The Department of Justice says AT&T's original $944 million deal to acquire regional wireless carrier Centennial would result in higher prices, lower quality and reduced network investments.The Department of Justice on Oct. 13 ordered AT&T "to divest assets
in eight areas in Louisiana and Mississippi
in order to proceed with its $944 million acquisition of Centennial
Communications," according to a DOJ news release. Without the
divestitures, the DOJ said, the deal "would substantially lessen
competition" in "mobile wireless telecommunications services in those
areas."
More specifically, the DOJ said, without the divestitures, consumers would
likely experience "higher prices, lower quality and reduced network
investments." According to the release:
"The Department's Antitrust
Division, along with the Attorney General of Louisiana, filed a civil lawsuit [Oct. 13] in U.S. District Court for the District of Columbia to block the proposed acquisition of
Centennial by AT&T. At the same time, the Department and the Louisiana
Attorney General filed a proposed settlement that, if approved by the court, would
resolve the competitive concerns in the lawsuit."
The DOJ continued: "According to the complaint, AT&T and Centennial
are each other's closest competitor for a significant set of customers in eight
Cellular Marketing Areas."
"These divestitures are necessary to preserve the benefits of competition
for wireless customers in these areas of Louisiana and Mississippi,"
Christine A. Varney, assistant attorney general in charge of the Department's
Antitrust Division, said in the statement, which said:
"AT&T is the second largest
mobile wireless telecommunications services provider in the United States as
measured by subscribers, serving almost 80 million subscribers throughout all
50 states. In 2008, AT&T earned mobile wireless telecommunications services
revenues of approximately $44 billion. Centennial is the eighth largest mobile
wireless telecommunications services provider in the United States as measured by subscribers, and provides
mobile wireless telecommunications services to approximately 1.1 million
subscribers in six states, Puerto
Rico and the U.S. Virgin Islands."
The AT&T-Centennial merger is still subject to approval by the Federal
Communications Commission.
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