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David Salway

Department of Justice Files Lawsuit Opposing AT&T / T-Mobile Merger

By September 1, 2011

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AT&T T-Mobile MergerThe U.S. Department of Justice sued to block the proposed AT&T acquisition of T-Mobile for $39 billion. The antitrust challenge filed by the Obama administration was surprising because it was filed just five months after the deal was announced.  The government claimed what many state attorneys generals have said about the deal:  the merger of the nation's second and fourth largest telecommunication provider would harm consumers because of higher prices as a result of less competition in the marketplace.

The T-Mobile acquisition "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 James Cole, deputy attorney general.
AT&T claimed it would be able to use towers and spectrum controlled by T-Mobile's to build out wireless broadband to unserved consumers in the United States.  AT&T also bolstered it argument by saying the merger would create jobs by expanding broadband access.  The deal would also position the newly formed company to build large portions of an interoperable broadband public safety network, which is a large part of the Obama administration's national broadband strategy. 
The FCC is also reviewing the proposed deal, and FCC Chairman Julius Genachowski has already expressed serious concerns about the merger's impact on competition.  Although settling the lawsuit out of court is a possibility, the Justice Department claims that the filing is not a tactical move.


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