News Analysis: U.S. District Court Judge Ellen Huvelle turned down AT&T's motions to dismiss private antitrust lawsuits filed by Sprint and Cellular South by ruling that they have standing to sue.
U.S. District Court Judge Ellen Huvelle has handed AT&T a defeat in its quest to prevent the antitrust suits filed by Sprint
and Cellular South
seeking to prevent the proposed merger of AT&T and T-Mobile.
AT&T had filed motions to dismiss the suits by both companies on the grounds that they didn't have standing to sue because the companies are competitors of AT&T. "But where private plaintiffs have successfully pleaded antitrust injury, the fact that they are defendants' competitors is no bar," Judge Huvelle said in her conclusion to the 44-page decision.
As you would imagine, Sprint and Cellular South (which is now calling itself C Spire Wireless, but is referred to by its original name in the antitrust litigation) hailed the decision as a victory for their side. "By allowing Sprint and C Spire Wireless to move forward with these lawsuits, the Court has ensured we receive a fair hearing," Sprint's vice president for litigation Susan Haller said in a prepared 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."
Cellular South also welcomed the decision. "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," said the company's vice president for strategic and government relations, Eric Graham. "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."
Judge Huvelle denied AT&T's motions with regard to the proposed acquisitions' effects on the market for mobile wireless devices. In addition, the judge denied AT&T's motion to dismiss Cellular South's complaint in regards to roaming as it applies to the portion of its Corr Wireless subsidiary that uses GSM roaming. These rulings mean that AT&T can't prevent the antitrust suit by Sprint and Cellular South from going forward,
However, neither of the companies got everything they wanted. In one set of claims, Sprint and Cellular South said that the merger would raise prices for backhaul services
because T-Mobile would no longer be one of the customers needing such services. They also noted that AT&T has stated that it would be providing backhaul for former T-Mobile cell sites, instead of the third-parties that previously had provided about 20 percent of T-Mobile's backhaul.
The judge noted that this wouldn't really change anything from the current situation, because T-Mobile wasn't providing backhaul services. Backhaul services are the landlines that provide the link between a cell site and the public telephone network. They are a necessary part of the wireless network, and currently nearly all backhaul services are provided either by AT&T or Verizon.