AT&T rebuffs DOJ filing to block merger

Written by  //  August 31, 2011  //  Telecommunications/Technology  //  No comments

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AT&T's bid to purchase rival T-Mobile hit a wall Wednesday when the DOJ filed a lawsuit to block the deal. (Credit: © Mauricio Pascual)

No sooner had the U.S. Department of Justice filed a lawsuit in a Washington D.C. court to block the proposed $39 billion takeover by AT&T of T-Mobile’s operations, when AT&T shot off a letter expressing its “disappointment” in the government’s action.

“We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated,” said Wayne Watts, AT&T senior executive vice president and general counsel.

“We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed,” he said in a statement. “The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.”

In its filing, the DOJ claimed AT&T proposed takeover of T-Mobile’s wireless business would leave a broad swath of consumers without options and could mean an increase in prices.

“AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market,” the DOJ said in its filing. “Additionally, T-Mobile’s investment in an advanced high-speed network and its innovations in technology and mobile wireless telecommunications services have provided, and continue to provide, consumers with significant value.”

The DOJ’s filing came just hours after AT&T announced that if the merger were approved, it would bring back 5,000 jobs from outsourced overseas call centers to U.S. soil.

The DOJ’s opposition joins a seemingly growing chorus of voices against the deal, including the Puerto Rico Telecommunications Regulatory Board, which earlier this month filed a lengthy letter at the Federal Communications Commission voicing its concerns about how the deal would affect the local market.

In its rebuttal to the DOJ, AT&T said it “remained confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.”

“At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will: help solve our nation’s spectrum exhaust situation and improve wireless service for millions; allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97 percent of the population; and result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most,” Watts said.

If the deal falls through, AT&T would owe T-Mobile’s parent company, Deutsche Telecom, $3 billion.

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