DOJ Moves to Block AT&T Acquisition of T-Mobile USA
AT&T claims it was sandbagged by the suit and will fight
By: Maureen O'Gara
Sep. 1, 2011 08:15 AM
The Justice Department filed suit Wednesday to block AT&T's proposed $39 billion acquisition of T-Mobile USA claiming tens of millions of consumers would face higher prices because of reduced competition and the possibility of lower-quality products for mobile wireless services.
T-Mobile, for instance, rolled out the first nationwide high-speed data network.
Four nation-wide suppliers handle more than 90% of US mobile wireless connections, namely AT&T, T-Mobile, Sprint and Verizon. AT&T is the second-largest supplier and T-Mobile the fourth.
The DOJ didn't sound very negotiable during its telecast press conference but Deputy Attorney General James Cole said the "door is open" to remedies.
AT&T claims it was sandbagged by the suit and will fight. Its position has been that the combination would see more investment go into the mobile network and create better service across more of the country.
AT&T may be on the hook for a $3 billion break-up fee to Deutsche Telekom, which hasn't wanted to pour more money in its US operation.
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