The US Department of Justice has moved to block AT&T's proposed USD 39 billion takeover of T-Mobile USA from Deutsche Telekom. The DoJ said the merger of two of the four national mobile carriers in the US would "substantially lessen competition" for mobile services, "resulting in higher prices, poorer quality services, fewer choices and fewer innovative products". The DoJ filed a civil antitrust lawsuit to block the merger, against which AT&T can still appeal. The DoJ said T-Mobile provided an important source of competition, due to its aggressive pricing and a number of innovations, such as the first HSPA network and new devices like the first Android phone and Sidekick handsets as well as a national Wi-Fi network. In addition, AT&T was unable to show that synergies from the merger would outweigh the negative competition effects. The DoJ said that AT&T could "obtain substantially the same network enhancements that it claims will come from the transaction if it simply invested in its own network without eliminating a close competitor". AT&T announced the proposed takeover in March and expected to close the deal in the first half of 2012. The company said it was surprised by the DoJ's opposition, and it will ask for an expedited hearing to defend the merger's case in court. Deutsche Telekom said it will join AT&T in defending the deal and welcomed talks with the DoJ on possible remedies to getting the takeover approved. While the companies have lobbied intensively and gained support for the deal from a number of key politicians and unions, competitors such as Sprint as well as public interest groups and key lawmakers have voiced opposition to the takeover. The FCC is also conducting its own separate review of the proposed takeover. FCC chairman Julius Genachowski said in a statement that the regulator's review to date also raised "serious concerns about the impact of the proposed transaction on competition".
