By JOELLE TESSLER
WASHINGTON (AP) — The Justice Department took the unusual step Wednesday to try to block AT&T's $39 billion purchase of T-Mobile USA, arguing that the proposed merger would lead to higher wireless prices, less innovation and fewer choices for consumers.
Now AT&T, the nation's No. 2 wireless carrier, and No. 4 T-Mobile are plotting a legal response to challenge federal regulators.
In its civil antitrust lawsuit, the Justice Department said the merger would stifle competition in the wireless industry. The deal, which is still under review at the Federal Communications Commission, would catapult AT&T past Verizon Wireless to become the nation's largest wireless carrier, leaving Sprint Nextel as a distant third-place player and certain to struggle.
AT&T quickly signaled that it won't abandon the transaction, leading to expectations of a fierce court battle.
AT&T has several incentives to take up a legal fight with regulators. In court, the burden is on the Justice Department — not AT&T — to show that the combination would harm competition. If the deal doesn't go through, the company will be forced to pay T-Mobile a $3 billion break-up fee and give it some wireless spectrum rights.
AT&T said it will ask for an expedited court hearing "so the enormous benefits of this merger can be fully reviewed."
In a statement, T-Mobile's owner, the German company Deutsche Telekom, said it is disappointed by the Justice Department's action and "will join AT&T in defending the contemplated merger."
The companies could wage a strong defense in court.
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