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U.S. Justice Dept. moves to block AT&T,
August 31, 2011 — The U.S. government on Wednesday officially filed suit to block AT&T’s proposed $39 billion acquisition of T-Mobile.
T-Mobile merger By Andrew Nusca, ZDNet Read the U.S. Dept. of Justice complaint at ZDNet.
The reason? The acquisition of America’s fourth-largest carrier by its second-largest would “substantially lessen competition” in the industry, violating U.S. antitrust law.
“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 Cole in a statement. More points made in the filing:
•The four major national wireless carriers — AT&T, T-Mobile, Sprint and Verizon — account for more than 90 percent of the market.
•AT&T and T-Mobile compete head-to-head nationwide, in 97 of the America’s 100 largest cellular marketing areas. •T-Mobile’s small size allowed it to innovate with Android, HSPA+, national Wi-Fi “hotspot” access and unlimited service plans. That and its value pricing are at risk when joined with AT&T. •There’s no one to fill T-Mobile’s role. ”Regional providers face significant competitive limitations, largely stemming from their lack of national networks, and are therefore limited in their ability to compete with the four national carriers,” the DOJ said. The U.S. Department of Justice filed its complaint in federal court in Washington, seeking a court order to block the deal. It’s officially U.S. v. AT&T Inc., 11-01560, U.S. District Court for the District of Columbia. Should it succeed, AT&T would be forced to pay Deutsche Telekom, T-Mobile’s German parent company, $3 billion in cash, as well as additional wireless spectrum and reduced charges for calls using AT&T’s network. “Unless this merger is blocked, competition and innovation will be reduced, and consumers will suffer,” said Sharis Pozen, acting assistant attorney general for the DOJ’s Antitrust Division, in a statement. The news comes after AT&T claimed that the deal would add 5,000 new jobs in the U.S. The final decision is expected early next year. Tweet |