A US District Court judge has ruled that mobile operators C-Spire Wireless and Sprint Nextel can go forward with part of their lawsuits against AT&T’s proposed US$39bn acquisition of T-Mobile USA. C-Spire Wireless (formerly known as Cellular South)…
A US District Court judge has ruled that mobile operators C-Spire Wireless and Sprint Nextel can go forward with part of their lawsuits against AT&T’s proposed US$39bn acquisition of T-Mobile USA.
C-Spire Wireless (formerly known as Cellular South) and Sprint Nextel filed lawsuits against the deal in September. This followed a separate lawsuit made against the deal by the US Department of Justice.
AT&T and T-Mobile subsequently moved to dismiss the C-Spire and Sprint lawsuits.
In a ruling yesterday, Judge Ellen Segal Huvelle approved the motion to dismiss the lawsuits, except in two areas: C-Spire and Sprint’s claims of antitrust injury in the market for wireless devices and a separate claim by C-Spire concerning the role of its subsidiary, Core Wireless, as a purchaser of GSM roaming.
According to Judge Huvelle’s ruling, C-Spire and Sprint had alleged that a post-merger AT&T would foreclose their access to the most attractive handsets and raise their costs, which would in turn make their offers less attractive to customers and injure their businesses.
Judge Huvelle concluded that C-Spire and Sprint had made “plausible claims” that the acquisition could threaten them with loss and damage in the market for handsets, and that they had “adequately alleged a threatened antitrust injury”.
Yet she dismissed other parts of their claims. This included the allegation from both parties that AT&T’s acquisition of T-Mobile USA would lead to higher retail wireless rates, as well as Sprint’s claim of potential injury in the market for wireless spectrum.
Sprint Nextel’s VP for litigation, Susan Haller, welcomed the ruling.
“Both Sprint and C Spire have demonstrated to the Court that they would be injured if the AT&T’s proposed takeover of T-Mobile were completed,” Haller said.
She added: “We are pleased that the Court has given us the chance to continue fighting to preserve competition on behalf of consumers and the wireless industry.”
AT&T drew a different conclusion from the court’s ruling.
The company’s senior executive VP and general counsel, Wayne Watts, said: “We are pleased with the ruling that dismisses the vast majority of the claims of Sprint and CellSouth [C-Spire]. We believe the limited, minor claims they have left are entirely without merit.”
C-Spire Wireless is a regional mobile operator, providing services in Alabama, Florida, Mississippi and Tennessee.
Sprint Nextel is the third largest US mobile operator, with 50 million wireless customers.
Huvelle has reportedly set 13 February 2012 as the start date for the trial concerning the DoJ’s lawsuit against the AT&T/T-Mobile deal.
