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AT&T, T-Mobile Merger Confronted By Unhappy Customers

Jacob Chung |
July 24, 2011 | 8:26 p.m. PDT

Senior Tech Editor

AT&T customers going to court to fight the proposed merger. (credit Brusor & Fisher)
AT&T customers going to court to fight the proposed merger. (credit Brusor & Fisher)
AT&T's drawn-out attempt to buy GSM competitor, T-Mobile, is met with another hurdle. Several AT&T customers unhappy with the proposed acquisition are taking their complaints to court with the help of New York-based law firm Bursor & Fisher. 

Since it was announced in March, the AT&T/T-mobile merger has been met with grief from consumers and mobile competitors alike. Those oppose have cited loss of competition, stifling of innovation and costly services as some of reasons to avoid the merger. The consensus was that the merger would benefit a few while hurting many. 

Undeterred by such concerns, AT&T launched its own campaign in an effort to convince the world the acquisition of T-Mobile would be "Good for consumers, good for competition, [and] good for the country." 

From the Los Angeles Times:

"This transaction will thus benefit consumers by reducing the number of dropped and blocked calls, increasing data speeds and dramatically expanding deployment of next-generation mobile technology."

AT&T says that by adding about 34 million T-Mobile subscribers to AT&T's 96 million-strong customer base, this will "create new jobs and economic growth in the small towns and rural communities that need them most."

Moreover, the merger would "leave the wireless marketplace fiercely competitive" and "intensify broadband competition throughout the United States."

Unsurprisingly, not many mobile users or analysts bought what AT&T was selling. 

In fact, attorneys from Bursor & Fisher say AT&T's purchase of T-Mobile would be in violation of current law--Clayton Antitrust Act--which protects harm to competition. But, in order to fight the merger, the Bursor & Fisher will have to file arbitration for AT&T customers individually because current AT&T contract prohibits customers to sue AT&T directly. 


In its contracts, AT&T prohibits customers from suing the company directly or as part of a class-action lawsuit. A U.S. Supreme court decision in April upheld this practice. Instead, consumers must use an arbitration process. But consumers are also prohibited from filing arbitration as a group or class and instead must file claims individually, which is why Bursor has said the company will file hundreds of these claims.

And because each arbitration request is assigned to a separate judge, each case will be evaluated independently, which in theory could increase the chances of a beneficial outcome for the customers filing the complaint.

So far, the New York law firm is working with 11 AT&T customers on the grounds these customers, "could suffer higher prices and inferior service as a result of the merger," as reported by SlashGear.

Interested in joining this fight? The Bursor & Fisher group has set up a quick an easy way to get involved.

As for now, both the Department of Justice and the Federal Communications Commission are invested in reviewing the merger in order to ensure against any potential antitrust claims and harm to the public interest.



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