DOJ probe of AT&T, T-Mobile deal deepens: source

WASHINGTON Tue May 3, 2011 5:47pm EDT

A view shows the AT&T store sign in Broomfield, Colorado April 20, 2011. REUTERS/Rick Wilking

A view shows the AT&T store sign in Broomfield, Colorado April 20, 2011.

Credit: Reuters/Rick Wilking

Related Topics

WASHINGTON (Reuters) - The Justice Department has decided to pursue an in-depth investigation of AT&T's plan to buy of T-Mobile USA, according to a source familiar with the deal.

The decision was widely expected as antitrust enforcers typically give close scrutiny to big deals that involve large market shares.

Justice Department spokeswoman Gina Talamona declined to confirm that the antitrust division had deepened its probe. "Our investigation is ongoing," she added.

AT&T's $39 billion bid to buy Deutsche Telekom AG's T-Mobile USA would concentrate 80 percent of U.S. wireless contract customers in just two companies: AT&T/T-Mobile and Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc.

AT&T is currently the No. 2 U.S. mobile carrier behind Verizon.

In assessing whether mergers are legal, the U.S. Justice Department can take a quick look at a deal and approve it within 30 days, a process called an early termination. Or it can issue a so-called second request, indicating that the antitrust investigation is likely to be prolonged.

Because of the size of the AT&T/T-Mobile deal, and because the companies are major players, it was always expected that the Justice Department would take months before signing off on the deal or deciding to challenge it.

The Federal Communications Commission must also approve the deal before it can go forward.

AT&T Inc rivals like Sprint Nextel Corp -- in hopes of derailing the purchase -- have asked U.S. regulators to combine a review of AT&T's proposed purchase of T-Mobile USA with their examination of its plan to buy wireless airwaves from Qualcomm Inc.

AT&T agreed in December to pay Qualcomm $1.93 billion for airwaves.

Sprint, Cincinnati Bell Inc, MetroPCS Communications Inc and Ntelos Holdings Corp say the FCC should look at the cumulative impact of both deals to U.S. mobile competition, rather than running separate reviews.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.