The U.S. Justice Department is blocking AT&T's $39 billion deal to buy T-Mobile USA, saying the acquisition of the fourth largest wireless carrier in the country by the second largest (AT&T) would reduce competition and raise prices.
The deal has faced tough opposition from consumer groups and third largest carrier Sprint since it was announced in March.
AT&T could challenge the Justice Department's action in court. A failure of the deal puts T-Mobile in a difficult position. It's struggling to compete with the larger carriers, and owner Deutsche Telekom AG has said it's not willing to invest more in the venture.
AT&T has promised T-Mobile $3 billion in cash if the deal doesn't go through, plus spectrum rights and agreements that could be worth billions more.
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