AT&T/T-Mobile Judge Wants Trial to Start in February
Judge Ellen Huvelle left little doubt Wednesday she plans to move quickly to consider and rule on the Department of Justice’s lawsuit seeking to block AT&T’s buy of T-Mobile. Huvelle said she wanted to start a trial in mid-February, asking AT&T and DOJ lawyers to confer on a start date. A preliminary hearing on the legal challenge to the transaction took a little more than an hour and was well attended. Among those in the crowd was FCC Wireless Bureau Chief Rick Kaplan and Renata Hesse, aide to Chairman Julius Genachowski on transactions.
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"There are many, many lawyers here, perhaps more than I can count,” Huvelle said as action got underway. “I think we need to address some of the things that have been raised.” The judge was low-key, but signaled strongly they she did not want unnecessary delays. She asked that testimony be sent to her in written form ahead of the trial and asked numerous questions about how many witnesses would be called in for pre-trial discovery by DOJ and AT&T. “It’s not in anyone’s interest to overwhelm me,” she said.
Mark Hansen, representing AT&T, said a quick decision is critical, saying the company originally wanted to go to trial in November. “Everyone agrees that we need to have this cloud of uncertainty removed,” he said. Hansen. of Kellogg Huber, also said that as the trial moves forward AT&T plans to call about the same number of witnesses as the government. “The rules should be the same for both sides,” he said. “We just want to make sure it’s a fair process."
Huvelle did not rule on whether Sprint Nextel and Cellular South, both of which have also sued to block the deal, would be allowed to join DOJ’s suit. Huvelle suggested that the two carriers could be better served by supporting DOJ’s lawsuit, she told lawyer Steve Sunshine who represented both. “Why is it in your interest not to let the Department of Justice do the work and not let your client pay for it?” Huvelle questioned how much precedent there is to add a private company as a party to a DOJ merger case. “It’s going to be a much different case having other people come into it,” she said.
Huvelle denied Sprint’s request that the company have access to data uncovered in discovery. She scheduled oral argument on that issue for Oct. 24 so both AT&T and its two competitors can argue over whether they should be added to the case. Sunshine said the carriers have raised many unique issues that set their opposition apart from that by DOJ. AT&T wants “to go very fast,” he said. “They want to out us on ice.”
Meanwhile, ten state attorneys general supported a settlement that would let the AT&T/T-Mobile deal proceed, they said in a letter to Acting Assistant Attorney General Sharis Pozen and FCC Chairman Julius Genachowski. The attorneys general said they “urge both DOJ and the FCC to focus on ways to resolve specific competitive concerns so this merger can proceed and deliver the significant benefits not only for wireless consumers."
The DOJ’s lawsuit wouldn’t necessarily prevent future industry consolidation, Sprint Nextel CEO Dan Hesse said at the Goldman Sachs conference Wednesday. While Hesse said he’s not suggesting Sprint would pursue a deal with T-Mobile USA if the deal falls through, he said combination of two value players would mean better competition in the industry than AT&T purchasing T-Mobile. Any potential T-Mobile buyer would need to demonstrate that the benefits of removing T-Mobile from the market would outweigh the downsides, he said. Verizon CEO Lowell McAdam, speaking at the same conference, said he’s closely watching DOJ’s deliberations. “We need to be very thoughtful on what the impacts would be to the overall industry” if this is a way to regulate the industry without passing regulation, he said. If the regulators were to kill the deal, they need to figure out how to get more spectrum in the market, he said.