Come on, AT&T (NYSE: T), you can do better than offering to move 5,000 call center jobs to U.S. soil. It's a cleverly timed offer, granted, dangling it before the Obama Administration just as the President attempts to address the country's persistent unemployment crisis. But cleverness aside, 5,000 call center jobs amount to nothing (we have 14 million people unemployed at the moment, by the way) compared to the harm that would befall the mobile phone market and its customers if the government doesn't stop AT&T from buying T-Mobile USA.

It does not appear as though this was a hard call for the Department of Justice, which last Wednesday filed a lawsuit to prevent the $39 billion acquisition from proceeding. With just four national cell phone carriers, the loss of one would certainly reduce competition, lead to higher prices, reduce quality of service and dampen innovation. 

We have seen what happens when telecom carriers don't have to compete for customers. If you need a refresher, just think back on the state of telephony in the decades preceding the 1996 Telecom Act, and then take a look at what has happened since then. The Baby Bells were not inclined to come up with anything new or exciting (or cheaper or faster) when they had the market locked up (and don't forget, AT&T today is really Baby Bell SBC, which renamed itself AT&T after buying Ma Bell in 2005).

Although T-Mobile may not be the No. 1 choice for enterprise IT managers today, it does exert pricing and service quality pressure on AT&T, Verizon (NYSE: VZ) and Sprint Nextel (NYSE: S). What's more, as the Justice Department noted in its complaint, T-Mobile was on its way to becoming a bigger player in the enterprise and government markets. The carrier, which is owned by Deutsche Telekom, stated in its 2011 business plan that it aimed to increase enterprise revenues substantially by 2013. This kind of competitive threat benefits customers of the other national carriers.

The "potential for competitive harm is heightened given T-Mobile's recent decision to grow its market share via a 'challenger' strategy," Justice wrote in its complaint. "Its new aggressive and innovative pricing plans, low-priced smartphones, and superior customer service would have been likely to disrupt current industry models and require competitive responses from the other national players."

AT&T has vowed to fight the Justice Department's case, and at the same time it is reportedly working on ways to win over the anti-trust champions in a settlement. There are any number of conditions that could be imposed on AT&T to try to reduce the competitive damage that would result from the acquisition, but the best way to promote the competition is to keep the largest players from knocking the smaller ones off the field.  

As the Justice Department put it, a new entrant into the mobile phone market at this point "would not be likely, timely, and sufficient" to thwart the harm. With just three players in this line of business, there wouldn't be much of a game to be played. - Caron