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Sprint sues to block AT & T, T-Mobile deal

Wed, 09/07/2011 - 8:15am
Maisie Ramsay, Wireless Week

Sprint joined the Justice Department's efforts to block AT&T's $39 billion buyout of T-Mobile USA yesterday when it filed a lawsuit alleging the deal violated federal antitrust laws.

The suit was filed in a District of Columbia federal court, the same court where the DOJ filed its own antitrust complaint against the merger last week. Sprint's complaint is listed as a related case to the DOJ's suit.

The new charges could complicate AT&T's efforts to fight off the DOJ. Sprint has been one of the most vocal opponents to AT&T's acquisition of T-Mobile, and its lawsuit will give it a chance to voice its complaints before the same court that is handling the DOJ's suit.

"AT&T's proposed takeover of T-Mobile is brazenly anticompetitive," the complaint states. "In one fell swoop, AT&T's proposed purchase would eliminate one of four national competitors and marginalize a second (Sprint), pushing the market back toward a 1980s-style cell phone duopoly that would force consumers to endure higher prices and be denied the fruits of vigorous innovation."

The 68-page complaint echoes many of the allegations levied against the deal by the DOJ, stating the merger would cripple Sprint and other smaller operators trying to compete against AT&T and Verizon, which together would have a near-duopoly hold on the wireless market if the T-Mobile deal is approved.

Sprint's suit also restates many of its prior arguments against the deal, charging that AT&T's buyout of the country's fourth-largest wireless operator would allow it to raise prices and use its market power to exclude competitors, restrict access to new handsets and control backhaul and roaming.

AT&T questioned Sprint's motives in filing the suit.

"This simply demonstrates what we've said all along – Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers," an AT&T spokeswoman said, vowing it will "vigorously contest this matter in court."

AT&T says it will fight the DOJ's lawsuit, but the company is left with few options in the wake of the complaint. The operator could attempt to renegotiate the deal for an out-of-court settlement or wage a lengthy and expensive legal battle against the suit. AT&T will have to pay Deutsche Telekom $3 billion in cash if the merger falls through, plus hand over AWS spectrum and offer low rates on roaming.

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