U.S. Court Hearing Produces Trial Date for ATandT, T-Mobile Antitrust Case

By Wayne Rash  |  Posted 2011-09-22

U.S. Court Hearing Produces Trial Date for ATandT, T-Mobile Antitrust Case

Judge Ellen Huvelle of the U.S District Court for the District of Columbia set Feb. 13, 2012 as the starting date for the trial of the U.S. Department of Justice's antitrust lawsuit that seeks to permanently block AT&T's $39 billion buyout of competing wireless telecommunications company T-Mobile.

The date, selected by the judge during a Sept. 21 preliminary hearing on the antitrust lawsuit, splits the difference between AT&T's request for a mid-January trial and the government's request for a mid-March trial, setting the start date for February 13, 2012.

Judge Huvelle sought to streamline the case proceeding by declining to combine Sprint's antitrust suit with the government's suit. But she scheduled an Oct. 24 hearing to listen to arguments on whether to combine the cases as well as to hear AT&T's motion to dismiss Sprint's antitrust lawsuit. AT&T is questioning Sprint's right to sue in the merger case, despite the fact that such suits are explicitly permitted by the Clayton Act.

An additional antitrust suit filed earlier in the week by Cellular South was not discussed in Sept. 21's hearing, although attorneys for the company attended the hearing. A hearing date for the Cellular South antitrust suit has not been set. However, several participants in the hearings told eWEEK that combining that company's suit with the DoJ's case is unlikely because Cellular South is pursuing a different line of arguments.

During Sept. 21's hearing, Judge Huvelle said that Sprint's participation in the DoJ case would prolong the trial, which is currently set to last for six weeks. During discussions, Judge Huvelle said that she expected the actual trial to be over in four to six weeks.

While Judge Huvelle had told the parties in the antitrust suit to be ready to discuss the prospects for a settlement at Wednesday's hearing, the topic never came up. AT&T has said that it's eager to discuss a settlement and the DoJ has said that it's willing to listen to settlement proposals that would satisfy the government's concerns.

However, it would appear that AT&T isn't prepared to propose such a settlement itself. The reason, according to an observer close to the case who asked not to be identified, is that the DoJ can't think of any settlement besides blocking the merger that wouldn't violate antitrust laws in some way.

The other reason may be that Sprint has already said that there is no settlement that would satisfy it. AT&T charged Sept. 21 the reason that Sprint won't agree to a settlement is it wants to acquire T-Mobile itself. However, Sprint has not made any statements regarding the possible acquisition of T-Mobile. Meanwhile, AT&T has launched a series of ads in Washington, D.C. newspapers accusing Sprint of being disingenuous and being more interested in its own needs rather than the needs of consumers.

War of Words to Continue

Meanwhile, a reason for Deutsche Telekom's urgency in selling T-Mobile may have emerged. In documents provided to eWEEK by attorneys representing complainants in an antitrust lawsuit filed by European Union regulators against DT reveal that the German company is facing fines and damages of about $1.6 billion.

According to allegations in the documents provided to eWEEK, DT has repeatedly stonewalled court orders to reveal information and is facing fines, interest on the fines, awarded damages and interest on the damages that it has been ordered to pay, but so far has refused to pay. The report, prepared by the law firm Wilms & Schaub Rechtsanwaltsgeselllschaft mbH, also indicates that DT will be facing additional fines and damages for refusing a series of related court orders.

Now that a trial date has been set in the AT&T-T-Mobile case, the parties involved will begin preparing their cases and in AT&T's case, doing everything it can to influence public opinion.

Sprint, meanwhile, will be preparing for the next step. "We are pleased that Judge Huvelle decided to move both cases very quickly and in an expedited manner," said Sprint's vice president of government affairs, Vonya McCann. "Although the judge did not consolidate Sprint's case with the government's case at this time, we are pleased that the judge will hear from Sprint on the merits in oral arguments on Oct. 24."

Cellular South, which had representatives in the courtroom, but which did not participate in the hearing, also said that it's encouraged by the outcome. "Cellular South is pleased with today's scheduling hearing and looks forward to demonstrating that AT&T's proposed acquisition of T-Mobile is blatantly anticompetitive and will result in consumers facing higher prices, less innovation, fewer choices and reduced competition," said Eric Graham, vice president of Strategic and Government Relations.

The war of words will continue. Here in Washington, D.C., we're already seeing a deluge of television and newspaper ads by AT&T promoting the merger. No doubt radio ads are next, as is the usual practice by companies trying to get the ear of lawmakers, government executives-and of course judges.

In a media campaign last year promoting the purchase of aerial refueling tankers by the U.S. Air Force, the ads became omnipresent, appearing on every available form of media, from television to bus signs. AT&T will no doubt spend some of its millions of lobbying bucks in a similar campaign. 

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