AT&T/T-Mobile Counter Government Case Against Their Deal
AT&T’s buy of T-Mobile will “usher in more intense competition” in “an already vibrantly competitive market,” the companies and Deutsche Telekom said in a filing with the U.S. District Court in Washington handling the Department of Justice’s lawsuit to block the deal. The case is set to be tried before Judge Ellen Huvelle in February unless DOJ and the carriers reach a settlement. AT&T on Wednesday filed a 26-page response to the government’s complaint.
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"While acknowledging the importance of merger efficiencies in enhancing competition in the Department of Justice’s Merger Guidelines” the government “fails to come to grips with the significant efficiencies this transaction will generate,” the companies said. “Plaintiffs’ Amended Complaint similarly fails to depict accurately the state of competition in mobile telecommunications today, the dynamic nature of the wireless industry, or the pro-competitive and pro-consumer impact of this transaction.”
The government “largely ignores the significant competition from established providers such as Verizon Wireless and Sprint, innovative upstarts such as MetroPCS and Leap/Cricket, and strong regional providers like US Cellular and Cellular South, among others,” the pleading asserts. “Plaintiffs do 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.”
The complaint also fails to explain how T-Mobile, which has lost customers as the wireless industry thrives, “provides a unique competitive constraint on AT&T,” the carriers said. T-Mobile will face a real predicament if the deal doesn’t go through, the filing contends: “T-Mobile’s business model remains ’stuck in the middle’ between larger providers like Verizon, AT&T, and Sprint, and lower-priced competitors like MetroPCS and Cricket. And T-Mobile’s German parent, Deutsche Telekom, announced that it would not continue to make significant investments in the United States.”