Justice Department asks to delay AT&T's T-Mobile merger trial

The government's attorney says the trial could be delayed, since AT&T withdrew its application for merger approval from the FCC.

AT&T hasn't made many friends in the U.S. government.

Justice Department attorney Joseph Wayland today asked a federal judge to delay a trial between the parties over AT&T's proposed merger with T-Mobile USA, arguing that contrary to claims made by the wireless carrier, expediting the case isn't necessary. Wayland used AT&T's recent decision to withdraw its application for merger approval from the FCC to argue his point.

U.S. District Court Judge Ellen S. Huvelle planned a February trial to determine whether the merger would violate U.S. antitrust regulations. However, according to the Wall Street Journal, which first reported on the news, Huvelle has been annoyed by AT&T's decision to withdraw its merger application with the FCC, and said today that she may grant the Justice Department's delay request.

For its part, AT&T has said its pulling of the FCC application late last month was designed to let the company focus solely on the Justice Department, which filed a lawsuit in August attempting to block the $39 billion merger .

In a wide-ranging report released just a few days after AT&T withdrew its application, the FCC slammed the merger , calling it a potential drain on "innovation, investment, and consumer price and service benefits."

AT&T quickly responded to the report, calling it " one-sided " and suggesting that the FCC was ready to scuttle the deal before regulators even had a chance to examine it.

"The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis," Jim Cicconi, head of external and legislative affairs for AT&T, said in a blog post earlier this month. "In our view, the report raises questions as to whether its authors were predisposed."

In a statement to CNET regarding the Justice Department's move in court today, AT&T wasn't so abrasive, deciding instead to focus on its core message.

"We are anxious to bring to the American consumer the benefits of increased wireless network capacity and efficiencies that can only arise from combining the resources of AT&T and T-Mobile USA," AT&T Senior Executive Vice President and General Counsel Wayne Watts told CNET. "We are eager to present our case in court."

A delay in court proceedings between AT&T and the Justice Department could have profoundly negative effects on the proposed merger. Currently, T-Mobile USA parent company Deutsche Telekom stands by the merger plans, but with continued uncertainty and the possibility of such uncertainty dragging on for many more months to come, its management might grow antsy.

What's more, the merger's deadline can be pushed back only as late as September, giving the companies a finite amount of time to gain regulatory approval and close the deal. If the deal falls through for any reason, AT&T will owe Deutsche Telekom $4 billion .

Sprint, one of the more outspoken critics of the deal, plans to do everything it can to make the deal fall apart. In a statement to CNET, Sprint Senior Vice President of Government Affairs Vonya McCann said today's court proceedings not only illustrate concerns with the merger but also further steel the company's resolve to argue its case.

"As evidenced in court today, there are serious concerns about the future of AT&T's bid to take over T-Mobile," McCann said. "We share those concerns and we continue to prepare for trial in our antitrust suit."

 

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