FCC demands full hearing over AT&T, T-Mobile deal

23 Nov 2011

US mobile giant AT&T’s ongoing attempt to secure a USD39 billion deal for T-Mobile USA has been dealt a significant blow by the Federal Communications Commission (FCC). The watchdog’s chairman Julius Genachowski has sent a draft order to his fellow commissioners, confirming that, after reviewing 200,000 pages of documents and convening around 100 meetings with stakeholders and as many as 30 with the applicants themselves, FCC staff believe that the projected deal will significantly diminish competition and lead to widespread job losses. One senior FCC official told Reuters: ‘The record clearly shows that – in no uncertain terms – this merger would result in a massive loss of US jobs and investment’. It is now believed that Genachowski is preparing a formal request for an administrative hearing, which would likely commence after the Department of Justice’s (DoJ’s) independent case against the merger, which is scheduled to commence on 13 February 2012.

Larry Solomon, AT&T’s senior vice president of corporate communications, commented: ‘The FCC’s action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both. At this time, we are reviewing all options’. TeleGeography notes that the last time the FCC intervened to block a deal was in 2002, when it successfully prevented a merger between EchoStar and Direc­TV.

In related news, Bloomberg reports that rival cellco MetroPCS Communications – which recently entered into negotiations to buy surplus cellular assets from AT&T, in an attempt to curb anti-competition fears – has now decided that it is not actually interested in acquiring sufficient customers and spectrum to ease through the ill-fated transaction.