The U.S. Department of Justice has filed a lawsuit to block AT&T's US $39 billion[b] deal of mobile competitor T-Mobile USA, according to sources.

Critics have said the merger would reduce the number of nationwide mobile carriers from four to three and could lead to higher mobile service prices with low-cost competitor T-Mobile eliminated. AT&T could better use the $39 billion to build out and improve its existing network, critics have said.

AT&T has argued that the deal will allow the carrier to bring LTE (Long Term Evolution) mobile broadband service to 97 percent of the U.S., as opposed to 80 percent without the merger. T-Mobile executives have said they don't have the spectrum to offer LTE service without the merger. The merger will result in better mobile service, with fewer dropped calls and faster data speeds, AT&T has said.

(More to follow.)

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is [email protected]