The U.S. Government has finally played their hand and decided to file an antitrust lawsuit against AT&T to prevent the company's proposed merger with T-Mobile USA.
In the complaint filed today, the U.S. government asked for a court order to prevent AT&T's takeover claiming the deal would "substantially lessen competition." The stakes are high for AT&T. The deal brokered between AT&T and T-Mobile can be seen as a win-win for T-Mobile's parent company Deutsche Telekom. If the merger is approved, the newly formed company is the largest wireless carrier in the United States. If the deal folds, AT&T is required to pay Deutsche Telekom $3 billion in cash.
The deal gets even sweeter too. AT&T would also be on the hook for providing T-Mobile USA with wireless spectrum in some regions, and reduced charges for calls into AT&Ts network. This would increase the price of AT&T's liability to around $7 billion, and this is if the deal doesn't get done! AT&T will fight this lawsuit, and fight hard.
A decision by by the courts is still a ways off and the FCC still hasn't approved the deal as they are going over newly submitted data. The data submitted by AT&T is supposed to show, somehow, that the acquisition would lower costs in addition to strengthen AT&T's network. Even if they regulators approve, the Justice Department's suit could prevent the merger. However, as Andrew Gavil, a Howard University Law Professor, points out, AT&T has a lot to lose.
Given the size of the cancellation fee that was negotiated into his agreement, AT&T has the incentive to fight. The fact that the Justice Department is challenging the deal doesn’t mean they won’t negotiate a resolution at some point. - Gavil
The fact this lawsuit was even filed is a preliminary victory for the American consumer. Dealing with telecoms is already bad enough. Choosing a telecom provider is akin to choosing what devil to dance with at an exceptionally bad high school reunion. There's no need to make AT&T the DJ.