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U.S. Justice Department sues to stop AT&T merger with T-Mobile

August 31, 2011 |  9:13 am













The U.S. Justice Department is suing to block the $39-billion acquisition of cellular phone company T-Mobile by telecom giant AT&T.

Deputy Atty. Gen. James M. Cole said that the acquisition  "would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services."

The Obama administration called T-Mobile "an important source of competition among the national carriers." Currently, AT&T and T-Mobile now compete head to head in 97 of the nation's largest cellphone markets. That competition would be eliminated by the acquisition, which would create the nation's largest wireless communications company, the government said.

DOCUMENT: Read the antitrust lawsuit

AT&T currently is the second-biggest cellular provider, and T-Mobile is the fourth-biggest as measured by the number of subscribers, the Justice Department said.

AT&T did not immediately respond to the government's announcement.

Earlier in the day, AT&T announced that if the takeover of T-Mobile goes through, it would repatriate 5,000 call-center jobs -- which had been outsourced overseas -- to the United States.

"At a time when many Americans are struggling and our economy faces significant challenges, we're pleased that the T-Mobile merger allows us to bring 5,000 jobs back to the United States and significantly increase our investment here," said Randall Stephenson, AT&T chairman and chief executive.

Stephenson's statement was applauded by labor union leaders.

"Cuts in wages, benefits and jobs have become the new normal in America, so that when a company like AT&T takes action to bring back quality jobs, it's big news," said Larry Cohen, president of the Communications Workers of America union.

The proposed merger currently is being studied by the Federal Communications Commission. The California Public Utilities Commission also is investigating the pros and cons of the proposed deal.


FCC restarts the clock on review of merger between AT&T and T-Mobile

Free alternatives may cut into text messaging profits

Credit: Associated Press

-- Marc Lifsher