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U.S. stops AT&T's T-Mobile acquisition

Posted: 02 Sep 2011 ?? ?Print Version ?Bookmark and Share

Keywords:competition? wireless communication? carriers?

The U.S. Justice Dept. filed a lawsuit in the U.S. District Court of Columbia that seeks to block the possible acquisition of T-Mobile by AT&T in a proposed $39 billion deal. The DoJ fears that the competition for wireless communication industry will decrease if such acquisition pushes through.

"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," said Deputy Attorney General James M. Cole, in a statement. "Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition," Cole added.

According to the DoJ, AT&T, T-Mobile, Sprint and Verizon provide services to more than 90 percent of the more than 300 million connected wireless devices currently in use in the U.S. The acquisition of T-Mobile would consolidate two of those four and remove a firm, T-Mobile, that historically has been a value provider, offering particularly aggressive pricing, according to the DoJ.

The DoJ's complaint alleges that AT&T and T-Mobile compete head to head nationwide, including in 97 of the nation's largest 100 cellular marketing areas. They also compete nationwide to attract business and government customers, according to the complaint. AT&T's acquisition of T-Mobile would eliminate a company that has been a disruptive force through low pricing and innovation by competing aggressively in the mobile wireless telecommunications services marketplace, the DoJ said.

Wayne Watts, AT&T senior executive vice president and general counsel, said through a statement that AT&T was "surprised and disappointed" by the suit, particularly since the DoJ gave the company no indication that it was considering filing the complaint.

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

Watts said the proposed acquisition would help solve the exhaustion of wireless spectrum in the U.S. and improve wireless service for millions of people. The proposed acquisition would also allow AT&T to expand 4G LTW broadband service to another 55 million Americans and result in billions of dollars in investment and tens of thousands of jobs "at a time when our nation needs them."

AT&T: We're bringing 5,000 jobs back
In a separate statement issued earlier in the day, AT&T said it would bring 5,000 wireless job call center jobs back to the U.S. if the acquisition goes through. These jobs are currently outsourced to people in other countries, AT&T said.

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