As posted previously, AT&T is seeking to buy its major competitor T-Mobile in a deal estimated to be worth $39 billion. The United States Department of Justice has officially opposed this merger by filing an antitrust lawsuit, and the Federal Communications Commission is unlikely to approve of the merger without the Department of Justice's blessing.

The Department of Justice had previously indicated that it would be willing to entertain proposals from AT&T to reform the current deal, but AT&T had initially rejected the idea of a settlement while vowing to press forward.

However, AT&T has now announced that it is prepared to make some concessions in order to reach a settlement, but it simultaneously plans to oppose the antitrust case. Ultimately, it may have few good options, as it could owe T-Mobile's parent company Deutsche Telekom a break-off payment of up to $6 billion if the merger doesn't go through as expected.

The company is currently developing the settlement proposal and is expected to present it soon. Part of the government's antitrust case against the nation's second largest cellular provider's acquisition of the fourth largest is a reduction in competition that could cause consumer prices to rise. To address this concern, AT&T is expected to pledge to keep T-mobile's affordable mobile subscription plans.

AT&T has asked for an expedited hearing to resolve the lawsuit, and one source interviewed by Reuters expected the case to be in court in as few as two months. At the same time, the company is attempting to schedule talks with the Department of Justice. AT&T is confident that it will prevail, either in court or through its proposed settlement.

Source: Reuters, "AT&T prepares two-track plan to save T-Mobile deal," Nadia Damouni and Diane Bartz, Sept. 2, 2011