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Update: Judge: Sprint, Cell South Can Proceed With Antitrust Suit Against AT&T–T-Mobile

D.C. District Court Judge Ellen Huvelle has ruled that Sprint Nextel and Cellular South can proceed with their antitrust lawsuit against the proposed AT&T–T-Mobile deal, although not along many of the tracks the two companies were laying out.

AT&T and T-Mobile had filed motions to dismiss the suits, saying the plaintiffs had not supported their allegation of antitrust injury and thus lacked standing to sue.

Huvelle assumed, but only for the purposes of determining standing, that the deal would violate antitrust laws. That was because the determination she had to make was whether, if that proved ultimately to be the case, the plaintiffs had demonstated their potential loss or damage from any illegal aspect of the deal.

"Sprint's and Cellular South's complaints provide factual support for the allegation that AT&T already possesses significant market power as a purchaser of mobile wireless devices, and that the acquisition of T-Mobile threatens them with harm," said the judge.

But she did not accept many of the alleged harm claims. For example, she said that Sprint's allegation that post-merger AT&T and Verizon would compose a Twin Bell duopoly "controlling 'access to the wireless bridge between upstream developers and the consumers they seek to connect with via wireless communications,'" might be plausible, but did not threaten Sprint. It also said that Sprint's claim it would be harmed by the loss of T-Mobile as a potential partner in ventures to create competitive handsets also failed.

She said that Sprint's claim that the combination of AT&T and T-Mobile spectrum was an antitrust threat, including by forcing spectrum development costs to other carriers, lacked factual support. She also dismissed Sprint's claim that the deal would result in increased roaming claims.

"[T]he Court has ensured we receive a fair hearing," said a Sprint spokesperson. "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."

The Justice Department has also filed an antitrust suit against the deal.

An AT&T official  pointed to the majority of claims the judge dismissed, including that Sprint would be marginalized by the elimination of one of four national mobile wireless competitors, essentially disallowing the companies from suing the deal on the same grounds the Justice Department is using.

"Sprint can spin this however they'd like, but anytime a judge dismisses nearly all your claims, it's hardly a good day in court," said AT&T Senior EVP external and legislative affairs Jim Cicconi.