The Proposed Merger of ATT and T-Mobile

In "T-Mobile Antitrust Challenge Leaves AT&T With Little Recourse on Takeover," Bloomberg says

AT&T Inc. (T) wouldn’t have much luck trying to salvage its proposed $39 billion takeover of T-Mobile USA Inc. through negotiation with the U.S. Justice Department, leaving a court fight as its only recourse, lawyers said.

The combination of the country’s second- and fourth-largest wireless carriers would violate antitrust law and “substantially lessen competition,” the U.S. said in a lawsuit filed yesterday in federal court in Washington. The Justice Department asked U.S. District Judge Ellen Segal Huvelle to block the deal.

It would be strange for a merger of such large firms in a concentrated market to be permitted. What is most surprising is that ATT has agreed in its contract with T-Mobile, owned presently by Deutsche Telekom, to pay about $10 billion if the merger doesn't go through:

Rejection by regulators would leave AT&T liable to pay Deutsche Telekom $3 billion in cash, to give T-Mobile USA wireless spectrum, and to reduce charges for calls into AT&T’s network, a package valued at as much as $7 billion

FTC vs. Justice Department

"This Takeover Battle Pits Bureaucrat vs. Bureaucrat," in the WSJ says

Many antitrust lawyers believe that several deals that were approved by the Justice Department during the Bush administration—including Whirlpool Corp.'s purchase of Maytag Corp. and the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.—would have been challenged by the FTC. Whirlpool and SiriusXM declined to comment, as did the two agencies....

Some methods used to resolve agency disputes belie the stakes involved. In addition to the most recent coin toss—which several people familiar with the matter said the Justice Department won—the agencies have employed the "possession arrow" system borrowed from college basketball, in which they take turns.

How else might the agencies decide who should analyze a given merger proposal?