Updated: Sprint and C Spire Wireless (formerly Cellular South) can go forward with their joint lawsuit to try to stop the AT&T proposal to buy T-Mobile, a merger that the U.S. Justice Department has also sued to stop in a separate proceeding. On Wednesday evening Judge Ellen Segal Huvelle decided that Sprint and C Spire demonstrated that they would be injured if the AT&T’s proposed takeover of T-Mobile were completed, and allowed the suit from the two corporations to proceed.
The judge dismissed some of the aspects of Sprint and C Spires case but left a few elements related to devices for the two companies to prove out in court. Notably Judge Huvelle agreed that the two operators could be threatened by AT&T/T-Mo’s “monopsony power” — in terms of its ability to buy handsets and strike exclusivity deals. As a Stifel Nicolaus report notes, “In doing so, Judge Huvelle recognized the merger’s national implications, which are a key part of the DOJ’s case, though most the focus has been on the market for wireless services.”
Susan Z. Haller, vice president – litigation, Sprint, said a statement:
Along with the Justice Department and a bi-partisan group of Attorneys General from seven states and Puerto Rico, Sprint has concluded that the transaction would give AT&T the ability to raise prices, thwart competition, stymie innovation, diminish service quality and stifle choice for millions of American consumers. 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.”
Eric Graham, VP of Strategic & Government Relations for C Spire Wireless added in a similar vein:
The Court’s ruling today will ensure that all parties harmed by AT&T’s proposed takeover of T-Mobile will have the benefit of a fair hearing. C Spire is pleased that it will have the opportunity to continue its fight for American consumers, and for the principles of competition and innovation that should drive the wireless industry.
Update: AT&T painted a less stunning victory. It’s statement from Wayne Watts, senior executive vice president and general counsel:
“We are pleased with the ruling that dismisses the vast majority of the claims of Sprint and CellSouth. We believe the limited, minor claims they have left are entirely without merit.”
But it still could by a Pyrrhic Victory as all this allows Sprint and C Spire to do is attempt to prove their claims in court. The court may still decide that the deal wouldn’t cause the two firms sufficient harm. However, amid all this legal wrangling by Sprint, C Spire, the DoJ and the seven state attorneys general who are all suing to stop the deal, where is the FCC’s decision? Sure it’s asking questions, but when will deal watchers get some answers?