Bad AT&T Deal Disconnected: Consumer Watchdog Applauds Justice Department for Filing Complaint to Block AT&T/T-Mobile Merger

SANTA MONICA, Calif., Aug. 31, 2011 /PRNewswire-USNewswire/ -- Consumer Watchdog applauded the U.S. Justice Department today for filing a civil antitrust complaint to block the AT&T/T-Mobile Merger, calling it a victory for cell phone consumers, and urged the Federal Communications Commission to reject the deal as well.

Earlier this month, Consumer Watchdog wrote a letter to the U.S. Department of Justice, the Federal Communications Commission, and the California Public Utilities Commission, pointing out that the very same promises of better services and cheaper prices that AT&T makes today it also made back in 2004, when it sought permission to merge with Cingular, only to betray those promises after federal officials approved the deal.

Consumer Watchdog's letter calls attention to the negative impacts that the 2004 merger had on consumers:

"After the Federal Communications Commission approved the deal with negligible scrutiny, the newly merged company - which later renamed itself AT&T Mobility LLC- betrayed its promises. It abandoned the old AT&T network, deliberately degrading the network so that AT&T customers would be forced to migrate to Cingular's own network, pay an upgrade fee of $18, buy new phones and agree to new and more expensive rate plans. These anti-consumer moves were enforced by an anti-competitive 'early termination fee' of anywhere between $175 and $400, which prevented customers of AT&T from moving to another carrier.

"In short, AT&T policyholders were railroaded into spending hundreds of dollars more in order to maintain their cellular service - a colossal rip-off by the same corporate executives who are now asking for permission to do it all over again."

Read Consumer Watchdog's letter opposing the AT/T-Mobile merger here: http://www.consumerwatchdog.org/resources/cwd_att_merger_letter_final.pdf

Consumer Watchdog's lawyers subsequently brought a nationwide class action lawsuit against AT&T in 2006 seeking refunds for AT&T's customers. AT&T continues to fight that lawsuit, claiming that its customers are barred from suing AT&T in courts and must take their dispute to secret arbitration panels paid for by AT&T.

The Justice Department's complaint seeks a declaration that AT&T's proposed acquisition of T-Mobile would violate U.S. antitrust law. Upon making the announcement, Justice Department officials said the deal would result in reduced competition which would in turn lead to higher prices, poor wireless service quality, and less choices for consumers.

"The last thing beleaguered American consumers need right now is higher prices and shoddier cell phone service. That's exactly what would happen if AT&T was permitted to buy T-Mobile. The FCC should join DOJ in opposing this anti-competitive proposal," said Harvey Rosenfield, founder of Consumer Watchdog and one of the lawyers in the 2006 lawsuit against AT&T.

Consumer Watchdog is a non-partisan public interest organization with offices in Santa Monica, CA and Washington, D.C. For more information, visit us on the web at http://www.ConsumerWatchdog.org

SOURCE Consumer Watchdog