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Last updated on April 18, 2014 at 21:21 EDT

Sprint, AT&T Face Off At Anti-trust Hearing

October 25, 2011

Sprint Nextel Corp urged a federal judge on Monday to reject AT&T Inc.´s proposed $39 billion acquisition of T-Mobile USA, saying the merger would leave the United States with just two major wireless companies.

Speaking at a hearing Monday in Washington DC over AT&T´s motion to dismiss Sprint´s case, Steven Sunshine, Sprint´s attorney, said the merger would increase AT&T´s market power, and allow them to secure exclusive handset deals.

“If the merger goes through it will tip the market towards duopoly,” Bloomberg News quoted Sunshine as saying.

“It will make it difficult for Sprint to get key inputs like handsets, as well as raise costs for roaming and backhaul.”

However, AT&T argued in court papers that antitrust laws prohibit Sprint from challenging the acquisition because they are a competitor, rather than a consumer, and urged U.S. District Judge Ellen Segal Huvelle to reject Sprint´s challenge.

A dismissal would simplify AT&T’s battle to win approval for its proposed acquisition by allowing the Dallas-based telecom giant to focus on fighting a separate antitrust challenge by the Justice Department, which sued to block the transaction on August 31.  That case is scheduled to go to trial on February 13.

Sprint filed its lawsuit against the AT&T/T-Mobile merger on September 9, and has partnered with Ridgeland, Mississippi-based Cellular South Inc., which filed a similar suit on September 19.

AT&T is also asking Judge Huvelle to dismiss Cellular South´s lawsuit.

Monday’s hearing will determine whether Overland Park, Kansas-based Sprint is allowed to participate in the case against AT&T.  
Should AT&T succeed in persuading Judge Huvelle to dismiss the case, Sprint´s ability to help the Justice department block the deal would be lessened.

The government´s case is U.S. v. AT&T Inc., 11-01560; Sprint´s case is Sprint Nextel Corp. v. AT&T Inc., 11-01600; and Cellular South´s case is Cellular South Inc. v. AT&T Inc., 11- 01690, U.S. District Court, District of Columbia.

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Source: RedOrbit Staff & Wire Reports