AT&T/T-Mobile USA deal hangs in the balance as court mulls shutting down legal hearing - Mobile World Live

AT&T/T-Mobile USA deal hangs in the balance as court mulls shutting down legal hearing

12 DEC 2011

A US court will decide this week whether to proceed with the government’s suit to block the AT&T/T-Mobile USA merger, after the government requested that it should not go ahead.

Bloomberg reports that the US Justice Department now thinks the case is unnecessary after AT&T withdrew its merger application at the Federal Communications Commission (FCC). However, the two operators view a positive outcome in the case – scheduled for 13 February – as the best hope of getting the controversial US$39 billion merger completed.

According to the report, the company’s strategy for regulatory approval rests on winning a favourable court decision it could use at the FCC to argue that the transaction is not anticompetitive. Without such a ruling, AT&T has no chance of getting the deal done, T-Mobile’s lawyer, George Cary, told US District Judge Ellen Segal Huvelle in Washington at a hearing late last week. “If this case doesn’t go ahead, then the deal is over,” he said. AT&T’s lawyer, Mark Hansen, added that the company “wants its day in court.”

But Huvelle described the strategy of pursuing regulatory approval following a possible court victory as “presumptuous,” adding that “the number of ifs in that scenario are mind-boggling.”

Meanwhile, Justice Department lawyer Joseph Wayland said the government will seek to put its suit on hold or withdraw it – while reserving the right to refile – following AT&T’s withdrawal of its FCC merger application.

"By saying they will file to dismiss, the Justice Department is calling AT&T’s bluff,” Andrew Gavil, an antitrust professor at Howard University School of Law in Washington, told Bloomberg. “They’re saying ‘You cannot manoeuvre us into litigation with you by withdrawing your application from the FCC.’”

The Justice Department launched its action against AT&T and T-Mobile USA in late August, claiming a combination of the two companies would “substantially” reduce competition in the US telecoms market.