Wireless carriers square up for court battles

WASHINGTON: The fight over the legality of AT&T's $39-billion bid to acquire T-Mobile USA has just begun. But the battle lines from a communications perspective have already been drawn.

WASHINGTON: The fight over the legality of AT&T's $39-billion bid to acquire T-Mobile USA has just begun. But the battle lines from a communications perspective have already been drawn.

Last week, Sprint – the third-largest player in the wireless telecoms market behind AT&T and Verizon – added its weight to the Department of Justice's antitrust lawsuit against AT&T, with one of its own opposing the proposed merger. It has also been buying full-page ads in newspapers like The Washington Post, with headlines and graphics that suggest if the merger is approved it would create a duopoly.

John Taylor, manager of public affairs for Sprint, tells PRWeek its comms strategy is to let people know “we're on their side. We want consumers to understand Sprint is standing up for them and for competition.”

In addition to the ads, Sprint's PR department is working with reporters on stories about the merger. “Consumers are understandably hungry for information about what is going on,” he says. “We have seen a lot of media interest because we're talking about people's cell phones here; they're no longer considered a luxury to have.”

“But we don't want to become too distracted by this,” he adds. “As far as what we're doing in terms of consumer outreach, it has really been limited to talking with reporters and those series of ads.”

By most accounts, AT&T didn't expect this kind of legal pushback. The company has supported the proposed bid with a full-scale lobbying and PR effort from the start, including the launch of a dedicated website, www.mobilizeeverything.com. The site argues the merger would result in more capital expenditure, job creation, and improved voice and data services.

And, as recently as August 31, AT&T announced that, if the deal were to be approved, it would bring 5,000 wireless call center jobs currently overseas back to the US. The announcement seemed to be good timing; the following week, President Barack Obama would address Congress in a televised speech about jobs.

But, later that same day, the DOJ filed its suit, arguing the merger between the country's second- and fourth-largest wireless carriers would “substantially lessen” competition.

“So instead of the story being about job creation, it also became about the DOJ suit,” says Roger Entner, an independent telecoms analyst. “That shows AT&T was completely blindsided by the timing.”

Now AT&T and the DOJ have a court hearing in Washington on September 21, at which District Judge Ellen Segal Huvelle, known for her no-nonsense approach, has told both parties to be prepared to discuss a settlement.

AT&T and Brunswick Group, which is providing PR support on the issue, both declined to comment for this story.

However, AT&T did post its official response to the DOJ lawsuit on www.mobilizeeverything.com, in which, among other things, it pointed out T-Mobile USA is the “only major carrier to have actually lost subscribers in a robustly growing market.”

The argument from AT&T that T-Mobile USA, as “the most expensive cheap carrier,” wasn't adding to the competitive marketplace to begin with has merit, says Entner.

Regardless, “the onus is on the DOJ, because it is up to them to prove the merger would disrupt competition."

Of course, The DOJ will have the help of Sprint, which, like AT&T, has already been making its case in the court of public opinion.

“The DOJ complaint is very thorough and we're confident it will prevail in court, but our complaint is written and told from the perspective of a competitor,” says Taylor. “It also allows us to present evidence directly to the court. If we had not filed this complaint, we would be relying on the DOJ to represent our interest.”

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