AT&T, rivals delay legal fights over T-Mobile

Tue Dec 13, 2011 12:09pm EST

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

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(Reuters) - AT&T Inc and Sprint Nextel Corp asked a U.S. court on Tuesday to delay hearings in their private litigation over whether the telecommunications giant can buy T-Mobile USA, and the judge promptly agreed.

The request was similar to one that AT&T and the Justice Department made on Monday regarding the government's antitrust suit, which U.S. District Judge Ellen Huvelle also promptly signed.

An identical request was agreed in a case against AT&T brought by small regional phone company C Spire Wireless.

AT&T's agreement to delays in the cases, after previously insisting on expediting them to prevent Deutsche Telekom AG's T-Mobile USA from deteriorating in limbo, have led to pessimism that the $39 billion deal will be completed.

AT&T has also set aside $4 billion in reserves for what could eventually be a $6 billion deal breakup payment to T-Mobile.

AT&T and Sprint asked for the next hearing in the case to be January 18, at 2 p.m. EST (1900 GMT), the same time as the next hearing in the Justice Department's case against AT&T.

Huvelle has ordered AT&T and T-Mobile USA to tell the court by noon on January 12 whether they plan to continue to pursue their agreed deal or an amended one and to give an update on their plans for seeking necessary approval from the U.S. Federal Communications Commission.

Both the Justice Department and the FCC have objected to the deal on the grounds that it would hurt competition in the U.S. wireless market. The purchase of No. 4 U.S. mobile operator T-Mobile USA would vault No. 2-ranked AT&T into first place in the U.S. market.

The cases before the court are USA v. AT&T, T-Mobile USA Inc and Deutsche Telekom AG, case No. 11-1560; Sprint Nextel Corp v. AT&T Inc et al, No. 11-1600 and Cellular South (C Spire) v. AT&T, No. 11-1690. All are before the U.S. District Court for the District of Columbia.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)

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Comments (5)
Intriped wrote:
T Mobile needs to go back to Germany and continue ripping off Germans, not Americans.

Dec 12, 2011 11:01pm EST  --  Report as abuse
DBoo wrote:
Consumers are finally noticing that AT&T and Verizon = The Most Expensive Wireless Plans in America. We know where Verizon and AT&T (both in the top 5 for corporate lobbying) get all that money to run commercials 24×7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists to push the U.S. market into a wireless industry duopoly — the American consumer. This is how AT&T and Verizon fashion themselves as brilliant … with their political use of money.

Taking into account the whole U.S. market, a combination of AT&T and T-Mobile would increase the Herfindahl-Hirschman Index (HHI), a widely accepted measure of market concentration, to 3,216 from 2,848, according to a Bloomberg analysis. Any score above 2,500 indicates a highly concentrated market, and any increase of more than 200 points clearly enhances market power, according to federal guidelines.

If this ridiculous deal goes through, Sprint will be the only low-priced post-paid national wireless carrier left in the United States. T-Mobile customers are already fleeing to Sprint because they know they won’t get low prices from AT&T or Verizon. But AT&T and Verizon are two of the top corporate lobbyists in the country, so beware of how things could “mysteriously” turn in this case.

“It’s only a slight overstatement to say that if they weren’t going to block this one, the Justice Department might as well just throw the antitrust guidelines out the window,” said Herbert Hovenkamp, professor of law at the University of Iowa, who is considered by many to be the dean of American antitrust law. “This merger clearly seems to violate them.”

Dec 12, 2011 11:22pm EST  --  Report as abuse
DBoo wrote:
It must be nice to be a deep-pocketed duopolist in this economy. According to the report “Corporate Taxpayers & Corporate Tax Dodgers 2008-10,” two of the 25 companies with the largest total tax subsidies were AT&T at #2 ($14.5 billion) and Verizon at #3 ($12.3 billion). Also, there were 30 corporations that paid less than nothing in aggregate federal income taxes over the same period. These 30 companies, whose pretax U.S. profits totaled $160 billion over the three years, included Verizon. The report states the laws that allow this were not enacted in a vacuum, but rather were adopted in response to relentless corporate lobbying, threats and campaign support.

AT&T remains the worst carrier in the United States, according to an annual customer satisfaction survey compiled by Consumer Reports. The mobile provider ranked dead last for the third year in a row.

Dec 12, 2011 11:24pm EST  --  Report as abuse
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