AT&T to Seek Trial in Justice Department’s Lawsuit to Block T-Mobile Deal
There was no talk of settlement yesterday in federal court in Washington as Mark Hansen, an attorney for AT&T, told U.S. District Judge Ellen Segal Huvelle that the company wants to get to trial as quickly as possible. Huvelle, who had earlier told the parties to come prepared to discuss settlement prospects, set a trial date for Feb. 13.
“We’re seeking a prompt trial because we’re very interested in closing this transaction,” Hansen, of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC in Washington, said during the hour-long hearing. “We need to have the cloud of uncertainty removed. We’re already a month beyond where we want to be.”
The Justice Department sued Dallas-based AT&T and Bonn- based Deutsche Telekom AG (DTE)’s T-Mobile unit on Aug. 31, saying a combination of the two companies, which would make AT&T the biggest U.S. wireless carrier, would “substantially” reduce competition. Last week, seven states joined the government’s case seeking to stop the $39 billion deal.
Huvelle pressed lawyers for both sides to limit the number of witnesses and the amount of evidence they’ll present, noting that each proposed interviewing 30 potential witnesses before trial.
‘Longer and Longer’
“This case is getting longer and longer every time I ask,” Huvelle said, scheduling six weeks for the trial.
Joseph Wayland, deputy assistant attorney general of the Justice Department’s antitrust division, said the government plans to have AT&T and T-Mobile officials testify as “adverse” witnesses.
“We’ll call them as part of our case-in-chief immediately to begin the trial,” Wayland said.
Separate suits to block the deal have been filed by Sprint Nextel Corp. (S), the third-biggest U.S. wireless operator, and Ridgeland, Mississippi-based Cellular South Inc., the ninth- largest by customers.
Sprint, which claims the merged company would weaken its ability to compete with AT&T and Verizon Communications Inc., asked Huvelle to be included in coordinated proceedings with the Justice Department, as well as in motions about handling confidential evidence and scheduling.
Sprint’s lawyer, Steven Sunshine of Skadden, Arps, Slate, Meagher & Flom LLP in Washington, told Huvelle that the company’s case and the government’s are closely allied. He said if the U.S. loses, most of the issues Sprint raised in its suit will be resolved.
“If we lose that day, then we think we’ll be essentially done,” Sunshine said.
Hansen called the effort by Overland Park, Kansas-based Sprint to enter the case a tactical maneuver to slow the litigation, which he said is already damaging both AT&T and T- Mobile. Sprint’s complaint contains “exotic allegations” that the government didn’t endorse, he said, adding that AT&T will ask Huvelle to dismiss Sprint’s case.
Huvelle said that while she’s still considering Sprint’s request for coordination with the government, she probably won’t join the cases for trial. She set Oct. 24 for arguments on whether to throw out Sprint’s lawsuit, and scheduled the next hearing for AT&T and the government the same day.
AT&T is still “hopeful” it can address the Justice Department’s antitrust concerns and reach a settlement, Michael Balmoris, an AT&T spokesman, said in an e-mail after the hearing.
AT&T Chief Executive Officer Randall Stephenson in March announced the proposed purchase of Bellevue, Washington-based T- Mobile. If the transaction falls apart, AT&T may be liable to pay Deutsche Telekom $3 billion in cash, to give T-Mobile USA wireless spectrum, and to reduce charges for calls into AT&T’s network.
AT&T has taken a two-track approach to the case. It’s challenging the government’s evidence that the deal would lead to higher prices, less product variety and poorer quality in services, while exploring compromises for asset sales that might satisfy the government’s concerns. The company has reached out to MetroPCS Communications Inc. and Leap Wireless International Inc. to gauge their interest in buying assets, according to two people with direct knowledge of the situation.
A merged AT&T and T-Mobile would have about 132 million connections to mobile wireless devices and more than $72 billion in mobile wireless telecom service revenue, the U.S. said in its complaint. The T-Mobile transaction is scheduled to close by March 20, a deadline that can be extended, according to company filings.
The case is U.S. v. AT&T Inc., 11-cv-01560, U.S. District Court, District of Columbia (Washington).
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