In case you may have missed it in the past few days, the scuffling of parties promoting or disparaging the AT&T (News - Alert) deal to merge with T-Mobile is taking on some strange twists above and beyond the typical competitive bickering. As the deal works its way through regulatory reviews, attempts to influence the process have intensified. First came the recent rollout of the AT&T commercials touting the deal’s supposed benefits. Now we have the law firm Bursor & Fisher, P.A. using the prospect of a $10,000 arbitration payment to every AT&T customer as bait to get them to generate enough havoc to kill the deal.  Is this an updated Saturday Night Live recurring comedy skit, “What’s up with that?”

Let me start the answer with full disclosure. I am not a lawyer. In fact, I don’t play one on TV or pass myself off as one on the Internet. However, there are days when I wish I had a law degree just to cash in on the communications and IT industries alone. Just following the battles over the intellectual property involving the Android (News - Alert) OS is a full time endeavor. And, today I posted an article on TruePosition filing and antitrust complaint against Ericsson (News - Alert), Alcatel-Lucent and Qualcomm over an alleged conspiracy to stop TruePosition’s mobile positioning technology from becoming part of the 4G LTE standard. In fact, I highly recommend TMCnet.com Legal as must reading.

Back to Bursor & Fisher and the AT&T/T-Mobile (News - Alert) imbroglio. Give these guys and A for creativity. They have launched a website, fightthemerger.com. The goal is to recruit individual AT&T customers who they say will suffer if the merger goes through, by alerting them to the possibility that forcing AT&T into arbitration as proscribed in AT&T’s wireless customer agreement could end up with a $10,000 payout.  Ingenious! Flood the legal system with arbitration cases thereby forcing AT&T to conclude the deal is not worth the cost or aggravation. 

The firm makes a couple of points:

• It has years litigating class actions against AT&T and the validity of AT&T's Arbitration Agreement.
• Customers cannot sue the carrier collectively to enjoin the merger and must "resolve disputes with AT&T on an individual basis, through mandatory arbitration."
• AT&T's arbitration agreement states that the carrier will make payments to customers of $10,000 or more if an arbitrator rules in their favor. This will result in AT&T having to "pay your attorney, if any, twice the amount of attorneys' fees, and reimburse any expenses."

In other words, the lawyers are literally banking on winning a few arbitration rulings to create a tidal wave because customer risk is mitigated by expenses being paid. 

Here is a surprise. AT&T has responded with the following language to those covering this dust up:     

The claims made by the Bursor & Fisher Law Firm are completely without merit. An arbitrator has no authority to block the merger or affect the merger process in any way. Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner.

Big Deal?

At $39 billion, the merger is a big deal on lots of scores, and has drawn fire from a broad coalition of competitors and consumer groups. Whether this latest tactic is a big deal and can be a deal breaker is problematic. However, trying to understand the logic behind what must be an expensive ad campaign by AT&T, especially given its immense pr and lobbying resources, has me puzzled as well. Even if I was a very satisfied AT&T customer, there seems little compelling in the call to action in the ads to make we do anything other than only care about hitting mute or changing the channel. We certainly live in interesting times. 

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom (News - Alert), and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.