WASHINGTON — ATT has one month to tell a Federal District Court judge and the Justice Department whether it will pursue its proposed $39 billion acquisition of T-Mobile USA in its current form, in a modified structure, or if it will drop the deal altogether.
Judge Ellen Segal Huvelle, of Federal District Court in Washington, granted a joint motion filed Monday by ATT and the Justice Department to delay the government’s antitrust lawsuit over the merger. Judge Huvelle set a Jan. 12 deadline for ATT to decide whether it intends to continue to pursue the deal.
The Justice Department’s antitrust division had sued to block the deal, which it said would result in too much consolidation in the market for cellphone and wireless broadband service and could hurt consumers.
Separately, Julius Genachowski, the chairman of the Federal Communications Commission, indicated that he would recommend that the commission vote to block the merger. Subsequently, ATT withdrew its application from the regulator, saying it intended to focus first on the antitrust case.
Judge Huvelle, who is overseeing the antitrust case, agreed to halt the pretrial proceedings and cancel a status conference scheduled for Thursday, setting a new date of Jan. 18 for the next hearing. The trial had been scheduled for mid-February, but that will now depend on the outcome of the hearing in January.
By Jan. 12, ATT and T-Mobile must submit a report “describing the status of their proposed transaction, including discussion of whether they intend to proceed” with the current transaction or another deal. The companies also must outline “their anticipated plans and timetable for seeking any necessary approval from the Federal Communications Commission.”
Judge Huvelle said last week that it appeared that “the landscape has changed” because of ATT’s withdrawal of its application with the F.C.C. Government lawyers argued at a hearing last week that if no application for approval of the merger was before the F.C.C., the antitrust lawsuit was moot.
The Justice Department does not have to formally approve the merger, although it can object to try to block it. The F.C.C., however, must give its approval for the deal to proceed because it involves the transfer of licenses for public airwaves. Justice Department lawyers said in court that they would consider withdrawing the lawsuit because without an F.C.C. application there was no merger for the government to oppose.
Addressing that point, Judge Huvelle told ATT and T-Mobile, “We don’t have any confidence that we are spending all this time and effort and the taxpayers’ money and that we’re not being spun.”
ATT said the company was committed to working with T-Mobile’s parent company, Deutsche Telekom, “to find a solution that is in the best interests of our respective customers, shareholders and employees.”
It added, “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”
Under the merger agreement, which was announced in March, if the deal is not completed by next September, ATT must pay T-Mobile $3 billion in cash plus turn over spectrum, the airwaves on which cellphone signals travel, worth at least $1 billion.
An F.C.C. staff report released last month predicted that the merger would lead to significant job losses. ATT has maintained the opposite, saying that it would return 5,000 call center jobs to the United States from abroad. It also vowed not to lay off any call center employees who were employed on the date of the merger.
But ATT has said that certain overlapping jobs would be reduced because of the merger. The company has said that it would consider selling some T-Mobile assets to satisfy regulators worried about industry consolidation.
Article source: http://feeds.nytimes.com/click.phdo?i=98d950de294e5eb3fbf9c6caa1c573ef
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