DOJ Officials React to AT&T's Decision To Abandon Merger with Rival T-Mobile

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By Cecelia M. Assam & Paul Barbagallo  

In a joint statement issued on Dec. 19, two Department of Justice officials celebrated a “victory” for consumers with the decision of AT&T Inc. to abandon the acquisition of rival T-Mobile USA from its parent, Deutsche Telekom AG.

AT&T earlier that day announced that it has abandoned its bid to acquire T-Mobile, the biggest merger deal in the telecommunications industry in the last decade.

Deputy Attorney General James M. Cole called AT&T's decision “a victory for the millions of Americans who use mobile wireless telecommunications services.” He added that a “significant competitor remains in the marketplace” and that consumers “will benefit from a quick resolution of this matter without the unnecessary expense of taxpayer money and government resources.”

Acting Assistant Attorney General Sharis A. Pozen, Chief of DOJ's Antitrust Division, shared this sentiment.

“Consumers won today. Had AT&T acquired T-Mobile, consumers in the wireless marketplace would have faced higher prices and reduced innovation. We sued to protect consumers who rely on competition in this important industry. With the parties' abandonment, we achieved that result.”

DOJ challenged the proposed acquisition on Aug. 31. The complaint, filed in the U.S. District Court for the District of Columbia, alleged that the concentration would combine two of the only four wireless carriers with nationwide networks. Attorneys general from California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Puerto Rico, and Washington joined with DOJ as co-plaintiffs.

DOJ coordinated its review of the proposed transaction with the Federal Communications Commission.

AT&T made the decision to abandon the deal after it suffered some setbacks in obtaining regulatory clearance and approval.

Randall Stephenson, AT&T Chairman and CEO, said in a statement: “AT&T will continue to be aggressive in leading the mobile Internet revolution.”

AT&T, he reported, has invested, over the past four years, “more in our networks than any other U.S. company. As a result, today, we deliver best-in-class mobile broadband speeds—connecting smartphones, tablets, and emerging devices at a record pace—and we are well under way with our nationwide 4G [fourth-generation] LTE [long term evolution] deployment.”

AT&T will be obligated to pay Deutsche Telekom, T-Mobile's parent company, a $4 billion breakup fee. AT&T expects to recognize a pretax accounting charge of $3 billion in cash and $1 billion worth of spectrum this quarter.