Skip to comments.DoJ targets AT&T: The story behind the story
Posted on 08/31/2011 11:50:03 AM PDT by markomalley
Today it was announced that the Department of Justice will attempt to block AT&Ts acquisition of T-Mobile. The deal is needed for technical and regulatory reasons to allow AT&T to compete in the 4G wireless market with Verizon, Sprint/Clearwire, and with the upcoming competitor LightSquared. So why is the Department of Justice calling it bad for competition?
Enter R. Gerard Salemme. Its not a well-known name, but its been an important one in the Obama administration. Its also a name that often comes up in the ventures of one Craig McCaw. Craig McCaw is an equal opportunity donor who gives to anyone who looks likely to win, including Gore 2000, Bush 2004, and both sides in 2008.
That $2,300 donation to Obama sure is paying off.
Theres a complicated web here, but Ill do my best to explain it. R. Gerard Salemme is a man who has moved from one company to another in recent years, co-founding Eagle River, and working at XO, Clearwire, and now ICO Global Communications. What those firms all have in common is that theyre also firms invested in or founded by Craig McCaw, whos Salemmes business partner at Eagle River, and has often taken leadership roles in these firms. In particular, McCaw founded Clearwire, which operates a 4G wireless network.
Craig McCaw also took over Nextel, shaped it up, and sold it off to Sprint. Sprint Nextel currently owns a majority of Clearwire.
Where does Obama come in? In 2009, Salemme took time off from his job at Clearwire to join the Barack Obama transition team. One project of his was digital television transition issues, where he promoted the famous delay in the DTV transition. You see, the longer the DTV delay took, the longer it would be before Verizon Wireless could get its hands on the C Block of spectrum to aid its own 4G rollout, in order to compete with Clearwires network.
So the Obama administration took action, dragging its feet on DTV, in a way that hindered 4G competition. Salemmes employer stood to benefit. Big surprise!
The time has now come for Clearwires 4G competition to be expanded further, as AT&T seeks to get ahold of T-Mobiles spectrum, to allow it to roll out 4G wireless to over 95% of Americans. So naturally, the Obama DoJ is seeking to stop that from happening.
Ladies and gentlemen, enjoy your Hope and Change in the new Culture of Corruption.
...another 100,000 jobs Dumbo scrubs
Please .... $2,300 is 0.023% of what Zero has spent on his freakin' vacations. As far as a campaign donation - it's inconsequential. He won't even get a napkin, let alone a dinner with 10,000 of his friends.
I'm no fan of Zero - but let's be intellectually honest. He didn't get to make it to this position becuase of a $2,300 donation.
It is of course, the Chicago way...yet another reason to defund, defang and declaw the DC Beast...
All of what you posted may be true (most likely it probably is)
Having said that I do NOT want ATT to buy TMobile. ATT is horrible and already behaves like a monopoly.
If they buy T-Mobile (a company that has very decent service), the US will become the ONLY nation in the world (bar North Korea, Cuba etc) to have an effective monopoly in the GSM market
ONLY Nation!! Can you imagine?
Verizon and Sprint are both CDMA
Yes..yes.. 4G is coming.. but so is a balanced budget... I will see it when I believe it.. that what I am seeing is what I am believing...
If I’m running for office and a donor gives me $2,300 and my opponent $2,300 then they did not give me any edge over my opponent. From a competitive standpoint, it was equivalent to giving zero to both.
Companies that large do not need to merge; the only possible outcome is not having to compete with each other and inevitable higher prices and lower quality.
If a $29 BILLION company can’t make it on it’s own then let the markets take their course.
Trust me, I know.
I am a former Cellular One (then Cingular) (then AT&T) refugee who is on T-Mobile.
But, regardless of my personal preferences...I don't like the government sticking their nose where it doesn't belong.
Particularly THIS administration.
I agree. One look at Clearwire’s stock price (CLWR) will indicate that the government is not on their side.
As much as I despise Zero and the Gov’t I’m glad.....I worked my a$$ off for ATT for 23 years and was unjustly laid off while the affirmative action workers are still there sleeping on the job.....They let a lot of good people go and they don’t have the best network anymore, Verizon does.....so good.
There’s little dif between a cartel and a monopoly.
I remember ...*smiles*
The facts are that AT&T is fully capable of expanding it’s 4G service offerings to “95% of Americans”, by other means and for less than what it will spend to acquire T-Mobile; as it’s own submission to the FCC admits.
Frankly I would prefer to see a Sprint/T-Mobile merger and hope three more-equal majors in the cell-phone/wireless space will be better than two.
Yes, I know, they all have competition from the likes of Skype, Vodaphone, Magic-Jack - if someone already has out-of-the-house wireless (cell or “wifi”) Internet service. That’s the rub the Internet VOIP services, out-of-the-house are dependent on first having either cell or WiFi service. So, again - three majors would be preferable to two.
You rememeber what????
What do you remember????
Local government corruption gave us the Comcast monopoly in many communities, thank you. I doubt that a Republican DoJ would have ruled differently in the AT&T case. They’re big enough to manage on their own, just as Oracle is big enough, but large companies like to monopolize their markets, don’t they. Who’s Oracle’s competitor, I forget?
Thanks for the reply.
My point here though is, that even if Obama was not crooked (and donkeys would fly), I think the DOJ would have still blocked the merger
It completely flies in the face of competition and is about as good a poster child for anti trust as any
Here in KC. This has nothing to do with some campaign donation. This merger would likely be a death knell for Sprint to stay in the game. Thus you would be down to two major players. Sprint/Tmobile would make more sense, that would keep three viable players. Anybody who doesn’t think rates would go up after ATT acquired TMobile can look at ATT and Verizon data plans when they were the only players for Apple. Now Verizon switching their data plans to match Sprint. Points to more then likely Sprint will indeed have the Apple by year end if not sooner.
For my part, I’m not against the outcome. I’m only against the means to the end.
massive layoffs of the eighties
Oh I was 2004....
You think a 20 billion dollar merger is going to happen and be free from politics? I guarantee ATT/TMobile has insiders on the ground pulling favors trying to get the Administration to look the other way.
This deal goes through and you can all kiss your current phone bill & quality service goodbye.
No, I don’t think it’s going to be free from politics. What a ridiculous notion. I said I dislike the means to the end. I didn’t say I expect it to be any different.
There are a lot of things I don’t like, even knowing that they are going to be the way they are and that very little can be done to change the fact.
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