Friday, 30 September 2011

AT&T’s plans to become biggest WiFi player in US put in question

WASHINGTON - The US Department of Justice (DoJ) has announced it has filed an antitrust lawsuit against AT&T, the second largest US mobile phone operator, to block its intention of merging with T-Mobile. The DoJ fears the combination will dominate the market too heavily, resulting in ‘higher prices, fewer choices, and lower quality,’ sending AT&T’s plans to become the country’s biggest WiFi player into turmoil.

Experts in the industry believe the main drive behind the merger, considered by many to be a takeover of T-Mobile, is AT&T’s desire to expand its wireless internet capabilities. 

Although AT&T bought the WiFi operator Wayport in 2008 and is the biggest WiFi hotspot provider in the US - in places such as Starbucks and McDonalds - it does not yet offer WiFi calling capacities. By acquiring T-Mobile’s WiFi calling services, it could also reach those customers who make WiFi calls from home - approximately 40% of all WiFi users. The merger would also make AT&T the biggest phone operator in the US, since it would control over a third of all wireless subscriptions in the US.

The Federal Communications Commission (FCC), which has been investigating the merger for several months now, has not released its finding as of yet.  “The [DoJ] has done its job. Now the FCC should do its job, follow the law, and reject the takeover of T-Mobile,” said Harold Feld, the Legal Director of Public Knowledge, a US public interest advocacy organisation.

Published previously in the September issue of E-Commerce Law & Policy, London 2011, copyrights apply at all times. Picture: