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Sprint Opposes AT&T Bid for T-Mobile

AT&T's (NYSE:T) bid to acquire T-Mobile USA is facing opposition from rival telecom vendor Sprint (NYSE:S).

AT&T announced its bid for T-Mobile USA last week in a deal valued at $39 billion. The transaction is not expected to close for another 12 months, pending regulatory approvals.

Sprint is hoping that the regulators will block the deal.

"Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs at Sprint, in a statement. "This transaction will harm consumers and harm competition at a time when this country can least afford it."

AT&T did not respond to a request for comment from InternetNews.com by press time. During the acquisition press conference, AT&T executives stressed that the combination of the two carriers would create synergies that could lower the cost per bit.

Sprint noted that after the acquisition closes, AT&T and Verizon will be the biggest wireless providers in the U.S. creating a duopoly over the wireless market.

"The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated companies with unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete," Sprint warned in its statement.

McCann noted that Sprint intends to compete in a dynamic marketplace, which is why they oppose the deal.

"So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly," McCann stated.

Not everyone shares Sprint's view of the AT&T acquisition of T-Mobile USA.

Analyst Scott Cleland of Precursor LLC noted that he expects the U.S. Department of Justice (DOJ) and the FCC to approve the deal. In his view, the DOJ will appreciate how the acquisition will help to solve some of the FCC's highest priority problems.

"The President and the FCC have both established as a major public policy initiative to get mobile broadband deployed across the United States," Randall Stephenson, CEO and President of AT&T said during his company's conference last week announcing the acquisition.

Stephenson also noted that the combined AT&T and T-Mobile USA would be able to deliver broadband to over 95 percent of the U.S.

"Given the FCC's National Broadband Plan goals of accelerating broadband adoption, it is hard to imagine the FCC blocking a legal AT&T-T-Mobile transaction that would result in much faster broadband adoption with combined resources and synergies than would occur with AT&T and T-Mobile remaining separate," Cleland noted in a blog post. "Simply, blocking this transaction would not achieve accelerated broadband adoption like approving this transaction would."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.