Feds Sue to Block AT&T, T-Mobile Merger

The Department of Justice claims the controversial merger would result in higher prices and fewer choices for Americans.

August 31, 2011

1 Min Read
Feds Sue to Block AT&T, T-Mobile Merger

By Josh Long

The U.S. Department of Justice on Wednesday moved to block AT&Ts $39 billion acquisition of T-Mobile USA, saying the controversial deal would greatly reduce competition in the U.S. wireless market.

The Justice Department filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia in a move aimed to obstruct a merger between the nations second- and fourth-largest wireless providers.

The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” Deputy Attorney General James M. Cole said in a statement. Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nations wireless carriers, particularly the four remaining national carriers.”

AT&T has no plans of backing down and intends to battle the DOJ in court.

“We plan to ask for an expedited hearing so the enormous benefits of the merger can be fully reviewed,” said Wayne Watts, AT&T’s senior executive VP and general counsel, in a statement. “The DOJ has the burden of providing alleged anticompetitive affects and we intend to vigorously contest this matter in court.”

The Federal Communications Commission also is reviewing the merger, but Stifel Nicolaus analyst Rebecca Arbogast said in a research note her firm would be astonished if the FCC were to approve the deal while the litigation is pending before the District Court.”  

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