AT&T sues its own customers over T-Mobile US merger

AGGRESSIVE TELECOMS PROVIDER AT&T has resorted to a new form of persuasion in its bid to complete a merger with T-Mobile US by suing its own customers.

Since AT&T announced its plans to merge with T-Mobile US, there has been heated debate as to whether the merger will be good for US consumers. Some argue that should the deal go ahead many parts of the US will be left with a single mobile operator, which could result in poor service and higher costs.

So it is not surprising that the law firms Bursor and Fisher and Faruqi and Faruqi have managed to get hundreds of "notices of dispute" and arbitration demands from AT&T customers. Now AT&T has turned around and decided to sue the firms representing its own customers, saying they are "taking a thousand bites at the apple".

AT&T's belief is that arbitration cannot decide claims that were brought under antitrust laws. It's a surprising U-turn from last year, according to Reuters, which reports that in November 2010 AT&T argued in favour of arbitration in a US Supreme Court case.

Scott Bursor, the lawyer behind the "Fight the Merger" campaign told Reuters, "AT&T's filing of these lawsuits appears to be an act of desperation, since AT&T now realises it faces substantial likelihood that one or more of these arbitrations will stop the takeover from happening," adding that AT&T's legal arguments are "frivolous."

AT&T claims that a merger with T-Mobile US will allow it to provide better service and make use of T-Mobile's network to extend its coverage. The problem is that many still remember the bad old days of 'Ma Bell', a nationwide monopoly of telecoms services that had to be forcibly broken up by the courts, and are sceptical at AT&T's claims of a brighter future.

AT&T's decision to turn around and sue its customers who are currently paying it money is a shocking move, perhaps made worse by the hypocrisy in AT&T's argument. Richard Brunell, director of legal advocacy at the American Antitrust Institute, told Reuters that AT&T's lawsuit is "ironic" because it had argued in favour of arbitration itself only last year. It is starting to look like AT&T's view on what is a suitable venue for judgement depends on where it believes it holds the best chance of winning a favourable outcome.

While AT&T's mobile operation is largely a US concern, the firm is a Tier-1 internet transit provider and, due to the explosion in mobile data, poor investment in its core network infrastructure allowed by a lack of competition might have wide reaching consequences.

Perhaps the biggest irony is that those AT&T customers that it is suing are inadvertently paying AT&T's lawyers to attempt to discredit them. µ