Bloomberg News

AT&T Cites Cellular South Overture in Bid to Dismiss Lawsuit

September 30, 2011

(Updates with excerpt from filing in third paragraph.)

Sept. 30 (Bloomberg) -- AT&T Inc. asked a federal judge to throw out a lawsuit Cellular South Inc. brought in a bid to block the company’s proposed $39 billion purchase of wireless carrier T-Mobile USA Inc.

AT&T Inc., in a filing today in federal court in Washington, said the competitive concerns raised by Cellular South in the suit weren’t legitimate. AT&T offered as evidence a a March 21 e-mail from Hu Meena, Cellular South’s president and chief executive officer, proposing an agreement between the two companies on issues such as spectrum and roaming access.

“Cellular South suggested that it would not oppose the merger if AT&T would agree not to engage in facilities-based competition in Mississippi,” AT&T said in its filing. “This inappropriate proposal confirms that what Cellular South fears is competition, not lack of competition.”

In its Sept. 19 lawsuit, Cellular South, the ninth-largest wireless carrier by customers, claimed the merger “threatens to substantially lessen competition” and cause it significant losses and damages.

A spokesman for Cellular South, Jim Richmond, said the company would have a statement on the allegations in the suit later today. The company announced on Sept. 26 it’s named was changed to C Spire Wireless.

The Justice Department sued Dallas-based AT&T and Bonn- based Deutsche Telekom AG’s T-Mobile unit on Aug. 31, saying a combination of the two companies, which would make AT&T the biggest U.S. wireless carrier, would “substantially” reduce competition. Seven states and Puerto Rico have joined the government’s case seeking to stop the $39 billion deal.

The case is Cellular South Inc. v. AT&T Inc., 11-cv-01690, U.S. District Court, District of Columbia (Washington). The government’s case is U.S. v. AT&T Inc., 11-cv-01560, U.S. District Court, District of Columbia (Washington).

--Editors: Fred Strasser, Peter Blumberg

To contact the reporter on this story: Tom Schoenberg in federal court in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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