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AT&T files defense against DOJ suit

Mon, 09/12/2011 - 8:00am
Maisie Ramsay, Wireless Week

AT&T has filed a response to the Department of Justice's lawsuit attempting to block the operator's $39 billion acquisition of T-Mobile USA on antitrust grounds.

In a 27-page rebuttal filed Friday afternoon, AT&T disputed the DOJ's allegations and said the agency failed to account for the merger's benefit to consumers.

"Not only will plaintiff not be able to carry its burden of proof, but the relief it seeks is itself anticompetitive, as it will severely set back growth and competition in the wireless industry," AT&T said in its response, repeating claims that it will be unable to address a capacity crunch if it is not able to purchase T-Mobile's spectrum. "If this transaction does not close due to plaintiff's lawsuit, wireless consumers will, as the FCC Chairman predicts, increasingly face higher prices and lower quality."

In its rebuttal, AT&T repeated prior arguments that T-Mobile was not a strong competitor, so the deal won't harm competition. However, it also listed regional operators such as U.S. Cellular, Leap and MetroPCS as strong competitors.

AT&T has attempted to convince regulators that its takeover of the country's fourth-largest wireless operator will be beneficial to consumers by pledging to expand its LTE network to 55 million Americans, invest an additional $8 billion in its business and repatriate 5,000 call center jobs back to the United States.

The company did not cite these benefits in its rebuttal to the DOJ's lawsuit but said the new wireless network it wants to build with T-Mobile's assets "will be more than the sum of its parts."

The DOJ's antitrust lawsuit against the deal will be a serious hurdle to AT&T as it works to get the merger approved. The company will have to pay T-Mobile parent Deutsche Telekom a $3 billion breakup fee if the transaction falls through.

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