the problem. Nice going “genius” press. Now it’ll take AT&T at least 4 years to expand the spectrum & coverage to 4G/LTE + T-mobile will most likely be out of business soon. Once again you’ve succeeded in slowing down progress for a few ad-dollars & hits on your sites. The only thing I’ve learned from this is that big business really isn’t that big! The reality is that most of the people involved are COMPLETE IDIOTS, the media included! Next time you have a question about finance or economics, Google “Canadian Economics”: Grade 12. AT&T’s execs must be “dumbfounded” by this level of stupidity! “BIG” TIME FAIL!!

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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