Federal AT&T-T-Mobile Suit Joined by New York, Six Other States

Sara Forden and Tom Schoenberg BusinessWeek 09/16/2011 15:19

The U.S. lawsuit seeking to block AT&T Inc.’s acquisition of T-Mobile USA Inc. was joined by seven states as their attorneys general said the proposed $39 billion deal would hurt competition and raise wireless telephone prices.

The states joining the amended complaint filed yesterday by the U.S. Justice Department in federal court in Washington were New York, California, Massachusetts, Washington, Ohio, Pennsylvania and Illinois.

Participation by the states bolsters the Justice Department’s position and means any negotiated settlement of the case would have to win the states’ approval, said Herbert Hovenkamp, a professor and antitrust expert at the University of Iowa College of Law.

“If the federal government wants to go for a settlement and the states don’t like it, they can hold out,” Hovenkamp said in an interview. “The judge would have to listen to their complaints.”

The government’s antitrust suit claims that the merger of the two companies, which would make Dallas-based AT&T the biggest wireless carrier in the U.S. and cut the number of national competitors to three from four, is anticompetitive.

Michael Balmoris, a spokesman for AT&T, said 11 state attorneys general support the deal.

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