Bloomberg News

AT&T Claims Sprint Working With U.S. in T-Mobile Lawsuits

October 17, 2011

(Updates with Sprint comment in eighth paragraph.)

Oct. 17 (Bloomberg) -- AT&T Inc. said Sprint Nextel Corp. and Cellular South Inc. are working with the U.S. Justice Department to gain a tactical advantage in lawsuits seeking to block the AT&T’s proposal to buy T-Mobile USA Inc.

In a filing today in Washington, AT&T asked U.S. District Judge Ellen Segal Huvelle to reject Sprint and Cellular South’s request for access to confidential information it turned over to the Justice Department for its lawsuit seeking to block the deal, arguing the judge denied a similar request last month by Sprint. AT&T said the U.S. is now backing the companies’ bid for “special privileges” in the case.

Sprint and Cellular South last week asked Huvelle to allow their outside lawyers and experts to use the confidential data to prepare for trial in their own lawsuits challenging the T- Mobile deal. To deprive them of that opportunity creates a “fundamental unfairness,” they said in a joint filing.

“The United States supports petitioners’ motion because it would like to augment its litigation efforts with the work of privately funded counsel,” Mark Hansen, of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC in Washington, a lawyer for AT&T, said in the filing.

Document Subpoenas

The companies argued that, as competitors with relevant information, they have been subpoenaed for documents by AT&T in the government’s antitrust suit. At the same time, Huvelle, overseeing all the AT&T cases, froze document exchanges in the private lawsuits while she weighs the company’s bid to dismiss them. On Oct. 12, the Justice Department urged Huvelle to allow Sprint and Cellular South access to AT&T’s information.

In today’s filing, AT&T said the subpoenas it issued to Sprint, Cellular South and 14 other wireless providers are routine and seek information on similar topics. Huvelle said in a court filing that she’ll address the issue at a hearing scheduled for Oct. 24.

“AT&T is seeking to continue to block our access to its documents while it simultaneously uses the subpoena process to obtain documents from us,” said Eric Graham, vice president for strategic and government relations at C Spire Wireless, in an e- mailed statement. Cellular South based in Ridgeland, Mississippi, changed its name to C Spire Wireless on Sept. 26, according to its website.

John Taylor, a spokesman for Sprint, said AT&T is seeking “volumes of documents” beyond the more than two million pages Sprint and Cellular South gave the government during the Justice Department probe.

‘Refusing to Reciprocate’

“They are refusing to reciprocate and provide any documents in exchange,” Taylor said in an e-mail.

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 would “substantially” reduce competition. Seven states and Puerto Rico joined the government’s effort to block the deal, which would make AT&T the biggest U.S. wireless carrier.

Sprint, based in Overland Park, Kansas, brought its antitrust lawsuit on Sept. 6, less than a week after the U.S. sued to block the deal. As the third-biggest wireless carrier, Sprint said the proposed merger would weaken its ability to compete with AT&T, the second biggest, and Verizon Communications Inc., the market leader. The combination of AT&T and T-Mobile would form the country’s largest mobile-phone company.

Cellular South sued on Sept. 19 claiming the merger threatened to “substantially” cut competition.

The case is U.S. v. AT&T Inc., 11-cv-01560, U.S. District Court, District of Columbia (Washington).

--Editors: Fred Strasser, Charles Carter

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

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


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