Law firm rallies AT&T customers to block T-Mobile merger

Editor’s Note: The following article is reprinted from Network World.

Law firm Bursor & Fisher wants AT&T customers to help it stop the AT&T-T-Mobile merger and is using the prospect of a $10,000 arbitration payment to bring people onboard.

The firm has set up a website, fightthemerger.com, aimed at recruiting AT&T customers whom the firm claims will be adversely affected by the proposed merger. The firm claims that it has already initiated “dozens” of arbitrations on behalf of clients and it says that if its arbitration efforts are successful, “we may be able to seek a $10,000 payment for every one of our customers.”

Bursor & Fisher notes that due to the terms of AT&T’s wireless customer agreement, customers cannot sue the carrier collectively in federal court to enjoin the merger and must “resolve disputes with AT&T on an individual basis, through mandatory arbitration.” The firm claims that it has “spent years litigating class actions against AT&T, and litigating the validity of AT&T’s Arbitration Agreement,” thus giving it first-hand experience in battling the carrier in arbitration hearings.

AT&T’s arbitration agreement states that the carrier will make payments to customers of $10,000 or more if an arbitrator rules in their favor. The company will also “pay your attorney, if any, twice the amount of attorneys’ fees, and reimburse any expenses” related to preparing for the arbitration claim.

Although Bursor & Fisher doesn’t get into specifics about what its strategy during arbitration hearings will be, it does make a broad case on its website that the proposed merger will allegedly “stifle the competitive market forces that would otherwise help keep prices down” and also “stifle new products and innovation.” In other words, part of the firm’s case may rest upon the determination that less competition in the wireless market will raise prices on services and thus harm consumer welfare. AT&T has dismissed the firm’s effort by releasing a statement calling the firm’s actions “without merit” and claiming that arbitrators would not have the authority to enjoin the merger.

Many critics of the proposed $39 billion merger, which AT&T and T-Mobile announced this past spring, have contended that it would at the very least lead to the emergence of a duopolistic wireless telecom market controlled largely by Verizon and AT&T. Opposition to the proposed merger has united both consumer advocacy groups such as the Consumers Union and rival wireless carriers such as Sprint. Sprint CEO Dan Hesse argued that the newly merged wireless company would have “tremendous” power over the wireless market and would be bad for consumers.

Provided it passes regulatory muster, AT&T’s T-Mobile acquisition will be the fourth major wireless carrier merger in eight years, following AT&T-Cingular in 2004, Sprint-Nextel in 2005, and Verizon-Alltel in 2008. AT&T would become by far the largest wireless carrier in the United States with more than 130 million subscribers.

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