DOJ clears way for AT&T-Centennial deal

The U.S Department of Justice gave a tentative thumbs-up Tuesday to AT&T’s proposed acquisition of Centennial Communications provided AT&T divests some of its network assets in Louisiana and Mississippi.

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The DOJ’s Antitrust Division said that as originally proposed, the merger would “substantially lessen competition” and “likely would result in higher prices, lower quality and reduced network investments” in certain areas of Mississippi and Louisiana. The DOJ claims that AT&T and Centennial are each other’s closest competitors in parts of the two states and that any “proposed settlement requires divestitures in those areas to eliminate competitive concerns.”

For its part, AT&T says it has already agreed to sell assets to Verizon Wireless in “five of the Centennial service areas covered under the DOJ ruling.” The company still has to divest itself of assets in three remaining services areas before the DOJ will officially sign off on the deal, however.

“We are pleased with the Department of Justice’s decision and see it as an important step toward closing our acquisition of Centennial,” says AT&T general counsel Wayne Watts. “The combination of AT&T and Centennial will bring together two complementary wireless businesses and will produce meaningful benefits for customers of both companies.”

AT&T first announced its plans to buy Centennial, a regional provider of wireless communications services, last November for $944 million. The purchase was AT&T’s second major purchase of a wireless company that month, as a week earlier the carrier purchased Wayport, a network and applications management company that provides back-office management for Wi-Fi hot spots.

In purchasing Centennial, AT&T says it will improve its wireless coverage in several rural areas in both the continental United States and in Puerto Rico. Centennial has a total of 1.1 million wireless customers and has a particularly strong presence in Midwestern states such as Michigan, Ohio and Indiana. The wireless company also has a significant footprint in Louisiana, Texas and Mississippi.