I need 2 responses to each student discussion board post. Please keep separate and in order. APA format Please keep in order and 150 min towards each student response. Turnitin is being used to check for plagiarism.
Devin Marks
XXXXXXXXXXJan 31, 2019 Jan 31 at 2:01pm
In 2011 phone giant AT&T made its attempt to merge with T-Mobile who at the time was the fourth largest cell phone provider. This merger could have had a significant effect on the cell phone market had it been allowed to move forward. At that time Verizon was and still is the largest provider of cell service. AT&T was second and T-Mobile 4the. The issue with this merger that I believe raised the red flag for the Justice Department regarding the antitrust laws was that this would have made AT&T the largest cell phone provider by far as well as it would have eliminated a much more competitive and aggressive priced plans that T-Mobile was offering. The Sherman antitrust act dissuaded this kind of attempt to create Monopolies. “While the states and the federal government both regulate and punish anti-competitive practices, it is the federal government that regulates anticompetitive practices that can impact interstate commerce, primarily through the Sherman Antitrust Act of 1890 and the Clayton Act of 1914 as amended” (Seaquist, 2012).
At that time their prices were 15-50 dollars less across the board than AT&T. If they had been allowed to make this merger, this positively could have affected millions of current T-Mobile customers and allowed AT&T to not only increase its revenue but then receive a considerable windfall if it were to bring all of the T-Mobile customers pricing to the point of AT&T’s current customer base.
One of the major concerns that are addressed by the Antitrust act is the idea that companies may merge or buy other companies put and then, in turn, create a Monopoly. Monopolies in most cases are genuinely beneficial for stockholders or owners but rarely benefit the customer. In this instance had AT&T and T-Mobile been allowed to complete this transaction it may have created such an unfair advantage over Verizon that it could have eventually pushed Verizon out.
I believe that the Justice Department stepped in correctly in this case due to the fact that the consumer was going to take the brunt of this merger. The other effect this merger would have is that it would drastically affect the smaller providers below the likes of Sprint Nextel, and take away any competitive options for consumers (Besen, Kletter, Moresi, Salop, Woodbury, XXXXXXXXXXThe idea that this could take the cell phone industry down to just two companies certainly felt like on paper a reality. When we fast forward to today we now have the two smaller companies of Sprint and T-Mobile on the verge of completing a merger and the difference between this one and the AT&T merger is that Sprint and T-Mobile even when alliance will still not be larger than either Verizon or AT&T. This also makes the marketplace more competitive.
References
Besen, S. M., Kletter, S. D., Moresi, S. X., Salop, S. C., & Woodbury, J. R XXXXXXXXXXAn Economic Analysis of the AT&T-T-Mobile USA Wireless Merger. Journal of Competition Law and Economics, 9(1), 23–47. https://doi-org.proxy-library.ashford.edu/https://academic.oup.com/jcle/issue
Moritz, S. (2011, December 20). AT&T pulls $39 billion T-Mobile bid. Retrieved January 31, 2019, from https://www.deseretnews.com/article/ XXXXXXXXXX/ATT-pulls-39-billion-T-Mobile-bid.html
Brenda Whitcomballan
XXXXXXXXXX:06am Feb 19 at 9:06am
The AT&T attempted merger with T-mobile appeared to violate antitrust law. The Herfindahl-Hirschman Index (HHI) calculation failed to meet the first step in the calculating the “deal’s effect on competition” (Stewart, XXXXXXXXXXThe HHI scores industries “on a scale up to 10,000, with 10,000 being a perfect monopoly” (Stewart, XXXXXXXXXXObama’s administration had raised the guidelines to an HHI score of 2,500 or higher to signify a “concentrated industry” and a “merger that increased the score” by 200 “was presumed to raise anticompetitive concerns”(Stewart, XXXXXXXXXXStewart further explains that in “all the top 40 markets, the increase exceeds the guideline limit of 200”. Deputy Attorney General James M. Cole was quoted to say that the merger "would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services," (No Justice, 2011). “AT&T, T-Mobile, Verizon, and Sprint - provide more than 90 percent of service connections to U.S. mobile wireless devices” and the merger would have taken out the “maverick competitor,” considered to be the primary competitor on price” (Stewart, XXXXXXXXXXOpponents question use of the HHI as an ‘ancient market-share model”(No justice, 2011) and that the merger would still leave consumers with 4-5 choices without making it difficult for new competition to enter the market. (No Justice, XXXXXXXXXXThose opinions could have been correct, however, the existing framework to identify antitrust violations clearly.
No justice for cellphone users; antitrust fantasies kill the merger between AT&T and T-Mobile XXXXXXXXXXThe Wall Street Journal Eastern Edition. Retrieved from http://search.ebscohost.com.proxy-library.ashford.edu/login.aspx?direct=true&db=edsbig&AN=edsbig.A XXXXXXXXXX&site=eds-live&scope=site
Seaquist, G. (2012).Business law for managers[Electronic version]. Retrieved fromhttps://content.ashford.edu/
Stewart, J. (2011, September 09). AT&T and T-Mobile Merger Is a Textbook Case - Common Sense. Retrieved February 18, 2019, from
Rubrics/Marking Guidelines :
I need 2 responses to each student discussion board post. Please keep separate and in order. APA format Please keep in order and 150 min towards each student response. Turnitin is being used to check for plagiarism.