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By Paul Barbagallo
The Department of Justice should settle its lawsuit seeking to block AT&T Inc.'s proposed $39 billion acquisition of T-Mobile USA, 100 Republican lawmakers said in a letter to President Obama Sept. 20.
The GOP members said the Justice Department's suit would only “thwart job creation and economic growth.” Noting AT&T's commitment to build out infrastructure necessary to offer 4G (fourth-generation) LTE (long-term evolution) mobile broadband service to 97.3 percent of all Americans, the letter argues for a settlement in light of a recent announcement by AT&T to bring 5,000 jobs to U.S. call centers.
“If your administration is truly committed to creating jobs, you should let the private sector do so, not erect impediments to job creation based upon a flawed understanding of the competitiveness of the U.S. wireless market,” the Republicans, led by Rep. Pete Olson (R-Texas), wrote in their letter. “According to the Federal Communications Commission's most recent wireless competition report, 90 percent of Americans enjoy a choice of five or more wireless providers in their local markets. That is a competitive market, one where consumers will still experience the vigorous competition that has resulted in decreasing prices, improving service quality, and never-ending device innovation. We believe strongly in ensuring competitive markets and protecting consumers. Likewise, we would hope that a settlement agreement that ensures competition, capital infrastructure investment, and jobs would be a key goal for this administration.”
The DOJ, in its 25-page civil antitrust lawsuit filed in the U.S. District Court for the District of Columbia, said AT&T's takeover of T-Mobile would “substantially lessen competition” in the wireless market in violation of Section 7 of the Clayton Act, leading to higher prices and poorer service quality.
One of the largest deals since the 2008 financial crisis, the proposed merger of AT&T and T-Mobile would combine the second- and fourth-largest wireless carriers in the United States, and supplant Verizon Wireless as the No. 1 carrier in the country.
AT&T and T-Mobile would together serve a combined 130 million customers nationwide, compared to Verizon's 97 million. As the nation's new No. 1 and No. 2 providers, AT&T and Verizon would control 76.2 percent of the market for post-paid wireless voice and data communications services. Even after adding net subscribers this year, Sprint Nextel Corp.—currently the No. 3 provider—ended 2010 with just 50 million subscribers.
U.S. District Court Judge Ellen Huvelle has ordered AT&T and DOJ to appear for a Sept. 21 status conference, at which she said the parties should “be prepared to discuss the prospects for settlement.”
DOJ last week proposed a scheduling and case-management order with the court. “The parties have reached agreement on all aspects of the proposed Order, except an actual trial date, which impacts the intervening dates,” the DOJ filing said. The Justice Department has proposed Monday, March 19, 2012, to be ready for trial, while AT&T and T-Mobile proposed Monday, Jan. 16, 2012.
“The parties are prepared to address their differences on timing at the status conference scheduled for September 21, 2011, along with the other issues raised in the Court's Minute Order,” the DOJ filing stated.
Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.), the respective chairmen of the House Energy and Commerce Committee and its Communications Subcommittee, did not sign on to the letter, but had recently called for a briefing on its decision to file suit against AT&T to block the deal. Earlier this week, the DOJ rejected the request in a letter.
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