AT&T and T-Mobile merger in jeopardy as Justice Department takes action
An AT&T and T-Mobile merger would mean 'higher prices' for customers, says the Justice Department, which is suing to block the deal. Is the AT&T and T-Mobile merger now a bust?
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Indeed, Sprint CEO Dan Hesse has been one of the most vocal opponents of the AT&T and T-Mobile merger.Skip to next paragraph
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"The DOJ today delivered a decisive victory for consumers, competition and our country," says Mr. Hesse in a statement today. "Contrary to AT&T’s assertions, today’s action will preserve American jobs, strengthen the American economy, and encourage innovation."
(There are also rumors that a broken deal with AT&T could lead the way for a T-Mobile merger with Sprint.)
Publicly, AT&T expressed shock at the Justice Department's suit.
"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," the company said in a statement Wednesday. "We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court."
The carrier argues that its merger with T-Mobile would improve wireless service. Joining forces would expand AT&T's 4G network to include more Americans, it says, and would allow the company to more effectively utilize the wireless spectrum that carries cell phone signals. Such a deal would also bring "billions of additional investment and tens of thousands of jobs," according to AT&T. Just this week, the company announced plans to bring 5,000 call center jobs back the states, should the deal go through.
So now the Justice Department has started swinging, what are the odds that this merger will go through?
"The Department of Justice will prevail," Reed Hundt, a former chair of the Federal Communications Commission, told Yahoo news. "The Justice Department in its entire history has never lost a telecom case of this sort."