DOJ Tells Judge That There Is No Active AT&T Deal With T-Mobile

The U.S. Department of Justice will file a motion to stay or dismiss its lawsuit to block AT&T's acquisition of T-Mobile USA because the agency believes there's no deal pending, a lawyer for the DOJ said Friday.

The DOJ will file the motion on Tuesday in response to AT&T's decision in November to withdraw its application at the U.S. Federal Communications Commission for the transfer of T-Mobile's spectrum licenses to AT&T, said Joseph Wayland, the DOJ's lead attorney in the case. "It's not a real transaction until they file with the FCC," Wayland said during a scheduling hearing in the antitrust case.

AT&T withdrew its license transfer application after the FCC announced in November that staff there had found the transaction to be contrary to the public interest. The FCC had planned to send the application to a hearing before an administrative law judge, but AT&T instead withdrew the application.

Wayland told Judge Ellen Segal Huvelle of the U.S. District Court for the District of Columbia that the DOJ would proceed with its case after AT&T refiles its application at the FCC. Huvelle has scheduled a hearing on the DOJ's motion to stay or dismiss the case for Thursday.

AT&T lawyer Mark Hansen, facing a skeptical Huvelle, said nothing has changed from the company's perspective. AT&T plans to move forward with the US$39 billion deal, and it will refile an application with the FCC at some point, he said.

Huvelle should move forward with the DOJ trial, scheduled to begin Feb. 13, he said. With a Huvelle ruling in hand, the company can then go back to the FCC with the antitrust issues resolved and work out the remaining concerns there, he said.

Hansen urged Huvelle to move forward quickly and to reject requests by AT&T competitors Sprint Nextel and Cellular South, now called C Spire Wireless, to join the DOJ case. AT&T has until Sept. 20 to complete the deal or pay T-Mobile a $4 billion breakup fee.

But Huvelle questioned why she should move forward quickly when AT&T has withdrawn its application at the FCC. "I find it a little unsettling to be told I have to decide by a certain date because of your agreement" with T-Mobile, she said.

AT&T seems to be acting "presumptuous" by expecting the court to move forward quickly and the FCC to abide by Huvelle's decision, she said. Huvelle questioned whether the FCC would have to abide by her ruling on the antitrust issues, noting that the agency must also consider whether the merger is in the public interest.

Huvelle also questioned if the FCC could finish its deliberations in a couple of months after her likely midsummer ruling. "We have no confidence that we're not being spun," she said.

AT&T made a "perfectly appropriate decision" to withdraw its application at the FCC and not fright two antitrust cases at once, Hansen said. Huvelle should not allow the DOJ to "pocket veto" the deal by dragging out the process, he added.

Without a speedy court case, the deal is dead, Hansen said. "It's either a trial on our timetable, or there's no trial at all," he added.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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