AT&T has responded to the U.S. Justice Department’s lawsuit aiming to block the buyout of T-Mobile by saying without the merger customers will face network capacity issues and even higher prices.
AT&T said in its response, according to Phone Scoop,
Without this merger, AT&T will continue to experience capacity constraints, millions of customers will be deprived of faster and higher quality service, and innovation and infrastructure will be stunted. If this transaction does not close due to Plaintiff’s lawsuit, wireless consumers will, as the FCC Chairman predicts, increasingly face higher prices and lower quality.
The Justice Department filed a lawsuit in August as a move to block AT&T’s planned purchase of T-Mobile arguing that merging the carriers would limite cell service competition, and would negatively impact the wireless service market.
AT&T to DOJ: No, really, this is a good deal!
“The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said Deputy Attorney General James M. Cole.
The DOJ argued that T-Mobile is a major player in the U.S. cell service market, and that rural areas would be worse off without T-Mobile. AT&T, however, disagreed.
“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,” AT&T said in its response. “Nor can it explain how T-Mobile, the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T.”
AT&T announced its plan to buy T-Mobile USA from Deutsche Telekom in March for about US$39 billion. At the time, AT&T said the deal would “provide an optimal combination of network assets to add capacity sooner than any alternative, as well as provide an opportunity to improve network quality in the near term for both companies’ customers.”