Over the past few days, the proposed acquisition of T-Mobile by AT&T has seen a potentially devastating letter that shows how much LTE would actually cost AT&T, and how the company is striking back against what they call a 'class-action suit in the guise of arbitration'.

The leaked document was initially reported on Friday by DslReports' Karl Bode, who wrote that "yesterday a partially-redacted document briefly appeared on the FCC website --accidentally posted by a law firm working for AT&T on the $39 billion T-Mobile deal." In essence, the letter states that AT&T would spend only $3.8 billion to increase LTE coverage from 80% to 97%.

AT&T's position to date has been that the acquisition of T-Mobile is necessary for that LTE expansion, but this letter has led a number of observers to point out that AT&T is spending ten times as much for the deal as it needs to reach its stated goals. Additionally, the letter shows that AT&T had decided that even the $3.9 Billion was too expensive to boost LTE coverage to 97% -- and yet the proposal for the $39 Billion deal came only about two weeks afterward.

Attacking a different objection to the deal, AT&T filed suit against its own customers -- namely, some 1,000 who are participating in the recent Bursor & Fisher suit to get AT&T customers to protest the proposed acquisition, using the company's own Arbitration Agreement.

AT&T has stated that "the bottom line here is an arbitrator has no authority to block the merger or affect the merger process in any way. AT&T’s arbitration agreement with our customers — recently upheld by the Supreme Court — allows individual relief for individual claims. Bursor & Fisher is seeking class-wide relief wrapped in the guise of individual arbitration proceedings, which is specifically prohibited by AT&T;s arbitration agreement. Accordingly, the claims are completely without merit. We have filed suit in order to stop this abusive action.”

Sara Yin of PC Magazine spoke to Scott Fisher of Bursor & Fisher, who claimed that the objections had been overruled by the American Arbitration Association and that "AT&T now realizes it faces a substantial likelihood that one or more of these arbitration [cases] will indeed stop the takeover from happening."

 

James Lee Phillips is a Senior Writer & Research Analyst for IBG.com. With offices in Dallas, Las Vegas, and New York, & London, IBG is quickly becoming the leading expert in Internet Marketing, Local Search, SEO, Website Development and Reputation Management. More information can be found at www.ibg.com. Ryan A Nassbridges is an executive officer in sales and marketing. Mr. Nassbridges was awarded CEO of the year for his impeccable guidance and management skills.