Judge Allows Sprint Challenge to AT&T Deal Over Access to Devices

Judge Ellen Huvelle dismissed most parts of Sprint Nextel's lawsuit challenging AT&T's proposed $39 billion acquisition of T-Mobile USA, but refused to throw out the entire case.

Her decision to let one part of Sprint's case to go forward could complicate AT&T's defense of the merger, which faces a separate legal challenge from government antitrust enforcers. C Spire Wireless has also sued to block the deal, and Judge Huvelle left part of that lawsuit in place as well. Judge Huvelle, of the U.S. District Court for the District of Columbia, said the companies could proceed with their claims that a postmerger AT&T, along with Verizon Wireless, would make it harder for less-powerful wireless companies to obtain the most-sought-after wireless devices, particularly smartphones. The judge dismissed all of Sprint's other claims, including its allegations that AT&T and Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, would be able to raise Sprint's costs for roaming and infrastructure services. The judge also said C Spire Wireless, formerly Cellular South, could proceed with antitrust claims related to roaming. Judge Huvelle said Sprint and C Spire can proceed with their allegations over access to mobile devices because the sought-after phones are necessary for their businesses. She compared the allegations to a trio of earlier cases, including one in which a federal court in New York allowed an independent movie theater to proceed with an antitrust lawsuit that alleged a rival merger would make it difficult to obtain sought-after movies. "Mobile wireless devices, and smartphones in particular, are Sprint's and Cellular South's first-run movies," Judge Huvelle wrote.

Public Knowledge President Gigi Sohn said, “We are very pleased that Judge Huvelle will let Sprint and C Spire continue to pursue their antitrust claims in court against AT&T. While not all of the issues the companies wanted to prosecute will be allowed, the ones that will go forward will demonstrate clearly the anticompetitive effects that AT&T's takeover of T-Mobile will have on the wireless industry. There is a very high bar for private firm to pursue their own antitrust cases. That Judge Huvelle allowed any of the cases to go forward is an indication of just how serious a matter this is.”