AT&T, U.S. Must Consider Settlement Prospects in T-Mobile Deal, Judge Says
AT&T Inc. (T) and the Justice Department must come to court Sept. 21 ready to discuss “the prospects for settlement” of the government’s antitrust lawsuit seeking to block the company from buying T-Mobile USA Inc., a judge said.
U.S. District Judge Ellen S. Huvelle in Washington issued the order yesterday after a telephone conference with the parties in the case, according to the court docket. Huvelle told the company and the government to file a joint proposal by Sept. 16 for scheduling the litigation that would “facilitate the just, speedy and inexpensive” management of the case.
“I read this to mean that the judge wants them to state succinctly what the areas of disagreement are and determine whether she can facilitate a settlement,” said Melissa Maxman, the Washington-based co-chair of the antitrust practice group at Cozen O’Connor. “If not, then she will set a schedule for proceeding with litigation. It will make things clearer.”
The Justice Department sued Dallas-based AT&T on Aug. 31 to stop its $39 billion acquisition of Deutsche Telekom AG (DTE)’s T- Mobile unit. The government said the combination of the two companies, which would make AT&T the biggest U.S. wireless carrier, would reduce competition “substantially”.
The Justice Department claimed that combining AT&T with Bellevue, Washington-based T-Mobile would result in “higher prices, poorer quality services, fewer choices and fewer innovative products” for consumers.
Acquisition of T-Mobile by AT&T would displace Verizon Wireless, owned by Verizon Communications Inc. and Vodafone Group Plc, as the No. 1 U.S. wireless carrier. Sprint Nextel Corp. would remain the third-largest. AT&T and T-Mobile compete head-to-head in 97 of the nation’s top 100 mobile-phone marketing areas, according to the Justice Department’s complaint.
“Judges always want to settle cases,” said Bob Doyle, a partner at Doyle, Barlow & Mazard PLLC in Washington and a former official at the Federal Trade Commission. “This litigation would be huge. She wants to clear her docket.”
Still, he said, litigation is more likely than a settlement judging from the Justice Department’s argument that the deal is anticompetitive for the national market as well as local ones.
Greg Neppl, an antitrust partner with Foley and Lardner LLP in Washington said he doubts the lawsuit is a negotiating tactic.
“If T-Mobile is broken up, the department doesn’t get the result of preserving an independent competitor,” he said. “A settlement would be a very heavy lift.”
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