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Daily Newscasts

Justice Department Hangs Up on AT&T T-Mobile Merger

September 1, 2011

NEW YORK - Consumer groups are hailing the decision by the Justice Department to go to court to block the merger of AT&T and T-Mobile on anti-trust grounds. The lawsuit, filed Wednesday, aims to stop the $39 billion deal, which would combine the nation's second- and fourth-largest wireless carriers. The new entity would leapfrog over number one Verizon Wireless and create what critics called a "virtual duopoly," with Sprint Nextel a distant third.

Parul Desai, policy counsel for the Consumers Union, lauds it as a "bold move."

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

AT&T said it would "vigorously contest" the matter in court. On Tuesday, in a move to counter criticism that the merger is a job-killer, the company had said it would bring some overseas call centers back to the U.S. to create 5,000 jobs.

Desai says workers should be among those cheering for the Justice Department.

"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 Department of Justice stuck to the facts and found that this was a bad deal for Americans all across the country."

Grassroots Policy Director Amalia Deloney with the Center for Media Justice says her group has been working hard at building a grassroots movement against the merger, and it paid off.

"It once again demonstrates to average, everyday people that 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."

An AT&T spokesman said the company was surprised and disappointed by the Department of Justice action.

Mark Scheerer, Public News Service - NY