WASHINGTON (AP) — 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.
The government contends that the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition.
At a news conference, Deputy Attorney General James Cole said the combination 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."
The lawsuit seeks to ensure that everyone can continue to receive the benefits of competition, said Cole.
AT&T said it would fight and ask for an expedited court hearing "so the enormous benefits of this merger can be fully reviewed." The company said the government "has the burden of proving alleged anti-competitive effects, and we intend to vigorously contest this matter in court."
Four nationwide providers — Verizon, AT&T, T-Mobile and Sprint — account for more than 90 percent of mobile wireless connections.
T-Mobile has been an important source of competition, including through innovation and quality enhancements such as the roll-out of the first nationwide high-speed data network, according to Sharis Pozen, acting chief of Justice's antitrust division.
Mobile wireless telecom services play an increasing role in day-to-day communications, with more than 300 million smart phones, data cards, tablets and other mobile wireless devices in use.
Deutsche Telekom, the owner of T-Mobile, had no immediate comment.
AT&T and T-Mobile compete nationwide, in 97 of the largest 100 cellular marketing areas, according to the suit filed in U.S. District Court in Washington.
It says AT&T's acquisition of T-Mobile would eliminate a company that has been a competitive factor through low pricing and innovation.
Federal Communications Commission member Michael Copps, a Democrat and a staunch opponent of industry consolidation, said that he shares "the concerns about competition and have numerous other concerns about the public interest effects of the proposed transaction, including consumer choice and innovation."
Democratic Sen. Herb Kohl of Wisconsin, who heads the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, said the suit was an effort to protect consumers "in a powerful and growing industry that reaches virtually every American."
The suit used some of T-Mobile's own documents describing its role in the market to explain why the merger shouldn't take place. In those documents, the company calls itself "the No. 1 challenger of the established big guys in the market and as well positioned in a consolidated 4-player national market."
T-Mobile said its strategy is to attack other companies and find innovative ways to overcome the fact that it is a smaller company.
T-Mobile "will be faster, more agile and scrappy, with diligence on decisions and costs both big and small," one company document said. "Our approach to market will not be conventional, and we will push to the boundaries where possible."
The suit also says the anti-competitive problems a merger would cause cannot be overcome by regional companies.
Regional companies lack national networks, so are limited in their ability to compete with the four national carriers, the lawsuit states.
Copyright 2011 The Associated Press.
County officials say it will create jobs and provide much needed services, but opponents of a new county welfare and probation office say it's all wrong for their community.
Cal Fire responded to a call just before 7:30 Tuesday morning reporting the death of a child in Descanso.
Protests on Monday continued to grow in San Diego and around the country over the Trump administration’s policy to separate migrant children from their parents.
Above average temperatures return to the county as high pressure strengthens south of our region. Marine layer will become very suppressed under the high pressure, but may not be completely dissipated.
There is a new kid in town. Millie the goat arrived at the Helen Woodward Woodward Animal Center on Monday.
Imagine riding a bike across the country. Now, imagine riding a bike across the US blind. A group of cyclists left Oceanside on Saturday and will be riding their way on bike to Maryland.
Chula Vista Police on Sunday were trying to determine how a man's body ended up in the middle of the street. Someone first spotted him early in the morning in the westbound lanes of Buena Vista Way near Rancho Del Rey Parkway.
House Minority Leader Nancy Pelosi and other Democratic elected officials toured a San Diego-area immigration-detention facility housing migrant children Monday, as the rhetoric over the policy of separating children from parents crossing the border illegally continued to escalate.