AT&T/T-Mobile Merger Faces Another Suit

By Josh Long

AT&Ts legal woes continue to pile up in connection with its $39 billion acquisition of T-Mobile USA.

Cellular South has filed a lawsuit in federal court to block the controversial merger, joining Sprint, seven states and the U.S. Department of Justice.

The Ridgeland, Miss.-based wireless provider reportedly has filed suit in the U.S. District Court for the District of Columbia. Thats the same court where the other cases against the merger are pending.

The latest complaint claims the AT&T/T-Mobile merger will harm competition, impacting regional carriers, including Cellular South, who will find it harder to secure both wireless devices at competitive prices and times and nationwide roaming,” CNET reported, quoting the lawsuit.

AT&T, whose moniker dates back to Alexander Graham Bell, appears to face an uphill battle in its attempt to purchase T-Mobile USA. Although the company has pledged to fight the Department of Justice in court, reports have surfaced that AT&T has sought ways to mollify the U.S. government by making certain concessions. For example, Bloomberg reported that AT&T has approached smaller competitors to gauge their interest in purchasing assets.

AT&T and the Justice Department are due in federal court for a status conference with the judge, Ellen S. Huvelle, on Sept. 21, at which time the parties are expected to discuss the prospect of a settlement.

The Justice Department claims in its antitrust suit that the merged AT&T/T-Mobile would control more than 40 percent of the wireless market in several areas while controlling more than half of the market in at least 15 cellular marketing areas.

In its answer to the lawsuit, AT&T dismissed T-Mobile USA as a serious competitor and defended the benefits of the merger. AT&T also claimed the DOJs complaint largely ignored the significant competition” in the marketplace, driven by national providers such as Verizon and Sprint, such upstarts as MetroPCS and regional carriers like Cellular South.

Bellevue, Wash.-based T-Mobile USA has been struggling with subscriber losses and its German parent Deutsche Telekom AG has announced it wont continue to make significant investments in the United States, but opponents of the merger claim T-Mobile continues to exert competitive pressure on the likes of AT&T and Verizon Wireless.