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AT&T moves to dismiss Sprint, Cellular South suits

Mon, 10/03/2011 - 8:10am
Maisie Ramsay, Wireless Week

AT&T has asked a judge to dismiss lawsuits filed by Sprint and Cellular South against its merger with T-Mobile USA.

AT&T challenged the companies' motivations for signing on to the Department of Justice's antitrust suit against the deal in a motion filed this afternoon, saying Cellular South and Sprint were merely out to protect their own interests.

"Sprint knows that competition will be enhanced, not harmed, by the combination of AT&T and T-Mobile and that a post-merger AT&T … will be a more formidable competitor," AT&T said. "What is good for consumers is bad for Sprint, and that is why Sprint has filed suit. That is also why the court should dismiss Sprint's suit for lack of standing under the Clayton Act."

By filing complaints against the deal as a related case to the DOJ's suit, Sprint and Cellular South aimed to air their concerns in court and add additional weight to the government's suit.

Several state attorneys general have also been added to the DOJ's complaint, allowing their evidence to be presented before the court. The DOJ said today that Puerto Rico's attorney general had joined the seven other state attorneys general who signed on to its complaint two weeks ago.

Vonya McCann, vice president of regulatory affairs at Sprint, said it had expected AT&T to attempt to dismiss the case.

"There's nothing surprising about AT&T's motion to dismiss this litigation," McCann said. "AT&T's motion is without merit, and Sprint will respond to it next Friday."

AT&T's motion against Cellular South, recently renamed C Spire Wireless, alleges that the regional operator's lawsuit is self-serving. "Like Sprint, Cellular South is concerned not about any reduction in competition, but intensified competition," AT&T said.

As proof, AT&T cited an email sent by Cellular South chief Hu Meena to AT&T Mobility top executive Ralph de la Vega that attempted to bargain with the larger operator over the T-Mobile deal shortly after the merger was announced in March.

"We believe the proposed combination will only exacerbate the anticompetitive effects of handset exclusive agreements, AT&T's reluctance (or refusal) to provide full data (including 4G) and voice roaming access and interoperability issues," Meena said, according to a copy of the email provided by AT&T. "On the other hand, we believe that AT&T is also capable of alleviating these issues for Cellular South through an internetworking agreement."

Meena asked de la Vega to agree to a reciprocal roaming agreement where Cellular South would use spectrum from AT&T, T-Mobile or itself to "build, operate and own an LTE network in the entire state of Mississippi and any other area in southeast that AT&T desires."

Cellular South would in turn provide network services to AT&T "via attractive MVNO arrangement in the areas in which [Cellular South] builds."

"In other words, Cellular South suggested that it would not oppose the merger if AT&T would agree not to engage in facilities-based competition in Mississippi," AT&T said. "This inappropriate proposal confirms that what Cellular South fears is competition, not lack of competition."

Cellular South disagreed with AT&T's characterization of the emails between Meena and de la Vega.

"AT&T's accusations flatly distort the record," said Eric Graham, vice president of government relations at Cellular South, in an email response.

Graham denied that Meena suggested AT&T not compete in Mississippi or any of its other markets and said the emails were initiated by AT&T.

"In the days surrounding the announcement of AT&T's takeover of T-Mobile, AT&T approached us in an effort to gain our support," he said. "Meena raised the same issues that we have articulated for years. In typical fashion, AT&T declined to address those issues and we moved on."

Oral arguments in Sprint and Cellular South's lawsuits are slated to begin in October. The trial for the DOJ's lawsuit against the merger is scheduled to begin Feb. 13, 2012.

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