* AT&T had wanted earlier start, U.S. wanted later
* Government says T-Mobile keeps wireless prices lower
* AT&T says deal will expand high-speed wireless coverage
* Ten states urge settlement
(Adds further detail from hearing, Verizon comment, states
By Jeremy Pelofsky and Jasmin Melvin
WASHINGTON, Sept 21 A U.S. judge set a Feb. 13
start for a trial over whether AT&T Inc (T.N) can buy rival
T-Mobile USA, a compromise between the companies' desire for a
quick resolution and the Justice Department's request for more
time to prepare its case.
U.S. District Judge Ellen Huvelle on Wednesday set aside up
to six weeks for the trial in response to the Obama
administration's antitrust lawsuit against the deal. She will
preside without a jury, as is typical for such cases.
There was no discussion of any settlement to avoid trial
during the 80-minute preliminary hearing.
The Justice Department sued last month to block AT&T's $39
billion purchase of T-Mobile, owned by Deutsche Telekom AG
(DTEGn.DE), arguing it would raise prices for consumers and
hamper competition and innovation.
A key government concern is that T-Mobile, the No. 4
wireless carrier, generally costs less than other carriers so
its disappearance could mean higher prices for wireless
AT&T, the No. 2 wireless carrier, has defended the
transaction, saying it would bring 5,000 overseas jobs back to
the United States and enable it to expand high-speed wireless
Internet coverage to 97 percent of all Americans.
The trial date falls between the government's request to
begin March 19 and AT&T's petition for a Jan. 16 date. Lawyers
for the parties said the matter was unlikely to need six weeks
to present evidence or witnesses.
Mark Hansen, one of AT&T's lawyers, had pressed the judge
for a quick trial to provide certainty to the companies and the
market, saying they were "already months beyond where we want
AT&T and T-Mobile could find it difficult to hold the deal
together through a long proceeding and investors' patience
could wane. The combined companies would leapfrog Verizon
Wireless, a venture of Verizon Communications Inc (VZ.N) and
Vodafone Group Plc (VOD.L), into the No. 1 wireless spot.
Even with an expedited trial, and if the companies lose
before Huvelle, an appeals process could stretch into 2013,
said Evan Stewart, an antitrust expert with law firm Zuckerman
Spaeder LLP. The government could also appeal if it lost.
"The sooner this gets done, the better it is from AT&T's
perspective," said Stewart. "All those uncertainties change
your business model which affect your bottom line, which is bad
Verizon said it will not get involved in the fight at this
stage but Chief Executive Lowell McAdam said the U.S.
government needs to find ways to make more airwaves available.
"If the government wants to stop a merger like that they
need to step up and say this is how we're going to get spectrum
in the hands of people who can use it," he said at a Goldman
Sachs investor conference in New York.
NO MOVEMENT TOWARDS SETTLEMENT
AT&T has said it is keenly interested in reaching a
settlement that would lead to Justice Department approval, and
has expressed confidence that the deal can go forward.
Since the lawsuit was filed, there has been no movement
towards reaching a settlement and the deal would have to be
substantially restructured in order to appease antitrust
enforcers, one source close to the case said this week.
"We are hopeful that we can reach a solution with the
Department of Justice that addresses their concerns, but if
not, we will be well prepared for trial," said AT&T spokesman
If the deal is abandoned, AT&T is facing paying upward of
$6 billion in cash and spectrum to T-Mobile.
The scheduling hearing was dominated by a related suit
filed by No. 3 wireless carrier Sprint Nextel (S.N). Huvelle
declined to consolidate the cases and set an Oct. 24 date for
arguments over AT&T's planned motion to dismiss.
The judge said she planned to decide whether Sprint had the
right to sue or not "as swiftly as possible."
Seven states have joined the Obama administration's
challenge to the deal, but on Wednesday, 10 other state
attorneys general urged that a settlement be reached so the
deal could go forward.
The case is USA v. AT&T, T-Mobile USA Inc and Deutsche
Telekom AG, U.S. District Court for the District of Columbia,
case No. 11-1560.
(Reporting by Jeremy Pelofsky and Jasmin Melvin; Additional
reporting by Diane Bartz in Washington and Sinead Carew in New
York; Editing by Tim Dobbyn)