AT&T's T-Mobile plan gets boost from states

WASHINGTON Wed Jul 27, 2011 7:21pm EDT

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WASHINGTON (Reuters) - AT&T Inc's (T.N) $39 billion plan to acquire Deutsche Telekom AG's (DTEGn.DE) T-Mobile unit got support from a Louisiana regulator and 11 state attorneys general on Wednesday.

The Louisiana Public Service Commission, which regulates public utilities and transportation in the state, said it voted 4-1 to approve the merger, after staff found nothing to suggest the wireless deal was contrary to the public interest.

Separately, 11 state attorneys general wrote to the U.S. Justice Department and the Federal Communications Commission in support of the transaction that would vault the combined companies ahead of current market leader Verizon Wireless.

Attorneys general from Arkansas, Utah, Alabama, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, West Virginia and Wyoming said they believed the merger would bring better service and faster data speeds.

They asked for merger-specific conditions to protect competition and the public interest without delaying the merger, according to a news release from the Arkansas AG's office.

A statement by the Utah attorney general said the merger may raise competitive concerns in some discrete local markets and the AGs asked for targeted remedies in those cases.

The ultimate decision on the deal rests with the Justice Department, that is conducting an antitrust review, and the FCC, which is weighing whether the transaction is in the public interest.

The merger would concentrate 80 percent of the U.S. wireless market in just two companies -- AT&T/T-Mobile and Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L).

AT&T argues that the purchase of T-Mobile will help it expand faster service to more customers.

Critics charge that less competition will increase prices and limit consumer choice.

AT&T's top lawyer welcomed the position of the 11 state attorneys general.

"Their call for federal regulators to expeditiously review and approve the merger further builds on our unprecedented nationwide support from federal, state and local elected officials, national unions, non-profit organizations, and high-tech and venture capital firms," said Wayne Watts, AT&T's senior executive vice president and general counsel.

But some prominent U.S. lawmakers and competitors have come out against the deal, including Senator Herb Kohl, chairman of the U.S. Senate's antitrust subcommittee.

Third-ranked U.S. wireless carrier Sprint Nextel (S.N) has said AT&T should use the money it plans to pay for T-Mobile to improve its network without removing a national competitor.

Sprint spokesman John Taylor said the Louisiana commission's decision was simply not to oppose AT&T's takeover and to instead defer to the FCC -- "far from the ringing endorsement AT&T sought."

(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)

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