AT&T Inc. said its $39 billion deal to acquire T-Mobile will bring another 5,000 call-center jobs to the United States.
Although the nation's unemployment rate currently stands at 9.1 percent, the U.S. refused to be swayed by AT&T's offer of job creation, and has moved to block the merger between the telecom giants.
On Wednesday, the Justice Department filed an antitrust lawsuit to block the merger of AT&T and T-Mobile because it believes this combination will eliminate competition in the market and result in higher prices, fewer choices, and lower quality products for such services.
Deputy Attorney General James M. Cole recent spoke at an AT&T/T-Mobile press conference where he said AT&T and T-Mobile are currently in a head-to-head competition in 97 of the nation's largest 100 cellular marketing areas. The two companies also compete nationwide to attract business and government customers, he added.
The Department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services, Cole said. Were the merger to proceed, there would only be three providers with 90 percent of the market, and competition among the remaining competitors on all dimensions-including price, quality, and innovation-would be diminished.
DOJ's 25-page complaint declares that competition in the wireless industry is essential for continued innovation and to maintain low prices.
Billions in Investment
Wayne Watts, AT&T's senior executive vice president and general counsel, said the company is going to fight the lawsuit, which he said has left him surprised and disappointed because AT&T has met with the Justice Department and there was indication there were intention file a lawsuit.
Watts said AT&T plans to ask for an expedited hearing so the enormous benefits of the merger can be fully reviewed.
The [Department of Justice] has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court, he said in a statement, adding that merger will result in billions of additional investment and tens of thousands of jobs, at a time when the nation needs them most.
A decisive victory for consumers
Other telecom companies are glad the government decided to intervene in the AT&T/T-Mobile takeover.
Vonya B. McCann, senior vice president of Government Affairs for Sprint, issued a statement shortly after the Justice Department announced filing the lawsuit and applauded the government's move.
The [Department of Justice] today delivered a decisive victory for consumers, competition and our country, McCann said. By filing suit to block AT&T's proposed takeover of T-Mobile, the DOJ has put consumers' interests first.
McCann said the decision by the Justice Department is just one, which will ensure that consumers continue to reap the benefits of a competitive U.S. wireless industry.
Contrary to AT&T's assertions, today's action will preserve American jobs, strengthen the American economy, and encourage innovation, McCann said.
According to the Financial Times, months before AT&T unveiled the $39 billion bid for T-Mobile, it sought to sweeten regulators by sending 1,500 cupcakes to the Federal Communications Commission's Washington offices.
AT&T announced the deal in March.
The FCC is continuing its review of the proposed $39 billion acquisition of T-Mobile, which is expected to take 180 days.