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Posted at 10:53 AM ET, 08/31/2011

Justice Department files to block AT&T, T-Mobile merger

The U.S. Department of Justice has filed papers in federal court in Washington to block AT&T’s $39 billion acquisition of T-Mobile, Deputy Attorney General James M. Cole in a news conference Wednesday.

The U.S. is asking the court to declare the deal in violation of U.S. antitrust law.

“We feel the combination of AT&T and T-Mobile would fall on tens of million of consumers all over the United States,” said Cole.

The DOJ said that it is seeking to block the merger on the grounds that it would diminish competition in the wireless space and raise prices for consumers.

Cole said that competition in the industry is crucial for consumers and that AT&T — the nation’s second-largest carrier -- had identified T-Mobile — the fourth-largest — is a key competitor and innovator in the market.

“This lawsuit seeks to ensure that eveyone can continue to enjoy the benefit of that competition,” he said.

Shortly after the two companies announced their intent to merge in April, the Federal Communications Commission was inundated with comments calling on the agency to block the merger.

AT&T and T-Mobile have said a merger between the two companies would help expand high-speed broadband coverage to 97 percent of the country. Before the DOJ announcement Wednesday morning, AT&T had pledged to return 5,000 outsourced call center jobs to the U.S. if the merger was approved, an announcement hailed by the Communications Workers of America.

AT&T shares fell four percent to $28.21 during the DOJ’s 11 a.m. press announcement, while Sprint stock surged nine percent.

Related stories:

FCC asks AT&T for more information on merger

FCC restarts the clock on AT&T, T-Mobile deal

FCC temporarily halts review of AT&T merger with T-Mobile

By  |  10:53 AM ET, 08/31/2011

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