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AT&T requests court dismisses Sprint and Cellular South lawsuits

3 Oct 2011

AT&T has reportedly urged the federal court in Washington to dismiss lawsuits brought against it by its rivals Sprint Nextel and Cellular South, alleging that its proposed USD39 billion purchase of wireless operator T-Mobile USA would be anticompetitive. According to Bloomberg, AT&T has claimed that its rivals have failed to satisfactorily demonstrate that the deal would hurt competition or impair access to networks needed to serve their customers. AT&T’s latest filing reads: ‘Sprint knows that competition will be enhanced, not harmed, by the combination of AT&T and T-Mobile and that a post-merger AT&T – freed of spectrum shortages that impair its ability to offer customers better services at lower prices – will be a more formidable competitor. What is good for consumers is bad for Sprint, and that is why Sprint has filed suit. Sprint does not purchase roaming services from either AT&T or T-Mobile – its network is technologically incompatible. The transaction will therefore have no impact on Sprint’s ability to obtain roaming prices. The immediate impact of any supposed reduction in demand for special access as a result of the merger would be to reduce the prices that Sprint pays for special access, not to increase them. That reduction in prices would benefit Sprint and would not constitute antitrust injury’. Meanwhile, with reference to Cellular South, AT&T stated: ‘Cellular South suggested that it would not oppose the merger if AT&T would agree not to engage in facilities-based competition in Mississippi. This inappropriate proposal confirms that what Cellular South fears is competition, not lack of competition’.

As previously reported by TeleGeography’s CommsUpdate, in late-August the US Department of Justice (DoJ) filed a civil antitrust lawsuit to prevent AT&T from acquiring T-Mobile from Germany’s Deutsche Telekom. At the time deputy attorney general James M Cole commented: ‘The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services … This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition’. On 6 September Sprint brought its own antitrust lawsuit against AT&T, and Cellular South followed suit on 19 September, claiming that the merger ‘threatens to substantially lessen competition’ and cause it significant losses and damages. Seven US states – and Puerto Rico – have subsequently thrown their weight behind the DoJ’s case.

United States, AT&T, AT&T Communications, C Spire Wireless, Sprint Corporation (became part of T-Mobile US)

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