Justice Dept. Sues to Block AT&T's Bid to Buy T-Mobile
Says combining No. 2 and No. 4 carrier would raise prices
By Kate Seamons,  Newser Staff
Posted Aug 31, 2011 10:17 AM CDT
In this file photo taken April 21, 2010, an AT&T logo and sign are seen on a window at a company store in Brunswick, Maine.   (AP Photo/Pat Wellenbach, file)

(Newser) – AT&T tried to sugarcoat its $39 billion deal to buy T-Mobile USA by announcing this morning that it would, as a result of the merger, return 5,000 call-center jobs to US shores. But it still wasn't sweet enough for the Justice Department, which has filed suit to block the move, saying the acquisition of America's No. 4 wireless carrier by its No. 2 would reduce competition and raise prices.

The deal has faced tough opposition from lawmakers, consumer groups, and No. 3 carrier Sprint since it was announced in March. AT&T could challenge the Justice Department's action in court. The implosion of the deal is rough news for T-Mobile, notes the AP, which reports that the carrier is having a tough time keeping up with its competitors and won't see any additional investment from owner Deutsche Telekom AG. The one silver lining: AT&T promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.