FCC fires strike two at AT&T-T-Mobile deal


The Justice Department has already sued to block the $39B acquisition of T-Mobile by AT&T, and now the FCC has gotten in line behind it, requesting an administrative hearing that would follow the DOJ action, putting a second hurdle in front of the proposed deal.

The FCC left no doubt that its move was antagonistic to the deal. A senior FCC official stated, “The record clearly shows that — in no uncertain terms — this merger would result in a massive loss of US jobs and investment.”

According to the Washington Post, the DOJ case is to be heard in February. The FCC would extend the review time once DOJ is finished with its part.

AT&T expressed its disappointment. However, AT&T’s claim that combining the two companies would increase investment and add jobs was received with skepticism.

Rep. Ed Markey (D-MA), who has long been a key legislator when it comes to communications issues, stated, “By taking action today, Chairman Genachowski is making clear he has serious concerns about the so-called benefits to the public interest of the proposed AT&T – T-Mobile merger. I have concerns that if this merger happens, it would result in the greatest concentration of wireless services in history, undermining choice and competition. This deal would strike a devastating blow to wireless services, driving up prices for consumers, discouraging investment in new technologies and stifling innovation that will help America win in the global marketplace.”

Most observers seem to believe the prospects for getting the deal done are now very much on the slim side. And there is a failure penalty being faced by AT&T – in the event that the deal is not consummated, according to WaPo, it will have to turn over spectrum and $3B to T-Mobile.

UPDATE: AT&T has withdrawn its FCC application, according to numerous reports, in order to concentrate on the DOJ proceeding.