Carriers

Sprint sues to block AT&T acquiring T-Mobile USA

September 6, 2011 | by Andrew Kameka

AT&T, Sprint, T-Mobile

sprint-hesse

Since it was first announced in March, Sprint has been a vocal critic of the AT&T’s planned acquisition of T-Mobile USA. Sprint is now putting it’s many words to paper by filing suit against AT&T Mobility and Deutsche Telekom, T-Mobile’s parent company, for being anti-competitive.

Sprint’s lawsuit alleges that AT&T’s proposed takeover of T-Mobile USA would lead to higher prices for consumers and stagnant innovation in the mobile industry. The nation’s No. 3 carrier also fears the deal would create a “duopoly control of AT&T and Verizon, the two ‘Ma Bell’ descendants” over the mobile device market. The deal would harm the ability of Sprint and smaller carriers to obtain reasonable roaming rates and access to desired handsets.

The lawsuit follows the United States Department of Justice filing suit to block the AT&T-Mobile deal. Sprint has filed as a related case in an attempt to add its voice and discourage the deal from being allowed to take place.

“With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.” – Susan Z. Haller, VP of Litigation, Sprint.

The legality of the proposed deal boils down to the Clayton Antitrust Act, section 7. This is an antitrust law designed to prevent anti-competitive actions in a given industry. Mergers and acquisitions that would consolidate too much control into the hands of one company fall under government scrutiny as a result. I’ll let the well-paid lawyers argue over the validity of Sprint’s claims, but expect to hear a lot from Sprint in the next few months until this deal is approved or blocked by the DOJ/FTC.