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AT&T On Justice Department's Move To Block T-Mobile Merger: 'We're Surprised'

Att On Justice Department T Mobile Merger

The Huffington Post   First Posted: 08/31/11 02:11 PM ET Updated: 10/31/11 06:12 AM ET

Though antitrust experts gave AT&T's controversial bid to buy T-Mobile little chance of being approved outright by regulators, AT&T said in a statement that it was "surprised" by the Justice Department's move to block the merger.

Shortly after the Justice Department announced it would file an antitrust suit to stop the acquisition, AT&T general counsel Wayne Watts issued a press release stating the company would "vigorously contest" the lawsuit. AT&T "[remains] confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court," Watts said.

Many disagree: even before the Justice Department's suit, groups ranging from wireless-industry rivals Sprint and Leap to the consumer groups such as the National Hispanic Media Coalition spoke out against AT&T's $39 billion bid to buy T-Mobile. Senator Al Franken said the massive merger posed "threats [...] too large and too irrevocable to be prevented or alleviated by conditions."

"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 Watts. "We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court." (Read the full statement here)

If the deal is not approved by U.S. regulators, AT&T stands to lose not only T-Mobile, but also $3 billion in cash and some of its access to wireless spectrum, which were promised to Deutsche Telekom in the event the acquisition was blocked. According to Wired, "Deutsche Telekom valued the total worth of the kill package at as much as $7 billion."

AT&T rival Sprint, which has opposed the merger since it was announced, praised the Justice Department's decision in its own press release.

"The DOJ today delivered a decisive victory for consumers, competition and our country. By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first," said Sonya B. McCann, Sprint's senior VP of government affairs. "Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision – one which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry. Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation.”

The Justice Department opposed the deal on the grounds that it would "substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives."

Read the Justice Department's full statement here. See more reactions to the news below:

FCC Chairman Julius Genachowski

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