U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger

[The_Dude 1,142]

U.S. Files Antitrust Complaint to Block AT&T, T-Mobile Merger

he U.S. government sued to block AT&T Inc. (T)’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market. AT&T shares fell as much as 5 percent.

In the complaint filed today in federal court in Washington, the U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law. The U.S. also asked for a court order blocking any arrangement implementing the deal.

“AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.

Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month.

Philipp Schindera, a spokesman at Bonn-based Deutsche Telekom, declined to immediately comment on the filing. Jessica Smith, a Justice Department spokeswoman, declined to comment on the suit. Michael Balmoris, an AT&T spokesman, didn’t immediately respond to an e-mail and phone calls seeking comment.

Shares Drop

AT&T fell $1.02, or 3.4 percent, to $28.60 at 10:55 a.m. in New York Stock Exchange composite trading after declining as much as $1.49. Deutsche Telekom American depositary receipts dropped as much as 6.4 percent, to $12.93.

The purchase of Bellevue, Washington-based T-Mobile would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless. The new company would have dwarfed current No. 3 carrier Sprint Nextel Corp., which argued against the deal. Overland Park, Kansas-based Sprint’s shares jumped as much as 9.9 percent.

Some U.S. lawmakers have said the deal may reduce competition and raise consumer costs. The Federal Communications Commission has given itself more time to study new data presented by AT&T.

Economic Models

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.”

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[Harsh_77 718]

Had seen this one coming from day one when they annouced about the buying out plans.

But from what I had heard was the way they showed each market and how either ATT or T-mobile was present and once ATT bought T-Mobile it was not going to kill the competition.

Personally I think the merger should not be allowed anyway ATT sucks adding more customer and killing one of the competitor would make ATT service even worst.

[Obama 2012 1,714]

Since when is T-Mobile "Major Competition"

Yeah yeah, it's #4 of the 'major' carriers, but it has 1/3 of AT&T and Verizon's customers.

MetroPCS is eventually going to stomp all over them soon enough anyway with what they are pushing. Verizon and AT&T will fall if they don't end up with the pricing points that MetroPCS has.

[The_Dude 1,142]

Since when is T-Mobile "Major Competition"

Yeah yeah, it's #4 of the 'major' carriers, but it has 1/3 of AT&T and Verizon's customers.

MetroPCS is eventually going to stomp all over them soon enough anyway with what they are pushing. Verizon and AT&T will fall if they don't end up with the pricing points that MetroPCS has.

If you look at the company in its entirety it is a major carrier.

When the merger was first announced, I was pissed. I had spent the better part of 6 months fighting with AT&T to terminate my contract and signed with T-Mobile.

[Robert&Liliya 31]

And AT&T Sucks. I hate having to deal with Ma Bell. The government broke them apart and now they are back and the only difference is the logo.

[Bad_Daddy 2,209]

And AT&T Sucks. I hate having to deal with Ma Bell. The government broke them apart and now they are back and the only difference is the logo.