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Government sues to halt AT&T, T-Mobile merger

August 31, 2011 12:00:00 AM PDT
The Justice Department filed suit Wednesday to block AT&T's $39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers.

According to the government, the purchase of the No. 4 wireless carrier nationwide by No. 2 AT&T would threaten competition, causing price increases. Deputy Attorney General James Cole said that the merger 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."

Meanwhile AT&T is requesting an expedited court hearing. The company said that the government "has the burden of proving alleged anti-competitive effects, and we intend to vigorously contest this matter in court."

Since AT&T first announced the deal in March, it has insisted that consumers would have a choice of multiple providers in many markets even if the deal occurs.

The Justice Department, however, argued that regional providers face competitive constraints because they do not have national networks. It said the vast investments and resources necessary to gain wireless spectrum and build a network make it difficult for new companies to enter the wireless market. percent.

Four carriers - Verizon, AT&T, T-Mobile and Sprint - account for over 90 percent of mobile wireless connections nationwide. The transaction would lead AT&T to surpass Verizon Wireless and become the country's largest wireless provider.

The Associated Press contributed to this report.


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