AT&T defends T-Mobile deal, responding to U.S. antitrust case

AT&T Inc. said that its proposed $39-billion acquisition of T-Mobile USA Inc. is good for mobile-phone customers and that the U.S. lawsuit seeking to block the deal “fails to come to grips” with its benefits.

AT&T filed its response Friday to the Justice Department’s complaint in federal court in Washington. The company said the merger would lead to better service, fewer dropped calls and lower prices for consumers. AT&T cited fierce competition from Verizon Communications Inc., Sprint Nextel Corp., MetroPCS Communications Inc., Leap Wireless International Inc., U.S. Cellular Corp. and Cellular South Inc.

“The department does not and cannot explain how, in the face of all these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices or slow innovation,” AT&T said in the filing.

AT&T described T-Mobile as “the only major carrier to have actually lost subscribers in a robustly growing market” with a business model that has it trapped between large providers and lower-priced competitors.

The Justice Department sued Dallas-based AT&T and Bonn-based Deutsche Telekom’s T-Mobile unit Aug. 31, saying a combination of the two companies — which would make AT&T the biggest U.S. wireless carrier — would “substantially” reduce competition.

Mike Balmoris, an AT&T spokesman in Washington, said the company remains “interested in a solution that addresses the DOJ’s issues with the T-Mobile merger.”

The company said in the filing that the government’s characterization of AT&T, T-Mobile, Verizon and Sprint as the “big four” is misleading because the Federal Communications Commission recently reported that 90% of U.S. consumers have at least five wireless providers to choose from.