AT&T Responds to Justice Department Suit
Sep 10, 2011, 8:54 AM by Eric M. Zeman
AT&T on Friday filed a more formal response to the Department of Justice's lawsuit against it's proposed acquisition of smaller rival T-Mobile. AT&T argues that competition in the market will actually suffer if it doesn't acquire T-Mobile. "Although the transaction will remove T-Mobile as an independent competitor, no significant consumer harm will result," AT&T said in its filing. "The Department does not and cannot explain how, in the face of all of these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation. Nor can it explain how T-Mobile, the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T." AT&T claims that "innovative upstarts" such as MetroPCS, Cricket Wireless, Cellular South, and U.S. Cellular represent a significant competitive threat to AT&T. AT&T also believes the Justice Department has overlooked how the acquisition will create efficiencies in the combined entity. AT&T closes by saying that by blocking the acquisition, the government will do more harm than good in the long run. "Without this merger, AT&T will continue to experience capacity constraints, millions of customers will be deprived of faster and higher quality service, and innovation and infrastructure will be stunted. If this transaction does not close due to Plaintiff's lawsuit, wireless consumers will, as the FCC Chairman predicts, increasingly face higher prices and lower quality."
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