Policy

Sprint Sues Over AT&T/T-Mobile, Too

9/12/2011 12:01 AM Eastern

Washington-- Sprint Nextel
has filed an antitrust suit against
the AT&T/T-Mobile deal in the
wake of last week’s antitrust suit
filed by the Justice Department.

Sprint has been among the
deal’s biggest critics.

The wireless provider’s suit alleges
the deal would harm retail
consumers by boosting prices
and reducing innovation, essentially
echoing arguments the Justice
Department made in its suit
and critics, including Sprint, have
been making in their continuing
opposition to the $39 billion deal.

Sprint said the combined company
would also have the ability to
exclude competitors for backhaul,
roaming and spectrum.

AT&T has said it will fight for its
deal and the public-interest benefi
ts it says would accrue, including
speedier deployment of advanced
wireless to rural areas, which is a
public interest goal of the Obama
administration and the Federal
Communications Commission.
The Internet Innovatiion Alliance
(AT&T is a member) was arguing
last week that the deal dovetailed
with the president’s jobs initative.

AT&T has pledged publicly to
fight the Justice Department suit in
court and is expected privately to
try to work something out with Justice,
which said last week its door
is open if AT&T is interested in resolving
Justice’s competition issues.
Given how many issues there
were, that would seem to be a tall
order.

Analysts last week saw the suit
as something between a body
blow and a death knell.

AT&T has reason to fight hard
for the deal, since it has a breakup
payout to T-Mobile of $3 billion
plus some spectrum and a roaming
agreement.

“This simply demonstrates what
we’ve said all along — Sprint is
more interested in protecting itself
than it is in promoting competition
that benefits consumers,”
AT&T said in a statement. “We, of
course, will vigorously contest this
matter in court.”

A federal district judge last week
set Sept. 21 for a scheduling conference
between the two parties
to come up with a timetable for
the suit.

There are at least a couple of
schools of thought on why Justice
filed suit, which AT&T said
came as a surprise. One is that
it fully intends to block the deal.
The administration has signaled
it would conduct vigorous antitrust
oversight. Another is that filing
suit signals the DOJ is serious
about antitrust issues while providing
an opportunity to insulate
any further talks with AT&T about
resolving those competition issues
from the political spotlight.

If it is the latter, AT&T will know
soon enough, though a meeting
with the DOJ had not been scheduled
at press time, according to
the source. If it is the former, AT&T
has pledged to vigorously fight for
the deal in court.

September