AT&T responds to Justice Department's lawsuit

AT&T is striking back against the US Department of Justice. Back on August 31, the government agency filed a lawsuit against the wireless phone carrier, claiming that its proposed $39 billion merger with rival T-Mobile "would remove a significant competitive force from the market." Now Bloomberg reports that AT&T has filed its formal response to the Justice Department lawsuit, saying that the agency has yet to prove that there would be any reduction in wireless competition if the merger is approved.

In the filing, AT&T stated there are a number of competing wireless carriers, including Verizon, Sprint, MetroPCS, U.S. Cellular, and others. It said, "The Department does not and cannot explain how, in the face of all these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation." AT&T also claims that its T-Mobile merger would eventually result in lower prices for its customers along with less dropped calls and an expansion of AT&T's own wireless network.

In fact, AT&T's official response took something of a cheap shot at T-Mobile, saying that the company is "the only major carrier to have actually lost subscribers in a robustly growing market." The Justice Department is still standing behind its lawsuit. It sent out a statement that said, "This transaction as currently proposed is anti-competitive and harmful to consumers." T-Mobile has yet to comment. Earlier this week, Sprint launched its own lawsuit against the AT&T/T-Mobile merger claiming that if approved it would "harm retail consumers and corporate customers by causing higher prices and less innovation."

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