Justice Department Wants AT&T, T-Mobile Merger Blocked

The U.S. Department of Justice has filed a lawsuit to block AT&T from acquiring maneuverable competitor T-Mobile USA, with the agency saying the $39 billion merger deal would significantly trim down competition, jack up prices and stifle innovation.

The Department of Justice lawsuit, filed Midweek in U.S. District Court for the D.C., points to T-Mobile USA's role as a low-cost competitor to the three different nationwide nomadic carriers as a reason to block the mete out.

Justice Department Wants AT&T, T-Mobile Merger Blocked

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and frown quality products for mobile radio set services," Deputy United States Attorney General James Cole said in a program line. "Consumers across the land, including those in rural areas and those with lower incomes, benefit from competition among the nation's radio receiver carriers, particularly the quaternity odd national carriers."

AT&T did not consume an immediate comment on the DOJ's decision. Early Wednesday, AT&T said it would bring back 5,000 outsourced foretell-center jobs to the U.S. if the deal was approved.

AT&T and T-Mobile, closely-held by Deutsche Telekom, contend head-to-straits in 97 of the state's 100 largest cellular merchandising areas, the complaint said. The deal would eliminate T-Mobile American Samoa a "disruptive force" in the Mobile industry through alto prices and innovative services, the DOJ aforesaid in a press release.

T-Mobile offered the first smartphone exploitation the Android Osmium, the first Blackberry bush tune e-mail and the first national Wi-Fi hotspot access, the Justice Department same. T-Mobile was the forward U.S. company to roll out a nationwide data network based on late HSPA+ (Top-Speed Mailboat Access) engineering science, the agency said.

AT&T felt competitive pressure from T-Mobile, and from its HSPA+ offering, Cole said.

T-Changeful sees itself as "the Zero. 1 value challenger of the established big guys in the market," according to company documents quoted in the DOJ complaint. T-Rotatable's strategy is to "attack incumbents and notic innovative ways to overcome scale disadvantages. [T-Mobile] will be faster, more agile, and scrappy, with diligence on decisions and costs both banging and small," the documents added.

The DOJ looked seriously at the benefits AT&T and T-Mobile talked about, the agency said. AT&T did not show that the plenty "promised whatever efficiencies that would be adequate to outweigh the transaction's wholesome adverse impact on competition and consumers," the DOJ said.

Critics have said the merger would reduce the number of nationwide mobile carriers from four to three and could tip to high maneuverable service prices with ground-hugging-cost competition T-Mobile eliminated. AT&adenosine monophosphate;T could better use the $39 billion to build stunned and improve its extant meshwork, critics bear said.

AT&A;T has argued that the deal will allow the newsboy to bring LTE (Long Term Evolution) mobile broadband religious service to 97 percent of the U.S., as anti to 80 percent without the merger. T-Mobile executives suffer said they don't have the spectrum to pop the question LTE serve without the merger. The merger will ensue in advisable mobile table service, with fewer dropped calls and faster data speeds, AT&T has said.

The DoJ's opposition to the deal may non mean the merger is drained, said Jeff Kagan, an independent telecom analyst. "It can be renegotiated," he same. "I think the government is simply expression this deal, the way it is organic, volition not be approved. So AT&T must variety the social organization and they volition. They will re-introduce this deal and it leave be below consideration again."

The DOJ's actions, however, come upon a leading blow to AT&T as IT searches for ways to meet a growth demand for moveable spectrum, he said. "AT&T inevitably more capacity," he said. "However, this is the same job every carrier has to deal with going away forward. We need solutions."

Uncomparable way to deal with the spectrum crunch caused by increased use of mobile data services would be for the U.S. Federal Communications Commission to take back mobile spectrum and let all carriers share information technology, Kagan aforesaid. Another approach would be to combine sublunar and satellite services, arsenic mobile broadband startup LightSquared has projected, He said.

"Either way, we need to come put together A a land and an industry and come upfield with a historical long term solution," he said.

The FCC, also reviewing the proposed merger, had "earnest concerns" about the deal's effect on transportable competition, FCC President Julius Genachowski said in a statement.

Hiram Ulysses Grant Gross covers technology and telecommunication policy in the U.S. government for The IDG News Inspection and repair. Follow Grant happening Chirrup at GrantGross. Yield's e-get off dea is grant_gross@idg.com.