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Justice Department and Rick Perry Don't Agree on Wireless Merger

September 1, 2011

NEW YORK - Texas Gov. Rick Perry has been urging the Federal Communications Commission to approve a merger of AT&T and T-Mobile, saying it would be good for competition in the wireless industry. On Wednesday, however, the Justice Department blocked the proposal on anti-trust grounds.

Consumer groups are hailing the decision. The federal suit filed Wednesday aims to stop the $39 billion deal combining the second- and fourth-largest wireless carriers. The new entity would have leapfrogged over No. 1 Verizon Wireless, creating what critics called a virtual duopoly, with Sprint Nextel a distant third.

Parul Desai, policy counsel for Consumers Union, calls it a bold move.

"We're happy that the Department of Justice recognized that this would lead to less competition, less choice, ultimately higher prices for consumers. And I think this is a great day and a great win for consumers all across the country."

With three major T-Mobile call centers in Texas at risk, workers' advocates have denounced the merger. Desai says workers should be among those cheering for the Justice Department.

"I just think that, based on the facts, it's clear that this would have been a bad transaction across-the-board for workers and consumers, and we're glad that the DOJ stuck to the facts and found that this was a bad deal for Americans all across the country."

Amalia Deloney, grassroots policy director for the Center for Media Justice, says her group has been working hard at building a grassroots movement against the merger, and she feels it's paid off.

"It once again demonstrates to average, everyday people that things like job loss, innovation, creativity, price control and the ability to stay in contact with friends and family are actually things that people all across the country care about, and together we can make a difference."

AT&T said it was surprised and disappointed by the Justice Department action, and would "vigorously contest" the matter in court. The company had said Tuesday it would bring some overseas call centers back to the United States to create 5,000 jobs to help counter criticism the merger is a job-killer.

Peter Malof, Public News Service - TX