U.S. Moves to Block Merger Between AT&T and T-Mobile

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WASHINGTON — The Justice Department on Wednesday sued to block the proposed $39 billion merger between the cellphone giants AT&T and T-Mobile USA, arguing that keeping them separate would preserve competition in the wireless industry and even help save jobs of American workers.

In a lawsuit filed in Federal District Court here, the Justice Department argued that the proposed deal, which would join the nation’s second- and fourth-largest wireless phone carriers, would result in higher prices and give consumers fewer innovative products. The companies disputed those assertions, and labor unions that support the deal said that the merger would add jobs, not cost them.

“The view that this administration has is that through innovation and through competition, we create jobs,” said James M. Cole, the deputy attorney general, at a news conference announcing the lawsuit. Mergers usually reduce jobs through the elimination of redundancies, he said, “so we see this as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them.”

The lawsuit, which could take years to wind its way through the courts, sets up a prominent antitrust battle — a rarity since the election of President Obama, who campaigned with promises to revitalize the Justice Department’s policing of mergers and their effects on competition, which he said had declined significantly under the Bush administration.

http://www.nytimes.com/2011/09/01/technology/us-moves-to-block-merger-between-att-and-t-mobile.html?_r=1&nl=todaysheadlines&emc=tha2