The US lawsuit seeking to block AT&T Inc.’s acquisition of T-Mobile USA Inc was joined by seven states as their attorneys general said the proposed $39-billion deal would hurt competition and raise wireless telephone prices.
The states joining the amended complaint filed yesterday by the US justice department in federal court in Washington were New York, California, Massachusetts, Washington, Ohio, Pennsylvania and Illinois.
Participation by the states bolsters the justice department’s position and means any negotiated settlement of the case would have to win the states’ approval, said Herbert Hovenkamp, a professor and antitrust expert at the University of Iowa College of Law.
“If the federal government wants to go for a settlement and the states don’t like it, they can hold out,” Hovenkamp said in an interview. “The judge would have to listen to their complaints.” The government’s antitrust suit claims that the merger of the two companies, which would make Dallas-based AT&T the biggest wireless carrier in the US and cut the number of national competitors to three from four, is anticompetitive.
Michael Balmoris, a spokesman for AT&T, said 11 state attorneys general support the deal.
“We will continue to seek an expedited hearing on the justice department’s complaint,” he said in an e-mail. “On a parallel path, we have been, and remain, interested in a solution that addresses the department’s issues with the T- Mobile merger.”
AT&T Inc and the US justice department yesterday filed an agreed-upon proposal for managing the case, with the exception of a dispute over a trial date. AT&T is pushing to start on January 16 while the US proposes March 19, according to the filing.
The case management plan sets deadlines for submitting witness lists, taking sworn statements and exchanging documents. Depositions of witnesses will be limited to 30 per side, according to the agreement.
US District Judge Ellen Segal Huvelle has set a hearing for September 21 on the scheduling and told the parties to be prepared to discuss settlement options.
The bipartisan group of state officials provided “invaluable assistance” in the probe that led to the lawsuit’s filing on August 31, the department said in a statement.
The attorneys general of New York, California, Massachusetts and Illinois are Democrats while their counterparts in Ohio, Pennsylvania and Washington are Republicans. “Blocking this acquisition protects consumers and businesses against fewer choices, higher prices, less innovation, and lower quality service,” Illinois Attorney General Lisa Madigan said in an e-mailed statement.
New York Attorney General Eric Schneiderman, who helped coordinate the states’ group, said the proposed merger would also reduce access to “low-cost options.”