Friday, July 13, 2012
Posted by D. Daniel Sokol
Stanley M. Besen, Charles River Associates (CRA), Stephen Kletter, Charles River Associates (CRA), Serge Moresi, Charles River Associates (CRA), Steven C. Salop, Georgetown University Law Center, and John Woodbury, Charles River Associates (CRA) provide An Economic Analysis of the AT&T-T-Mobile USA Wireless Merger.
ABSTRACT: On March 20, 2011, wireless provider AT&T announced its intention to merge with T-Mobile USA, a competing wireless provider. This article reviews the economic analysis of this proposed acquisition that we carried out for Sprint and explains why the merger would have been anticompetitive. We analyze how the merger would have led to adverse unilateral, coordinated and exclusionary effects. AT&T and T-Mobile contended that their proposed merger would not adversely affect competition in wireless services because T-Mobile USA was not an effective rival, because other wireless providers could easily replace any competition that was lost as a result of the merger, and because the efficiencies from the merger would be so substantial that they would dwarf any perceived anticompetitive effects. Our analysis concludes that AT&T failed to provide convincing evidence of the lack of anticompetitive effects and failed to adequately document the claimed efficiencies in a manner consistent with the Horizontal Merger Guidelines.