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Justice Department Seeks To Block AT&T, T-Mobile Merger

First Posted: 08/31/11 11:45 AM ET Updated: 10/31/11 06:12 AM ET

By JOELLE TESSLER and PETE YOST, Associated Press

WASHINGTON -- 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 and thus lead to price increases.

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.

Four nationwide providers account for more than 90 percent of mobile wireless connections - AT&T, T-Mobile, Sprint and Verizon.

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, Sharis Pozen, acting chief of Justice's antitrust division, said at the news conference.

Mobile wireless telecom services play a critical role, with more than 300 million smart phones, data cards, tablets and other mobile wireless devices.

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Filed by Bianca Bosker  |