Report: DOJ asks for more info on AT&T/T-Mobile deal
The U.S. Justice Department is asking for more information as it takes a deep dive into its investigation of AT&T’s proposed $39 billion purchase of T-Mobile USA, Bloomberg reported today.
According to two unnamed sources familiar with the situation, Bloomberg said that the Justice Department’s antitrust division also sent “civil investigative demands,” which are like subpoenas, to competitors of the two companies. The Justice Department is seeking more information on how the deal will affect other wireless businesses, Bloomberg reported.
Neither AT&T nor T-Mobile would comment on the story. And the Justice Department is not officially commenting either.
It’s not surprising that the government would take a harder look at the merger. But it’s pretty clear that the investigation will likely take longer than the 12 months that AT&T had predicted when it announced the deal in March.
The Federal Communications Commission is also looking into the matter, and it must also approve the transaction.
New York Attorney General Eric Schneiderman also said his office will look closely at the proposed deal. While the transaction must be approved by the FCC and the Justice Department, state governments can also play an important role in a merger of this size.
States, along with the federal government and private parties, can bring antitrust action against a company. The implied threat by the New York attorney general’s office is that if the state investigation is not happy with the antitrust implications of the deal, it will sue AT&T in court asking for an injunction to block the merger. This could lead to New York and other states being involved in crafting concessions that will become part of the FCC’s and/or the Justice Department’s conditions for the merger.
In addition to the states’ attorney general offices, Sprint Nextel, which opposes the merger, said this week that it plans to go to state public service commissions about the planned deal.
Sprint attorneys requested a contested-case proceeding on AT&T’s filing in the state of West Virginia yesterday. Sprint plans to file similar action in other states. It is looking specifically to address states with aggressive consumer protection laws that are enforced by the public service commissions, which regulate terms and conditions in customer contracts.
In general, Sprint and consumer advocates are concerned about the proposed merger because it would combine the nation’s No. 2 largest wireless provider with the No. 4 largest wireless provider. And it would eliminate a competitor, leaving only three national wireless providers. AT&T would become the largest and Verizon Wireless would be second. Together these operators would control over 80 percent of the wireless market in the U.S.
AT&T says that it is confident that the deal will meet what’s required by regulators. And the company says that it needs T-Mobile to ensure that the company can keep up with growing demand for new wireless data services on its network.