It’s been a rough day for those who continue to hold the belief that DoJ and is really planning to settle with AT&T, or that AT&T’s mighty lobbying machine can bring the Antitrust Division to heel. First, White House Chief of Staff Bill Daley, appears to be losing influence. That’s important because cynics and true believers in the unbeatable awesomeness of AT&T’s lobbying have often pointed to Daley’s ties with the business community (and AT&T specifically) and cast him in the role of white knight for AT&T. With Daley apparently in fade out mode, that seems rather unlikely.
But more importantly, at an unrelated hearing, Senator Herb Kohl (D-WI), Chair of the Judiciary Committee, asked Holder whether DoJ was “in it for the long haul.” Holder was about as aggressive as he could possibly be without challenging AT&T CEO Randal Stephenson to ‘meet him outside in the parking lot after the hearing and settle this one-on-one,’ and committing to “do to AT&T and Deutsche Telekom what Joe Frazier did to Muhammad Ali in Madison Square Garden – win a unanimous decision!” According to Reuters, Holder told Kohl that “people in the antitrust division are committed to seeing this through. There is a trial team in place and they are ready and eager to go to court.”
No doubt DT will continue to tell European analysts that Eric Holder is “such a flirt” and this is how we negotiate settlements here in the United States. I also expect that a hardcore contingent will just never believe that AT&T can’t get what it wants in DC by spreading enough PAC money around and rounding up a few more endorsements. But anyone looking at this ought to realize that AT&T is wasting its money on all those commercials promoting the benefits of the merger to try to force a settlement.
AT&T can still prevail in court (although as I noted here and here, events of last week do not inspire much confidence on that front). But anyone thinking AT&T can avoid a trial really needs to wake up and smell the coffee. At this point, either AT&T and DT figure out how to unwind the deal, or bet the long odds that they can prevail. If I were an AT&T or DT stockholder I would definitely prefer Option 1. But as long as AT&T and DT management can spend money that’s not theirs, they will continue to hold out for a miracle.
Stay tuned . . .
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