Sprint Asks Judge to Reject AT&T Bid to End T-Mobile Suit

Sprint Nextel Corp. (S) urged a federal judge to reject AT&T Inc. (T)’s bid to throw out its lawsuit to stop AT&T’s purchase of T-Mobile USA Inc., arguing the deal would leave just two major U.S. wireless companies and hurt its business.

Sprint’s attorney, Steven Sunshine, said at a hearing today in Washington on AT&T’s motion to dismiss the case that the merger would increase AT&T’s market power to secure deals for exclusive handsets. Dallas-based AT&T argued in court papers that Sprint can’t challenge the $39 billion deal under antitrust law because it’s a competitor rather than a consumer.

“If the merger goes through it will tip the market towards duopoly,” Sunshine said. “It will make it difficult for Sprint to get key inputs like handsets, as well as raise costs for roaming and backhaul.”

Should AT&T persuade U.S. District Judge Ellen Segal Huvelle to dismiss the case, Sprint’s ability to help the U.S. block the deal would be curbed.

Since Overland Park, Kansas-based Sprint filed its lawsuit on Sept. 9, it has attacked the proposed merger in court filings and public comments. It also teamed with Cellular South Inc., based in Ridgeland, Mississippi, which filed a similar lawsuit on Sept. 19. AT&T is asking Huvelle to dismiss Cellular South’s lawsuit as well.

Today’s hearing is the first to address any of the underlying antitrust issues in the case since the Justice Department sued to block the transaction on Aug. 31.

The government’s case is U.S. v. AT&T Inc., 11-01560; Sprint’s case is Sprint Nextel Corp. v. AT&T Inc., 11-01600; and Cellular South’s case is Cellular South Inc. v. AT&T Inc., 11- 01690, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Sara Forden in Washington at sforden@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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