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Justice Dept. Sues To Block AT&T’s Acquisition Of T-Mobile

Filed by KOSU News in Business.
August 31, 2011

The Justice Department just confirmed that it has “filed a civil antitrust lawsuit to block AT&T Inc.’s proposed acquisition of T-Mobile USA Inc.”

In the department’s view, “the proposed $39 billion transaction would substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives.”

The suit has been filed in U.S. District Court for the District of Columbia.

There’s no response yet from the companies.

Earlier today, Morning Edition reported that AT&T, in one bid to convince regulators to OK the deal, “is promising to bring back 5,000 call center jobs that are now overseas.”

Update at 12:30 p.m. ET. AT&T Is “Surprised And Disappointed;” Will Make Its Case In Court.

The company’s official response:

“We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

“We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

“At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

– “Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.

– “Allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population;

– “Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

“We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.”

Update at noon ET. A Settlement At Some Point?

More from Bloomberg’s report:

“AT&T in a July 25 filing at the FCC submitted new economic models that it said showed the merger would lower prices and increase service in large metropolitan markets. The models offer ‘further detailed support’ for arguments that the merger will lessen strains on the company’s wireless network, lower costs and increase quality, AT&T said in the filing.

” ‘Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight,’ said Andrew Gavil, a law professor at Howard University in Washington. ‘The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point.’ “

Update at 11:45 a.m. ET:

Bloomberg News says that “Philipp Schindera, a spokesman at Bonn-based Deutsche Telekom [which owns T-Mobile], declined to immediately comment on the filing. … Michael Balmoris, an AT&T spokesman, didn’t immediately respond to an e-mail and phone calls seeking comment.” [Copyright 2011 National Public Radio]

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