Merge of AT&T and T-MobileAT&T (T) is threatening to become the T-Rex of the wireless world. That's not a toothless claim: Sprint Nextel (S), the third largest wireless carrier, says it doubts it could survive if AT&T pushes its T-Mobile acquisition through the Federal Communications Commission and Department of Justice antitrust vetting process. That deal would drop the present No. 1 carrier Verizon (VZ) into second place behind the new king of the wireless world, AT&T. But the idea of AT&T and Verizon owning 80% of U.S. cellphone contracts has created concern outside of Sprint Nextel.

Attorneys general in nine states have started investigations into the proposed merger, with New York's AG saying he wants to make sure it would not have an anticompetitive effect. Individual consumers are also apprehensive and have bombarded the FCC with their uneasiness about reduced wireless choices.

Losing Trust in the Antitrust Process

The merger may also face a backlash from events surrounding Comcast's (CMCSA) recent purchase of NBC Universal. FCC Commissioner Meredith Baker voted to approve that merger last January. In May, she resigned to take a management position with Comcast-NBC Universal. That action has done nothing to increase faith in the evenhandedness of the antitrust process.

Then there's the outgoing Justice Department antitrust head Christine Varney -- a President Barack Obama appointee -- who has signed off on all major mergers that have come before her. Those have included the Comcast-NBC Universal deal as well as United Airlines' (UAL) acquisition of Continental. Even though the president does not review corporate mergers, public interest groups have denounced the Obama administration as going too easy on those corporate meldings.

Will the Merger Create Jobs or Destroy Them?

Supporters of the purchase include the Communications Workers of America, the largest of the communications industry unions. It says the merger would create 100,000 new jobs, quite an accomplishment in this job-starved economy.

But critics such as the American Antitrust Institute dispute that outcome. They say mergers always mean a loss of redundant positions and this one would be no different.

The only thing certain with this deal seems to be the uncertainty of T-Mobile's future. As such, many independent T-Mobile dealers are not waiting for the ax to fall and have been closing up shop. More than half of AT&T's retail locations are within a mile of a T-Mobile store, which is a redundancy that should prove unnecessary after the merger.

The shuttering of possibly hundreds of T-Mobile operations would also add to the number of empty storefronts across America. The shopping center vacancy rate is now more than 10%, the highest in 20 years. Clearly, there's more at stake here than a marriage of two companies.
Motley Fool contributor Dan Radovsky owns shares in AT&T. Motley Fool newsletter services have recommended buying shares of AT&T.

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No matter who's bigger I still need Verizon. I had AT&T when I moved but the service was horrible in my area. My roommate has Sprint and has the same problem. I switched to Verizon and have had no problems. AT&T can merge with Taco Bell for all I care... I still need Verizon.

July 16 2011 at 2:07 PM Report abuse rate up rate down Reply

After being with Verizon (bell Atlantic and all the other prior names) for close to 20 years I told Verizon to ^%$#& off. They would not do anything to try to keep me as a customer. That and thier customer service stinks, you get a different answer each time you call. The last straw was getting yelled at by a customer service re at the verizon store. She was still yelling at me as I walked out the door. And across the street I went AT&T. So far I am happier that I have ever been with Verizon. So I would love to see Verizon drop to number 2, Even though the merger does kinda limit the choices of carriers. The merger must be looked at VERY closely.

July 15 2011 at 9:56 AM Report abuse rate up rate down Reply

All the richmans horses & all the richmans money are slowly putting ole Ma Bell back together again!!!

July 15 2011 at 6:42 AM Report abuse +1 rate up rate down Reply

What is interesting is that FCC official who after approving the Comcast NBC merger got a management position with them. She needs to be fined and forced to resign from Comcast. That pisses me off!!

July 15 2011 at 6:39 AM Report abuse rate up rate down Reply

Would an AT&T/T-Mobile merger be anti-competitive? That, for anyone with a brain, is a no-brainer! Would it create 100,000 new jobs? Not in this lifetime. Should it be allowed to proceed. Not on your life! Wake up and smell the coffee, folks. AT&T and Verizon already monopolize the cell phone business. We must stop them from eliminating the small bits and pieces of competition that remain.

July 15 2011 at 6:13 AM Report abuse +3 rate up rate down Reply

the only reason why sprint is bitching is because they didn't have 39 billion in pocket change like at&t had. they lost fair and square, Deutsche Telekom gave there price sprint was short and at&t had the $. don't be naive everything today is about money. at&t and t-mobile both use gsm so it's easy for at&t to crumple them and use them for parts. i'm sure at&t is stacking up there lobbyists and paying off people to vote for them. were in america get use to it. all is fair in love and war.

July 14 2011 at 10:19 PM Report abuse +1 rate up rate down Reply
1 reply to heatman92's comment

But this, heatman92, is neither love nor war. It is capitalism and it requires restraining because capitalism is greed driven and the greed of AT&T is not good for the American people. The greed of corporations to grow and grow and grow until they have swallowed up all competition is not good for capitalism either, in the long run. The time to put a stop to AT&T's greed is now.

July 15 2011 at 6:17 AM Report abuse +2 rate up rate down Reply

I have T-Mobile and love my service, have had it for 6-7 years now, maybe longer. I had AT&T for the 2 year contract and it was 1 day too long! It sucked! I cancelled my service the day my contract expired. I am no longer locked into a contract with T-mobile. I would and will cancel service immediately if AT&T aquires T-mbile. I don't ever want anything to do with AT&T again!

July 14 2011 at 10:03 PM Report abuse rate up rate down Reply
1 reply to Felix's comment

Felix I am so with you on this. I hate AT&T with a passion. I had a business landline with them...long horrible story. What are our choices?? Verizon? Sprint? They all suck.

July 15 2011 at 6:08 AM Report abuse rate up rate down Reply

Dont go to the Huntington Indiana ATT store.....they are complete idiots there, screw things up, lie, and use cuss words at you to let you know they dont like when you inquire about the refund they own you. Pathetic

July 14 2011 at 9:20 PM Report abuse rate up rate down Reply

THERE ARE SOME OTHERS, who know you are telling the truth . From The Now Deceased, Victor Posner, Jack Welch, and many others, who were corporate raiders from the Twentieth Century, the stats shows much different . Mergers were going to and did spell disaster, for many workers . This one bears the same, if not a larger pattern, which proves effectively there will be positions, jobs, and careers short lived, given the go ahead with this monster merger .
There has been far more progress with the baby bells, than before deregulations played it part .

I am almost certain there are some anti trust laws that are being hedged or possibly overlooked for this to have even gotten this far . This is a no win situation, for some current employees, of both companies . Additionally, how does the management team of the giant, ( AT&T ) prove prior to ? After the merger there will be a creation of 10,000, new full time positions with benefits, without layoffs, elsewhere here in America . Retaining all current employees from both companies, and new hires, for a five year vesting period .

July 14 2011 at 8:46 PM Report abuse rate up rate down Reply
1 reply to Davis10Oregon1's comment

AT&T's proposed merger is already costing jobs. It certainly will not create the promised new ones. This merger must be stopped.

July 15 2011 at 6:19 AM Report abuse rate up rate down Reply

I have T-Mobile and have had great customer service over the years -- we first had Voice Stream which covered seven states in Middle America. I would love to see the deal fall through.

July 14 2011 at 7:33 PM Report abuse rate up rate down Reply