Don’t like the prospects of a merger between AT&T and T-Mobile and worried your AT&T bill will increase as a result?  If you are an AT&T on-contract customer, the New York law firm of Bursor & Fisher wants to talk to you.

Scott A. Bursor, the founding partner of the firm, says he wants to represent AT&T customers to help stop the proposed merger, or win significant financial concessions on behalf of those who could face skyrocketing cell phone bills as a result of reduced competition in the marketplace:

AT&T’s $39 billion takeover of T-Mobile would turn back the clock to the era of the Ma Bell monopoly. The deal would give AT&T and Verizon control over 80% of the wireless market, would stifle the competitive market forces that would otherwise help to keep prices down, and would stifle new products and innovation.

AT&T’s claim that the takeover will help improve network quality makes no sense. T-Mobile’s network overlaps almost entirely AT&T’s. And AT&T already has more spectrum than any other company. In most areas, AT&T already holds at least 40 MHz of spectrum it is not even using. AT&T is keeping that spectrum off the market, which prevents competitors from using it to provide better service at lower prices.

Turning back the clock to the Ma Bell monopoly era will allow AT&T and Verizon to dictate what type of phone you can use, how you can use it, and what you will pay. It will destroy competition, leading to higher prices and worse service.

Since AT&T’s wireless contracts specifically prohibit customers from suing the company for any reason, the law firm seeks to pursue the alternative “mandatory arbitration” specified by AT&T in an effort to either derail the merger or force the price much higher.

Customers who retain the law firm on their website can expect the firm to follow four steps that could bring arbitration awards as high as $10,000 per customer:

First, when you sign up, you will receive a confirmation email with a copy of our retainer agreement. We will also provide you with the an email address where you can contact us if you have any questions or concerns about the process.

Second, shortly after you sign up, we will send a letter on your behalf by certified mail to AT&T giving them notice that you intend to file an arbitration seeking to enjoin the takeover of T-Mobile. This is the first hoop you have to jump through to bring an arbitration under the fine print of AT&T’s Arbitration Agreement. We will send you a copy of that letter by email.

Third, if AT&T does not agree to cease and desist from completing the merger within 30 days, we will file a demand for arbitration on your behalf with the American Arbitration Association. The demand will include extensive evidence and legal authority we have gathered to prove that AT&T’s takeover of T-Mobile will harm competition in violation of the Clayton Antitrust Act. We will email you a copy arbitration demand when it is filed.

Fourth, our team of lawyers will litigate your arbitration case aggressively to make sure that your arbitration rights, and your rights under the antitrust laws, are protected. If we are successful, we may seek a $10,000 payment for you.

Bursor

AT&T scoffs at the effort, releasing a statement calling Bursor & Fisher’s actions “completely without merit.” Company officials also claimed arbitrators have no standing to block a corporate merger, hinting the endeavor may be more about winning the law firm a substantial payout than representing the interests of consumers.

Bursor & Fisher are not pursuing AT&T for free.  The attorneys will deduct 50 percent of any award as their contingency fee — a percentage considerably higher than the more common 33-40 percent attorneys usually deduct, and this does not include further reductions to cover any “costs” advanced by the firm.

We found this somewhat curious, considering AT&T’s own arbitration legalese already provides for an attorney premium in their award — twice the amount of any legal fees and reimbursement of expenses.  So deducting an additional 50 percent and taking fees from any consumer awards seems like a case of unfair double-dipping.

But since you are not obligated to pay a cent in fees, anything you might manage to walk away with is more than you started with.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Chaplin Says ATT Margins Punished by IPhone Discounts 7-22-11.mp4[/flv]

Jonathan Chaplin, a director at Credit Suisse Holdings USA Inc., talks about competition between Verizon Communications Inc. and AT&T Inc. for customers for Apple Inc.’s iPhone. AT&T spent much of the last quarter discounting new iPhones down to as little as $50 to keep customers from heading to Verizon Wireless. Chaplin also discusses incoming Verizon Chief Executive Officer Lowell McAdam. He speaks with Emily Chang and Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (5 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/ATT T Mobile Merger.flv[/flv]

Free Press has some fun at AT&T and T-Mobile’s expense with these four video ads opposing the merger.  Of course, the expense is all yours if the merger succeeds in further reducing wireless competition and allowing the all-new AT&T to raise prices even higher.  (3 minutes)

Rest in Peace, AT&T DSL

AT&T CEO Randall Stephenson doesn’t think much of the company’s largest-reaching broadband product – DSL service, telling an audience at the the National Association of Regulatory Utility Commissioners summer seminar in Los Angeles that AT&T developed DSL mostly to compete with Comcast, but “now that’s obsolete.”

That’s a remarkable admission for AT&T, which continues to provide the bulk of its Internet access to consumers over DSL on its copper-wire telephone network.  Comcast spokeswoman Sena Fitzmaurice, in attendance, promptly tweeted the news to her followers: “AT&T CEO — to chase comcast we built dsl, it is obsolete now”

The story from GigaOm’s Stacey Higginbotham only got stranger when an AT&T spokesperson tried to explain away Stephenson’s careless remarks:

Stephenson was answering a question from an audience member about how state regulators should think about new technology cycles when they are considering things like USF. He said that new technology used to be amortized over a 10-15 year period, but that has shrunk to about 5 years now. He said that DSL was introduced in the 1990s, it has been surpassed in speed by U-verse and Comcast’s DOCSIS 3.0. He also gave the example of deploying 3G in 2006 … and now 5 years later we are rolling out 4G. His point was — new technology is being surpassed by the next generation much quicker than ever before. We have millions of customers using DSL and remain fully committed to the technology — even as we constantly look to bring innovation to the marketplace.

That innovation comes mostly from the company’s more advanced DSL platform U-verse, which is only slowly working its way across urban AT&T service areas.  Unfortunately, that service will not likely be forthcoming for AT&T’s rural landline customers, who will be left with “obsolete” DSL service, if available at all, indefinitely.

With an increasing amount of AT&T’s revenue coming from its wireless division, there is little incentive for AT&T to expand DSL service into areas where it is not already sold.  In fact, most of the company’s landline-oriented lobbying has been directed at allowing the company to abandon its “universal service” obligations to provide decent, basic telephone service in rural areas.  The company has already won that deregulation in several of the states it serves, but has given no indication if and/or when it plans to shut off its landline service.

Landline providers hope American consumers will lead the way, as an increasing number disconnect their home phone lines permanently.

More than half of adults between the ages of 25 and 29 reside in wireless-only homes, according to the Federal Communications Commission.

“The number of Americans who rely exclusively on mobile wireless for voice service has increased significantly in recent years,” the FCC said, citing a January-June 2010 National Health Interview Survey.

Unfortunately, rural Americans overwhelmingly receive broadband over that landline network in the form of basic DSL, usually at speeds of 1-3Mbps.  If that network is discontinued, their opportunity for broadband service goes with it.

Phillip "Not Paid by AT&T" Dampier

When asked if the merger of AT&T and T-Mobile will limit customer choice, NAACP’s local executive director Stanley Miller told a Cleveland, Ohio television station, “I don’t think that’s an issue in today’s environment; I think the companies are smarter today and they will make people understand and give them the beneficial services that they’ll need.”

The civil rights group had nothing to say about how much AT&T will charge for these “beneficial services.”

At least WEWS-TV in Cleveland is bothering to ask the question.  Most of America’s television news has either ignored the enormous merger on offer from AT&T and T-Mobile, or didn’t wade much further beyond AT&T’s press release about the “benefits” the merger will bring.  Unfortunately, the television station never bothered to alert viewers to the fact the civil rights group receives substantial financial support from AT&T.

Miller’s performance trying to tout his parent organization’s unqualified support for the merger sent a very clear message to anyone watching NewsChannel 5 — he doesn’t really understand what he is talking about.

On the issue of expanding wireless service into rural Ohio, Miller was left tongue-twisting his way into advocating a monopoly because they’ll be best equipped to get service to those who need it.  That’s a fascinating prospect — a monopoly spending money expanding service where it is unprofitable to provide.  That’s the reason companies like AT&T have ignored rural America, and will continue to do so — merger or not.

Miller (WEWS-TV)

In fact, AT&T’s claim that it needs the network of T-Mobile to stop the persistent problems of dropped calls and slow data service doesn’t make much sense either.  Verizon, AT&T’s closest competitor, doesn’t seem to be suffering those problems, perhaps because it has made investments in upgrades AT&T has avoided.

In California, consumer advocate Jon Fox was taking an equally skeptical look at AT&T’s claims on behalf of CalPIRG, the California Public Interest Research Group.  Fox noted AT&T’s promotion of the merger in his state came at invitation-only cheerleading sessions run by company officials:

Earlier this month, AT&T California President Ken McNeely explained to an invitation-only audience that the proposed merger with T-Mobile will create new jobs, help communities and improve wireless phone service. AT&T preferred not to take questions from the general public on how that vision fits with AT&T’s history of consolidation, layoffs and aggressive market behavior.

Nearly 30 years after regulators broke up AT&T’s unprecedented control over the U.S. wired phone market, consumers are asked to believe that this time things will be different. This notion defies both experience and common sense. Unless significant market regulation is put into place that encourages a competitive wireless arena to flourish, this proposed merger will be bad for consumers, innovation and economic growth.

Fox notes the wireless marketplace in the United States is hardly a paragon of competitiveness today.  If the merger were approved, 76 percent of Americans would receive wireless service from two providers — AT&T and Verizon.  Fox observed America’s next-most-hated conglomerate — the oil and gas industry — wishes it could have that sort of market power.  The top two oil companies in the U.S. have a combined market share of only 24 percent.  America, he notes, wouldn’t tolerate that kind of consolidation in the gasoline market, so why should we tolerate it in the mobile market?

The California Public Interest Research Group

Fox advocates more competition, not less.  He suggests the government force AT&T and Verizon to open their cellular networks to independent third party competitors at fair prices, and let everyone compete.  That could germinate competition that would end the chorus of rate increases from the largest players and allow for innovative pricing plans that don’t force customers into the nearly identical service plans AT&T and Verizon want to force you to accept.  T-Mobile already provides the most innovative pricing in the wireless marketplace, and AT&T is about to swallow that innovation whole.

What ultimately happens to a well-dwarfed Sprint remains an open question, but one many on Wall Street have already answered, suspecting America’s third largest carrier simply won’t be in a position to compete.  Fox thinks the situation is dire when two companies will have a virtual lock on wireless data services Americans increasingly depend on.

That’s not the view of the NAACP, of course.  But then the NAACP is hardly an independent observer, being the recipient of a considerable amount of money and executive talent from AT&T.  That counts for a whole lot more than the rank and file members of the organization, who will be paying the increased prices AT&T has in store for everyone.

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WEWS-TV in Cleveland investigates the ramifications of a merger between AT&T and T-Mobile.  More than 94% of all Ohioans filing comments with FCC oppose the merger, but groups like the NAACP support it.  NewsCenter 5 wanted to find out why.  (3 minutes)