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Sprint Nextel, America’s third-largest wireless carrier, has requested that the Federal Communications Commission (FCC) block AT&T's (News - Alert) proposed $39 billion takeover of T-Mobile USA, warning that the merger will destroy the competitive nature of the nation’s wireless market.

In its filing, Sprint (News - Alert) argued that the proposed acquisition would harm the broadband economy, competition and consumers, reversing two decades of successful U.S. government wireless competition policy and resulting in higher prices for consumers.

The carrier has warned that the merger would position AT&T and Verizon (News - Alert) as the gatekeepers of the digital ecosystem, stifling innovation and choice in new devices and applications, and the capital markets that fund them. Sprint suspects that the merger would lead the two big carriers to share nearly 80 percent of America’s wireless industry revenue.

Sprint Nextel (News - Alert) served more than 51 million customers at the end of 1Q 2011 and also offers wireless 4G service.

Sprint has stressed that the transaction would do nothing to relieve AT&T’s purported spectrum congestion. “AT&T is already the largest holder of licensed spectrum and unused spectrum and has simply failed to upgrade or invest sufficiently in its network. Moreover, AT&T does not need T-Mobile to expand its LTE (News - Alert) network to reach 97 percent of all Americans, because its current spectrum holdings and network already reach approximately 97 percent of the population,” said the Sprint in its filing.

The carrier went on to argue that AT&T is simply seeking a government bailout for problems of its own making and expects the cost of the bailout to be shouldered by American consumers.

“Instead of paying Deutsche Telekom $39 billion, AT&T could invest a fraction of that amount to expand its LTE deployment to nearly all Americans. But rather than respond to the market demands of a competitive industry, AT&T has chosen to eliminate competition and transform a competitive market into a duopoly.”

“This proposed takeover puts our mobile broadband future at a crossroads," said Vonya B. McCann, senior vice president of government affairs for Sprint. “We can choose the open, competitive road best traveled, and protect American consumers, innovation and our economy, or we can choose the dead end that merely protects only AT&T and leads the rest of us back down the dirt road to Ma Bell.”