Government sues to block AT&T, T-Mobile merger

By JOELLE TESSLER and PETE YOST | August 31, 2011 | 11:35 AM EDT

WASHINGTON (AP) — Justice Department officials say they've filed suit to block AT&T's $39 billion deal to buy T-Mobile USA.

The government contends that the acquisition of the No. 4 wireless carrier in the country by No. 2 AT&T would reduce competition and raise prices.

At a news conference Wednesday, Deputy Attorney General James Cole said the combination would result in tens of millions of consumers facing higher prices, fewer choices and lower quality products.

Cole says the lawsuit seeks to ensure that everyone can continue to receive the benefits of competition.