7 U.S. States Side with DOJ Against AT&T/T-Mobile Merger

AT&T can’t seem to catch a break in the quest for its $39 billion T-Mobile purchase. Just when it began to garner some support from U.S. states such as the Louisiana Public Service Commission and 11 state attorneys general, seven U.S. states have now joined the Department of Justice’s move to kill the merger, agreeing that such a deal would be anticompetitive and bad for customers.

According to Andy Gavil, an antitrust law professor at Howard University, this could certainly complicate AT&T’s chances of succeeding with its T-Mobile venture because additional support against the merger will likely force the case to be fully litigated, where the Department of Justice and the states will not be pressured to settle on bad terms. 

“We have had an excellent working relationship with a number of state attorneys general and they have provided invaluable assistance throughout our investigation,” said the Department of Justice in a statement. “Together, we will seek to protect consumers from the anticompetitive harm that would result from this proposed transaction.” 

AT&T responded to the additional state opposition by saying that it is not “unusual” for this to happen, and that several other state attorneys general support the merger.

“We will continue to seek an expedited hearing on the DOJ’s complaint,” said AT&T Spokesman Michael Balmoris. “On a parallel path, we have been and remain interested in a solution that addresses the DOJ’s issues with the T-Mobile merger.” 

Federal Judge Ellen Huvelle will hold a hearing Wednesday, September 21 on a schedule for the DOJ’s case. The DOJ has proposed a separate filing for a hearing date of March 19, 2012, and said that AT&T and T-Mobile requested a January 16, 2012 trial date.  

AT&T has tried several tactics to persuade the government to allow the high-profile merger since its announcement in March, such as promising 5,000 wireless call center jobs to U.S. citizens. While AT&T Chairman and CEO says the merger would improve network quality, strengthen/expand critical infrastructure and bring advanced LTE capabilities to users, many are wary of the potential anticompetitive results of the deal.

If the case is not settled by September 2012, AT&T will be required to pay a $6 billion penalty, which is likely the reason it seeks an expedited hearing of the DOJ’s complaints.