AT&T answered the Justice Department’s complaint against its proposed merger with T-Mobile on Friday, arguing in a court filing that the government was unable "to come to grips with" benefits of the transaction and failed to prove the deal is anticompetitive.
At the same time, AT&T said it remains interested in settling the case, which the Justice Department brought last month on the grounds that the $39 billion deal will harm competition. The merger would reduce the number of national wireless providers from four to three.
An AT&T spokesman said in a statement on Friday that company officials “have been and remain interested in a solution that addresses the DOJ’s issues” with the deal. “When these discussions occur they will be confidential, and as such we won’t be commenting publicly,” he said.
But AT&T is also fighting it out in court. The company’s Friday filing slammed the Justice Department, saying it had failed to show that the deal is anticompetitive and noting that the burden of proof is on the government as it tries to block the deal.
AT&T said that the merger will actually enhance competition through all the "efficiencies" inherent in the deal. These efficiencies, which include the two companies' compatible network technologies, will lead to “increased output, higher quality service, fewer dropped calls and lower prices,” according the filing.
“While acknowledging the importance of merger efficiencies in enhancing competition in its Merger Guidelines, the Department of Justice’s Complaint fails to come to grips with the significant efficiencies this transaction will generate,” according to the filing.
AT&T also said the Justice Department fails to acknowledge the competitive status of the wireless industry, ignoring “the significant competition from established providers such as Verizon Wireless and Sprint,” as well as pressure from smaller competitors. “The Department does not and cannot explain how, in the face of all of these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation,” the company stated in its filing.
AT&T is pushing for an expedited legal process. The judge has ordered the Justice Department and AT&T to appear in court on Sept. 21 for the first hearing on the deal. The parties are expected to discuss scheduling and the prospect of settlement.
The FCC is also reviewing the deal, and is not expected to act in AT&T’s favor while the Justice Department challenges the merger in court.
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