Seven US states oppose AT&T's purchase of T-Mobile USA

GIANT US TELECOM AT&T faces opposition from seven US states as well as the US Department of Justice (DoJ) over its proposed purchase of T-Mobile USA.

Earlier this year AT&T announced that it wanted to pull off a $39bn deal to buy Deutsche Telekom's T-Mobile USA business, claiming it would help better serve the US public. The size of the deal, and more importantly the fact that in some parts of the US it would leave consumers with no choice in wireless telephony services has attracted opposition.

The DoJ, which has to rubber stamp the purchase, weighed in saying it believes the acquisition of T-Mobile USA by AT&T would lead to higher prices. Now the attorneys general of California, Illinois, Massachusetts, New York, Ohio, Pennslyvania and Washington have joined forces to stop the deal from going ahead.

New York Attorney General Eric Schneiderman said, "This proposed merger would stifle competition in markets that are crucial to New York's consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies."

AT&T has said it wants to reach some sort of settlement with the DoJ so it can go ahead and buy T-Mobile USA. AT&T spokesman Michael Balmoris told Reuters, "It is not unusual for state attorneys general to participate in DOJ merger review proceedings or court filings." AT&T also pointed out that 11 states have come out in support of the deal.

While AT&T might claim to have more states supporting it, most of the highly populated US states such as California, Illinois, Massachusetts, New York and Pennsylvania are against the deal. The large numbers of consumers in those states are likely to hold some sway with the DoJ.

AT&T stands to pay Deutsche Telekom $3bn if the deal falls through, and at this point with the DoJ and seven states on its back, someone at AT&T had better be finding its chequebook. µ