April 20, 2024

Business Briefing | Telecommunications: U.S. Seeks Withdrawal of AT&T Antitrust Case

The Justice Department said Friday that it wanted to withdraw or postpone its antitrust case against the proposed acquisition of T-Mobile USA by ATT now that the two companies no longer had a valid application to approve the deal. The companies took back their application with the Federal Communications Commission two weeks ago after the commission’s chairman came out against the $39 billion deal. The companies have said they will seek approval from a federal judge, who has scheduled a February trial on the Justice Department’s case, and will file another F.C.C. application later. A deputy assistant attorney general, Joseph Wayland, told Judge Ellen Segal Huvelle of Federal District Court that the government planned to file a motion next week to put off the case. Judge Huvelle gave the government until Tuesday to do so and scheduled a hearing for Thursday on the matter.

Article source: http://feeds.nytimes.com/click.phdo?i=c3fcf927480815241dc22e9e1c8c7f10

DealBook: Taking on a Veteran Antitrust Judge in the AT&T Fight

Judge Ellen Segal HuvelleCharles Dharapak/Associated PressJudge Ellen Segal Huvelle

8:21 p.m. | Updated

As ATT prepares to defend its $39 billion deal for T-Mobile USA against a lawsuit by the Obama administration, the two sides will face a judge who has refereed many big antitrust fights.

Judge Ellen Segal Huvelle, in her 12 years on the United States District Court for the District of Columbia, has overseen numerous antitrust cases brought by regulators, including one in which she ruled against the government. She has also presided over prominent matters like the trial of the disgraced former lobbyist Jack Abramoff and the Securities and Exchange Commission’s settlement talks with Citigroup over subprime mortgages.

The Justice Department’s lawsuit against ATT is one of her biggest cases to date. It is the Obama administration’s most significant effort to halt a landscape-altering transaction, one that would combine two of the nation’s biggest cellphone service providers. And the tenor of both the Justice Department’s complaint and ATT’s response suggests that a contentious brawl may be in the works, even as both sides leave open some possibility of a settlement.

In a case this complex, with reams of market and technological data to consider, a jurist with experience presiding over antitrust matters may prove a boon for both parties

Born in Boston in 1948, Judge Huvelle graduated from Wellesley in 1970 and Boston College Law School in 1975, and served as a clerk for the chief justice of the Massachusetts Supreme Judicial Court. (Unusually for a federal judge, she also earned a master’s degree in city planning from the Yale School of Architecture in 1972.) She then moved over to the law firm Williams Connolly, where from 1976 to 1990 she represented clients like the flamboyant boxing promoter Don King.

In 1990, she was appointed a District of Columbia Superior Court judge. Nine years later, the Clinton administration nominated her to the District of Columbia federal bench.

That seat has put Judge Huvelle in line to hear several major antitrust cases — at least 12 since 2004, according to Justia.com, a legal information site.

Among antitrust experts, she is perhaps best known for presiding in 2001 over the Justice Department’s suit to block the $825 million SunGard Data Systems bid for Comdisco’s data recovery business. The government argued that the deal would combine two of the nation’s three biggest providers of data recovery services, creating an unacceptable level of market concentration.

But lawyers for SunGard and Comdisco countered that customers had alternatives, including offsite data storage solutions, to which they had actually lost more customers than to competitors. Judge Huvelle ultimately ruled for SunGard, writing that the United States could not prove “the proposed transaction is reasonably likely to substantially lessen competition.”

It was the Justice Department’s first significant antitrust loss in years.

Judge Huvelle later heard a 2007 case brought by the Justice Department over ATT’s $2.8 billion purchase of Dobson Communications. To secure approval of the deal, the company agreed to sell off assets in seven markets.

She also presided over the Justice Department’s lawsuit seeking to block the UnitedHealth Group’s $2.4 billion takeover of Sierra Health Services in 2008.

In that case, the government argued that combining the two would give UnitedHealth 94 percent of the Medicare Advantage market in Las Vegas, a segment with $840 million in annual fees. UnitedHealth settled the case by agreeing to sell its Medicare Advantage business.

ATT, which said it was caught off guard by the government’s move, may follow SunGard’s example and argue that its competitors include more than the big four national cellphone service providers. Newer companies like LightSquared could emerge as upstart national rivals, while virtual network operators like Virgin Mobile could expand in the low-price end of the market.

“From ATT’s standpoint, SunGard showed that she is not just going to rubber-stamp what the government is going to do,” said David F. Smutny, a partner at Orrick, Herrington Sutcliffe.

Judge Huvelle also overruled government lawyers in the S.E.C.’s initial proposed settlement with Citigroup over the bank’s subprime disclosures, asking curtly, “I look at this and say, ‘Why would I find this fair and reasonable?’ ”

But many experts say that the Justice Department has a strong argument in this case. Should the T-Mobile deal go through, the nation would labor under a de facto mobile duopoly of ATT and Verizon Wireless, according to the government’s complaint.

“Justice has done a thorough job,” said Susan Crawford, a professor at the Benjamin N. Cardozo School of Law. “ATT’s surprise shows they took this as political matter and not a legal matter.”

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