DOJ Judge Postpones AT&T Hearing

Federal District Judge Ellen S. Huvelle has postponed the status hearing on the Department of Justice’s antitrust suit against the pending merger until Dec. 9th. The hearing was originally scheduled for this Wednesday, but a court scheduling conflict has bought the cellular behemoth more time to broker a deal that might appease the court and avoid going to trial.

The companies have reportedly been working behind the scenes on a proposal that would involve the sale of up to 40 percent of T-Mobile’s assets to another mobile carrier. AT&T hopes the asset sale would offset the loss of T-Mobile in the marketplace and alleviate concerns that the merger is anti-competitive.

The case has seen a lot of action since last week Federal Communications Chairman Julius Genachowski referred the matter to a hearing before an administrative law judge, tantamount to announcing the agency’s opposition to the deal.

AT&T and T-Mobile followed up by withdrawing their applications from the FCC, vowing to focus first on winning DOJ approval. AT&T also said it would take a pre-tax accounting charge of $4 billion in potential breakup fees that it could owe T-Mobile’s parent company, Deutsche Telekom, if the merger is blocked.

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But opposition to the deal is steep. Huvelle ruled in late October that Sprint and C Spire (formerly Cellular South) may proceed with certain portions of their own lawsuits against the merger.

The DOJ first filed suit to block the merger in August, claiming that a combined AT&T and T-Mobile would reduce innovation and competition in the mobile marketplace, and lead to higher prices for consumers.

If AT&T can’t reach a settlement with the DOJ, the trial is set for Feb. 13th, and would take six weeks.