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9/6/2011
04:41 PM
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Sprint Sues To Stop AT&T, T-Mobile Deal

AT&T's bid for T-Mobile will harm consumers and corporate customers through higher prices and diminished innovation, Sprint said.

Drafting on the waves made last week by the Department of Justice's antitrust lawsuit to block AT&T's proposed $39 billion acquisition of T-Mobile, Sprint Nextel on Tuesday filed its own legal complaint to halt the deal.

Deputy attorney general James M. Cole objected to AT&T's proposal on the grounds that it would limit competition in the the telecommunications industry and harm consumers. Sprint is making a similar argument.

"Sprint opposes AT&T's proposed takeover of T-Mobile," Susan Z. Haller, VP of litigation at Sprint, said in a statement. "With today's legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal."

Sprint claims that the proposed takeover would harm consumers and corporate customers through higher prices and diminished innovation, strengthen the AT&T/Verizon duopoly, and weaken Sprint and other independent wireless carriers.

In the complaint filed in Washington, D.C., Sprint charges that the acquisition of AT&T would remove "a low price and innovative maverick competitor," that Verizon would be more likely to cooperate with AT&T than compete with it, and that Sprint would be further marginalized, more limited in its ability to obtain desirable handsets like the iPhone, and more dependent on AT&T and Verizon for network backhaul and roaming.

AT&T senior EVP and general counsel Wayne Watts last week expressed surprise at the Department of Justice's objection to its proposed deal and requested an expedited review of the merger. Watts insisted that the deal would help improve wireless service for millions, allow AT&T to bring 4G LTE technology to another 55 million Americans, and result in billions of investment and tens of thousands of jobs.

The Communications Workers of America expressed support for AT&T's position last week, and skepticism about the future of T-Mobile. CWA telecommunications policy director Debbie Goldman in an emailed statement said that T-Mobile has no future as an independent entity. The company is losing customers and money, she said. She condemned Sprint for outsourcing and offshoring its customer service work, and drew a contrast with AT&T, "the only union wireless company [that] respects workers' rights."

If AT&T's bid for T-Mobile is denied by regulators, the company will be obligated to pay a break-up fee of about $6 billion to T-Mobile parent company Deutsche Telekom.

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