Department of Justice Blocks AT&T Merger with T-Mobile

The Department of Justice (DOJ) today filed an antitrust lawsuit to block the proposed merger of AT&T with T-Mobile which would create the country's largest wireless provider by number of subscribers leapfrogging Verizon. The DOJ argues an AT&T/T-Mobile merger would stifle competition and leave consumers with less choices since the proposed new company and Verizon would control more than two-thirds of wireless subscribers in the U.S.  According to James Cole, deputy attorney general:  

"We feel the combination of AT&T and T-Mobile would result in tens of millions of consumers across the U.S. facing higher prices, fewer choices, and lower quality products for wireless services..."

  AT&T argued the merger with T-Mobile was necessary to achieve its goal of building and expanding the faster 4G network to cover most of the country.  The DOJ did not buy this argument saying AT&T could achieve its goal by investing toward building the infrastructure necessary for its 4G network. As if today's statements from DOJ wasn't bad enough, the Federal Communications Commission also raised red flags about the proposed merger.  According to FCC Chairman Julius Genachowski, the merger raises "serious concerns about the impact ... on competition."