AT&T calls off $39B plan to acquire T-Mobile

John O'Brien Dec. 20, 2011, 12:21pm


DALLAS (Legal Newsline) - AT&T has given up on its effort to acquire T-Mobile in a merger that was criticized by a group of state attorneys general but supported by 11 others.

AT&T said it could not overcome opposition from the federal government and scrapped its plan to form the nation's biggest cellphone service provider. The proposed $39 billion takeover, critics argued, would have harmed competition in the industry and could have resulted in higher rates for customers.

AT&T was attempting to buy the company from Deutsche Telekom.

"This merger would have violated laws written to maintain the benefits of real competition, including reasonable prices and quality services," Washington Attorney General Rob McKenna said.

"Now that the merger has been abandoned, Washington state consumers will continue to choose from several mobile communications providers, including T-Mobile, which has a major presence in our backyard."

McKenna is one of seven state attorneys general who supported the Department of Justice's effort to block the merger in September, joining an antitrust lawsuit two weeks after the DOJ filed it. The other AGs, in a mix of Republicans and Democrats, were Illinois' Lisa Madigan, California's Kamala Harris, Massachusetts' Martha Coakley, New York's Eric Schneiderman, Ohio's Mike DeWine and Pennsylvania's Linda Kelly.

Kansas Attorney General Derek Schmidt urged the Federal Communications Commission to block the merger in November, but not all AGs opposed the deal.

Eleven attorneys general had no problem with the purchase, and Alabama Attorney General Luther Strange said it would improve the lives of Alabamans living in rural areas by increasing accessibility to broadband services.

"With nearly one-third of our residents living in rural areas, this represents a significant potential benefit beyond just higher call quality and faster data downloads," Strange said. "Rural residents, especially younger ones, will gain access to innovative teaching and medical programs - an important new economic advantage that can help improve access to education, healthcare and jobs."

Strange said that he decided to support the merger after hearing from officials for AT&T that if the merger received federal approval, the company would make a significant investment to expand deployment of the most advanced wireless technology, frequently called 4G service, to over 95 percent of Alabama residents.

The 10 other AGs from across the county who joined Strange in a letter to the feds were Arkansas' Dustin McDaniel, Georgia's Sam Olens, Kentucky's Jack Conway, Michigan's Bill Schuette, Mississippi's Jim Hood, North Dakota's Wayne Stenehjem, South Dakota's Marty Jackley, Utah's Mark Shurtleff, West Virginia's Darrell McGraw and Wyoming's Greg Phillips.

The AGs urged the approval due to the merger's "substantial and far-reaching benefits" which include fewer dropped calls, faster downloads, better quality service, increased investment, job creation and economic development.

From Legal Newsline: Reach John O'Brien by e-mail at

More News