Wednesday, August 31, 2011 at 10:56 am.

Back to the drawing board for AT&T and T-Mobile

Bloomberg’s Tom Schoenberg:

The U.S. government sued to block AT&T’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market.

My guess is that AT&T won’t be giving up this easily. The question is how much reworking of the deal is worth it to get it done.

Meanwhile, this is a victory for Sprint, which has been putting a lot of effort into getting the deal blocked. But Sprint still needs to figure out its own problems.

Update: A statement from AT&T:

We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

Also: Will Verizon be Sprint’s 4G LTE savior?