Sprint Nextel Wants States to Review AT&T’s Proposed T-Mobile Purchase

Sprint Nextel Corp. (S) said it wants state agencies in California and West Virginia to follow Louisiana in scrutinizing AT&T Inc. (T)’s proposed purchase of T- Mobile USA Inc.

Third-largest U.S. wireless carrier Sprint filed a request with the California Public Utilities Commission yesterday requesting an investigation into the $39 billion transaction, the company said in an e-mail.

“This transaction is bad for consumers and bad for the economy, and we look forward to having some regulatory sunshine cast upon it,” John Taylor, a spokesman for Overland Park, Kansas-based Sprint, said in an interview. California and West Virginia should open reviews, as Louisiana has, he said.

On May 17, the Louisiana Public Service Commission voted 4- 1 to open an inquiry, Commissioner Foster Campbell said in a phone interview yesterday.

“It’s too big a deal to let it go through without getting everybody’s questions answered, and making sure this is a good deal for the consumer,” said Campbell, a Democrat.

The deal needs approval from two U.S. agencies, the Justice Department and the Federal Communications Commission.

States can keep companies from transferring assets within their borders, a possibility that can lead to concessions by companies, Rebecca Arbogast, a Washington-based analyst with Stifel Nicolaus & Co., said in an e-mail. States haven’t blocked past deals, she said.

Louisiana, West Virginia

“Sprint’s letter to the CPUC merely reiterates substantially the same unfounded accusations it has been peddling,” Margaret Boles, a Washington-based AT&T spokeswoman, said in an e-mail. “We’re confident that the FCC and DOJ, after a full review of the facts, will determine that this transaction will be good for consumers, for workers, and for the economy.”

Louisiana Governor Bobby Jindal, a Republican, in a letter yesterday told the FCC that he supports the merger because it will add mobile high-speed Internet capacity in the state.

Sprint on May 2 asked the West Virginia Public Service Commission to review the deal. AT&T in a May 12 filing asked the agency to reject that request, saying Sprint offers limited service in the state.

AT&T on March 20 proposed buying Deutsche Telekom AG (DTE)’s T- Mobile in a deal that would combine the second- and fourth- largest carriers to create a new market leader, ahead of No. 1 Verizon Wireless.

Sprint added 14 cents, or 2.6 percent to $5.47 at 4 p.m. in New York Stock Exchange composite trading and has gained 29 percent this year. AT&T lost 8 cents to $31.32. The shares are up 6.6 percent this year.

To contact the reporters on this story: Todd Shields in Washington at tshields3@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editors responsible for this story: Allan Holmes at aholmes25@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net

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