DOJ Requires ATandT Divestitures to Complete Centennial Deal

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.