Ina Fried

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AT&T Surprised by Government’s Move to Block T-Mobile Deal

AT&T said it had no indication that federal regulators would seek to block the company’s planned $39 billion deal to buy T-Mobile USA. Earlier on Wednesday, the Justice Department filed suit to stop the acquisition, while the chairman of the Federal Communications Commission said that agency has concerns as well, though it had not yet finished its review.

AT&T has been lobbying heavily in favor of the deal, most recently pledging to add call-center jobs in the U.S. if the deal were approved. Meanwhile, Sprint and some consumer groups have vigorously opposed the deal, saying it would harm competition and lead to higher prices.

In a statement, AT&T general counsel Wayne Watts said the company was “surprised and disappointed” by the DOJ move and will seek an expedited hearing to make its case to the courts in favor of the deal.

Here’s his full statement:

We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

· Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.
· Allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97% of the population;
· Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.


Update:
Sprint, meanwhile, was predictably pleased with the DOJ move, calling it “a decisive victory for consumers, competition and our country.”

“By filing suit to block AT&T’s proposed takeover of T-Mobile, the DOJ has put consumers’ interests first,” Sprint Senior VP Vonya McCann said in a statement. “Sprint applauds the DOJ for conducting a careful and thorough review and for reaching a just decision — 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.”


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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald