To no one's surprise, Justice Department looks deeper into AT&T T-Mobile deal

Antitrust regulators seek more information regarding $39 billion purchase by AT&T

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The U.S. Justice Department wants more information regarding AT&T's proposed $39 billion purchase of rival wireless carrier T-Mobile USA.

Antitrust regulators have decided to extend their review of the deal, which, if approved, would create the largest wireless carrier in the U.S. The proposed merger has been vociferously opposed by Dan Hesse, chief executive of Sprint Nextel, the current No. 3 wireless player.

(Also see: AT&T purchase of T-Mobile USA leaves two losers)

In addition to requesting more information from AT&T and T-Mobile USA, which (for now) is owned by Deutsche Telekom AG, the Justice Department also has issued "civil investigative demands" to Verizon and Sprint. CIDs are intended to give competitors an opportunity to explain how proposed acquisitions and mergers would affect them.

Of course, Sprint's Hesse doesn't have to be prodded to offer his opinion in this case. Just two days after AT&T announced plans on March 20 to buy T-Mobile USA, Hesse knocked AT&T's move at the CTIA wireless show, saying, "I do have concerns that it would stifle innovation and too much power would be in the hands of two."

From his perspective, Hesse's concerns are understandable. AT&T and T-Mobile USA would have a combined 125 million subscribers -- or about 39 percent of U.S. wireless subscribers (with Verizon in second place at 93 million) -- to Sprint's 50 million subscribers.

Companies in a distant third place in any market generally are on borrowed time, which is why shares of Sprint Nextel (NYSE: S) plunged more than 17 percent the day after the deal was announced.

Since then shares of climbed back to pre-merger levels, in part because Sprint last week released quarterly results showing smaller-than-expected losses and healthy subscriber growth. But is the stock's rebound also because enough investors are confident that antitrust regulators will kill the merger?

Whatever eventually happens, this process promises to drag on. The Justice Department's second round of requests for information enables it to extend its review indefinitely, as it did recently in probing Google's $700 million purchase of ITA Software for more than eight months.

The AT&T/T-Mobile merger is much larger and much more significant to U.S. consumers. This one's going to take awhile.

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