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Justice sends clear signal to AT&T: No more T's

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The Justice Department’s decision to sue to disconnect the conversation between AT&T and T-Mobile is being hailed by many consumer advocates as a victory for competition even as it comes at a potential cost of $3 billion to the company formerly known as Ma Bell.

The move to quash the $39 billion deal also signals a more aggressive posture by the Obama administration to tamp down these mega-mergers that were hailed by the previous White House occupant as good for the free enterprise system.

Justice Department officials say the key to their decision is the threat to consumer choice if AT&T adds a T. It’s a legitimate concern, even in a state as metropolitan and technologically savvy as Massachusetts.

In the Spring issue, CommonWealth had a map that showed the availability of all five major cell phone carriers across the state, which counts Sprint and Nextel separately. East of Route 128, all five carriers were available to 97 percent of the population but the further west you travel, the less options there are. In the Berkshires, only 55 percent of the population can choose any of the five while about 20,000 customers, mainly out west, have just one carrier to choose from. Adding T-Mobile to the AT&T family would have reduced that even more while creating the nation’s biggest cell company.

AT&T may have thought its road to behemoth status would be easily traversed, prompting them to pledge a $3 billion payment to T-Mobile’s German owner Deutsche Telekom if the merger failed. And with that kind of coin on the line, AT&T will likely not give in without a fight.

But the telecom may have been hoisted on its own petard. In 2009, when Google was in the midst of joining with Yahoo, AT&T used its influence in Congress and elsewhere to block the merger. Industry observers say AT&T was eyeing its own entry into the online ad business and a gargantuan such as Goo-Hoo would have made their efforts Herculean.

Many of those same arguments are now coming home to roost in the Justice planned suit against the AT&T merger.

The Justice suit also begets the question of whether this is a waking tiger that is forcefully defending the nation’s consumers or if it’s low-hanging fruit in the run-up to an election where President Obama is positioning himself as champion of the little guy.

The Justice Department under Obama turned its head while Exxon gobbled up XTO Energy in a $30 billion takeover but used the threat of a suit to extract concessions from Comcast before allowing the takeover of NBC Universal. In May, the department filed suit against H&R Block in its attempt to buy a tax software developer for $287.5 million.

It’s an uneven record with mixed messages for the antitrust division’s top enforcer, Christine Varney, a former Internet lobbyist and a top official at the Federal Trade Commission.

One thing is certain, though: They can hear her now.

                                                                                                                                                            --JACK SULLIVAN 


BEACON HILL

State Treasurer Steve Grossman says the state will save about $1 million a year over the next three years after his office put four banking services contracts out for competitive bidding.

Grossman endorses a plan to cap the number of liquor licenses in Lawrence and enforce 1 a.m. closing times, but he says the Lawrence Licensing Board must enact the changes. The Eagle-Tribune has the story.

State Auditor Suzanne Bump tells the Lowell Sun spending problems at special needs educational collaboratives are not isolated. She also wants the Legislature to give her the authority to audit any organization – even nongovernmental entities – that spend public money. NECN’s Jim Braude talks to Bump. To read the audits and Bump’s proposed reforms, go to CommonWealth.  

The liquor license of a Tyngsboro bar is suspended for 11 days after investigators from the Alcoholic Beverages Control Commission played there on video poker machines, the Lowell Sun reports.

The Berkshire Eagle says Sal DiMasi should do “serious time” for his “serious crimes.”

State Rep. Will Brownsberger, who signed a letter criticizing House Speaker Robert DeLeo’s leadership last year, will run for the state Senate seat being vacated by Steven Tolman.

Joe Battenfeld says he has three reasons why Joe Kennedy II should run for governor in 2014, and they’re named Tim Murray, Steve Grossman and Suzanne Bump. “Does anyone want to see that primary race?” the Herald columnist asks.

IRENE

Rivers begin to recede in western Mass., and Vermont continues to clean up after its 100-year floods. The town of Adams tries to figure out how to gain access to a part of the community cut off by a mudslide. National Grid says 70,000 Bay State customers are still without power, down from 500,000 at the outage peak on Sunday. The MetroWest Daily News echoes the growing complaints that both NStar and National Grid need to work on their communications skills after municipal officials complained that they didn’t get the cooperation they needed from the utilities.

MUNICIPAL MATTERS

Bridgewater’s town manager says he will explore switching from National Grid as the power supplier for the town’s residents after the utility’s performance after the weekend’s storm.

NATIONAL POLITICS/WASHINGTON

President Obama gives in to Republican pressure and moves his post Labor Day jobs address from Tuesday to Wednesday.

ELECTION 2012

The Daily Beast reports on a jobs headache with Boeing that could plague President Obama heading into election season.

Mitt Romney is not exactly being welcomed with open arms by tea partiers, the Globe reports.
Some tea party groups launch a boycott of Romney appearances. It might be a little late to start courting the movement; but Romney has no choice given the surge by Rick Perry. Meanwhile, Perry says there are no skeletons in his closet. Oh, and there’s absolutely no bad blood between Perry and former President George W. Bush, which is why former Bush speechwriter David Frum is gleefully spreading around that recent story about Perry’s amazing real estate acumen.

Jon Huntsman continues to tilt at windmills, this time encouraging Congress to strip deductions and loopholes from the tax code.

The Service Employees International Union, which fought against corporations being able to spend unlimited sums in political campaigns, is ramping up its spending on ads to take down Scott Brown.

BUSINESS/ECONOMY

Foreclosures in Massachusetts increased in July.

The tortuous transfer of the land at the closed South Weymouth Naval Air Base, which is being developed for housing, offices and biotech, inched one step closer to finalization when Navy officials and the agency overseeing the conversion signed a deal to get a deal by Nov. 15.

EDUCATION

At Bridgewater State and Salem State universities, students are returning to campuses that are now completely smoke free -- indoors and out. North Shore Community College is set to join them on January 1, the Lynn Item reports. Framingham State opens a new residence hall.

The moratorium on federal earmarks is hitting Massachusetts colleges and universities hard, the Globe reports.

We have a financial literary crisis among college students, reports the Daily Beast.

Former DC Public Schools Chancellor Michelle Rhee offers some observations on education after her appearance at an annual summer forum on Martha’s Vineyard.

A Michigan GOP lawmaker wants to privatize public school teaching.

With the first snowflakes still a few months away, several South Shore towns have already extended their school years because of opening delays caused by Irene.

California is poised to pass the politically-charged Dream Act.

ENERGY/ENVIRONMENT

The Newton Tab interviews Department of Environmental Protection Commissioner Kenneth Kimmel.

Evergreen isn’t alone. Solyndra, a California solar panel maker that received $535 million in federal loans, shuts down and plans to file a Chapter 11 bankruptcy, the Washington Post reports.

A 2-megawatt solar plant will save Pittsfield about $2 million on town energy bills.

CRIMINAL JUSTICE

President Obama’s uncle will fight deportation proceedings after his arrest on drunken driving charges. In an editorial, the Globe says if he’s convicted of the charges he should be deported to Kenya.

Popsicles help keep the peace at the overcrowded Middlesex jail in Cambridge, WBUR reports.

MEDIA

Time interviews Stanford Law professor Ralph Richard Banks about his new book, Is Marriage for White People? With 70 percent of black children born to unwed mothers, Banks suggests black women should look beyond their race for marriage partners.

Radio Boston interviews Caryl Rivers and Rosalind Barnett, coauthors of The Truth about Girls and Boys: Challenging Toxic Stereotypes About Our Children.

Forget the newspaper. The New York Times is working on a bathroom mirror that can give you your headlines while you brush your teeth, reports the Nieman Journalism Lab.

 

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