T-Mobile Re-emerges as Vibrant Competitor, Justice Unafraid to Litigate, Pozen Says

The agency seeks to focus its resources on “pocketbook” industries -- those sectors where threats to competition could have a great impact on family budgets, Pozen said. These include telecom and other high-tech services, she said. Pozen is resigning at the end of April to return to private law practice. Joe Wayland, currently deputy assistant attorney general in the division, will take over as acting assistant attorney general, DOJ had said.

T-Mobile announced a $4 billion investment to modernize its network and deploy LTE services in late February, just two months after AT&T abandoned its acquisition, Pozen said. The carrier also plans to aggressively pursue business customers, expand its sales force, ramp up ad spending and remodel its retail stores, she said. “Undue concentration” was a looming threat to competition in some telecom markets, she said. The AT&T/T-Mobile deal would have combined two of only four national carriers and it would have eliminated an important source of competition and innovation, Pozen said. The deal would have resulted in higher prices, lower quality services, fewer choices and less innovative products, she said: It’s a transaction that would have “profoundly harmed consumers.” Deal supporters had claimed it would enable more efficient use of spectrum, improve service quality and allow an expanded LTE network.

DOJ relies heavily on the FCC when dealing with spectrum issues, Pozen said. In merger scenarios, the agency looks at things like the merging companies’ spectrum availability and their plans to acquire more spectrum, she said. In the AT&T/T-Mobile case, while AT&T said the deal would provide the spectrum it needs, there are other ways to acquire spectrum other than taking a major competitor out of the market, she said. In the absence of a spectrum auction, carriers like AT&T sought acquisition to get more spectrum, AT&T CEO Randall Stephenson had said, saying the industry is “stuck” in adding more capacity (CD Jan 27 p3).

Meanwhile, Justice’s proposed remedy in the ebook price-fixing case targeting Apple and publishers demonstrates that the antitrust laws are flexible and can keep pace with technology and a rapidly changing industry, Pozen said. The agency recently sued Apple and five publishers for an alleged conspiracy that it said led to higher prices for ebooks. Three of the publishers entered into a settlement with Justice, which would require them to grant retailers like Amazon the freedom to reduce prices on their ebook titles. Justice’s settlements with the three publishers have a five-year term with a two-year “cooling off” period, balancing the need to ensure competition is restored with not inhibiting its growth and innovation, Pozen said.

Antitrust enforcement remains critical in the interaction between competition law and intellectual property law, Pozen said. She cited Google’s agreement to buy Motorola, transfer of certain Nortel Networks patents to a number of high-tech companies in separate deals and the acquisition by Apple of some Novell patents. The agency especially was concerned about certain “standard essential patents” that Motorola and Nortel had pledged to license to industry participants as part of their participation in standard-setting organizations, Pozen said. The Antitrust Division she heads ultimately concluded that none of these transactions was likely to substantially lessen competition in any relevant market and it announced its closure of these investigations in February.