Tags: FCC | AT&T | Merger | t-mobile

FCC Lets AT&T Withdraw T-Mobile Merger, Issues Report on Deal

Wednesday, 30 Nov 2011 07:16 AM

The Federal Communications Commission let AT&T Inc. withdraw an application to buy smaller rival T-Mobile USA Inc. and released an analysis of the $39 billion merger over AT&T’s objections.

The 109-page report compiled by FCC staff shows that AT&T didn’t demonstrate the merger’s public benefits would exceed its costs, an agency official said yesterday during a telephone briefing under ground rules forbidding identification by name. AT&T called the document’s release “improper.”

The deal combining the second- and fourth-largest U.S. wireless carriers was challenged in August by the Justice Department, which sued to block the merger as anti-competitive. A court hearing is set for February. The FCC moved last week to send the deal for a hearing that could take much of next year, an outcome avoided with the application withdrawn.

“Our review of this merger has had a clear focus: fostering a competitive market that drives innovation, promotes investment, encourages job creation, and protects consumers,” FCC Chairman Julius Genachowski said in an e-mailed statement.

The report concludes that the deal would cause significant jobs losses, and that AT&T would probably build high-speed wireless Internet connections without the merger, an FCC official said during yesterday’s call. The findings undermine AT&T’s claims about the deal’s benefits, the official said.

‘Serious Concern’

T-Mobile offers low prices and innovation, and its potential loss as a competitive force “is a cause for serious concern,” according to the FCC’s report.

“The applicants have failed to meet their burden of demonstrating that the competitive harms that would result from the proposed transaction are outweighed by the claimed benefits,” the report said.

The release of the report was “troubling,” Jim Cicconi, AT&T’s senior executive vice president-external and legislative affairs, said in an e-mailed statement. “We have had no opportunity to address or rebut its claims, which makes its release all the more improper.”

Sprint Nextel Corp., the third-largest wireless carrier and an opponent of the deal, said in a statement it applauded the FCC’s action.

“The investigation’s findings are clear: approval of AT&T’s bid for T-Mobile would lead to higher prices for consumers, eliminate jobs, harm competition, and damp innovation across the wireless industry,” Vonya McCann, Sprint senior vice president for government affairs, said in the statement.

Revised Deal

AT&T and T-Mobile parent Deutsche Telekom AG said last week they had withdrawn their FCC merger applications. They acted after Genachowski asked fellow commissioners to send the deal to the hearing before an agency judge.

The companies plan to focus on objections from antitrust authorities and to return to the FCC at some point, AT&T said in a statement last week.

The application withdrawal leaves open the possibility AT&T could again approach the commission with a revised deal, the FCC officials said.

Analysts have said AT&T may give up half of T-Mobile’s customers to ease regulators’ concerns and gain control of assets including wireless spectrum.


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The Federal Communications Commission let AT T Inc. withdraw an application to buy smaller rival T-Mobile USA Inc. and released an analysis of the $39 billion merger over AT T s objections.The 109-page report compiled by FCC staff shows that AT T didn t demonstrate the...
FCC,AT&T,Merger,t-mobile
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2011-16-30
Wednesday, 30 Nov 2011 07:16 AM
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