New York attorney general Eric Schneiderman has announced that his office will carry out a thorough review of AT&T's proposed acquisition of T-Mobile USA.

"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," Schneiderman said in a statement. "Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future. We want to ensure all New Yorkers benefit from these important innovations that improve lives."

An announcement from Schneiderman's office said that the merger might have a particular impact on cities such as Rochester, Albany, Buffalo, and Syracuse, where there are already fewer wireless network options. But the announcement also said that the attorney general is concerned that the merger could effect consumers and businesses across the state.

Early last week, AT&T told the world it had agreed to acquire T-Mobile USA from Deutsche Telekom in a deal valued at roughly $39bn. AT&T runs what is likely the largest wireless network in the US, with about 95.5 million subscribers, and T-Mobile runs the fourth largest, with 23 million. Whereas the other two players – Verizon and Sprint – offer networks based on the CDMA standard, AT&T and T-Mobile use GSM, the same technology used in most major markets across the rest of the world.

In his announcement, Schneiderman said that his office would takes pains to examine the potential benefits of the deal. AT&T has argued that the acquisition will more quickly bring 4G wireless broadband to the country and that it's taking a American operator out of the hands of a foreign company.

The Federal Communications Commission and the Department of Justice will also examine the merger. Late last week, speaking with The Wall Street Journal, an unnamed FCC official indicated that the merger would have a tough time winning approval from the commission. "There's no way the [FCC] chairman's office rubber-stamps this transaction. It will be a steep climb to say the least," the official said. ®