An AT&T/T-Mobile combination is good for consumers and would “free...

a filing in U.S. District Court in Washington, D.C. The companies formally responded to the complaint filed by the Justice Department against the AT&T/T-Mobile deal (CD Sept 1 p1). The case will be heard by Judge Ellen Huvelle, who scheduled a preliminary hearing for Sept. 21. “Plaintiff’s Complaint … fails to depict accurately the state of competition in mobile telecommunications today, the dynamic nature of the wireless industry, or the procompetitive and pro-consumer impact of this transaction,” the companies said. “Wireless competition is fierce: prices have declined steadily, output is expanding, technological innovation is occurring at an extraordinary pace, and new providers with innovative business models have successfully entered and expanded.” The combined company would face competition from Sprint Nextel, Verizon Wireless, MetroPCS, Leap/Cricket and numerous other carriers, the filing said. “The Department does not and cannot explain how, in the face of all of these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation.” DOJ also doesn’t explain how T-Mobile, “the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T,” the filing said. The companies argue that the transaction is critical so AT&T can get the spectrum it needs to meet “customers’ insatiable and growing demand for wireless data,” which “is placing unprecedented strains on AT&T’s network and is impairing its ability to continue to meet explosive mobile broadband demands.” “AT&T’s court filing does not change the facts,” Sprint Nextel said in response. “This proposed takeover would create a clear wireless duopoly that could raise prices, stifle innovation and cost American jobs."