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Sprint urges U.S. to block merger of AT&T and T-Mobile

The $39-billion acquisition would hurt consumers and undo years of federal efforts to make the telecommunications industry more competitive, Sprint said in announcing its opposition to the deal.

March 29, 2011|By Jim Puzzanghera, Los Angeles Times

Reporting from Washington — Sprint Nextel Corp. urged federal regulators to block a proposed acquisition that would create the nation's largest wireless carrier and leave two competitors in control of 75% of all cellphone subscriptions.

AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc. would be an "anticompetitive acquisition," Sprint said in a statement Monday.

If the deal goes through, Sprint, the nation's fourth-largest wireless carrier, would find itself a distant third, behind Verizon Wireless and a much larger AT&T.

Sprint had been a rumored suitor for T-Mobile for some time. But with AT&T's proposal, Sprint could be ripe for takeover or be forced to acquire smaller wireless providers to try to remain competitive, analysts said.

AT&T's purchase must be approved by the Federal Communications Commission as well as federal antitrust regulators.

"This transaction will harm consumers and harm competition at a time when this country can least afford it," said Vonya McCann, Sprint's senior vice president of government affairs.

Regulators are expected to give the deal tough scrutiny. And key lawmakers have promised hearings. Some of them, along with consumer advocates, have raised concerns that the deal could raise prices for wireless subscribers and reduce competition.

Sprint said AT&T's purchase would reverse years of actions by the federal government and the courts to make the U.S. telecommunications market more competitive.

"This isn't just about a couple of corporations.... This goes to the availability and pricing of devices that have become essential to every American's life," said Larry Krevor, Sprint's vice president of government affairs.

"It's going to change the wireless industry from a competitive market into one in which two companies have too much market power," he said.

AT&T insisted that if it buys T-Mobile, the wireless market would remain competitive and the company would improve its quality of service and its customers' ability to get next-generation service, "spurring innovation and economic growth."

AT&T's chief lobbyist, Jim Cicconi, took a swipe at Sprint, saying, "We have always found that the most constructive course is to focus on our own strategies … rather than becoming distracted by challenging the business strategies of others."

jim.puzzanghera@latimes.com

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