• All
• iOS
• Android
• Windows Phone
• Tech
• Blog

“You can’t create a monster, then whine when it stomps on a few buildings” (Lisa Simpson). U.S. regulators are going to great lengths to ensure that AT&T never has the chance to stomp on anything. AT&T’s $39 billion T-Mobile acquisition is in hot water today (November 22, 2011) after FCC Chairman Genachowski announced that he is, “preparing a formal request for the administrative hearing, and the request is expected to get the approval of FCC commissioners” (Amy Schatz, The Wall Street Journal).

See Also: AT&T LTE New Home Phone & Internet Service (News)

The reasoning behind it is that, “FCC lawyers found the merger would kill jobs, rather than create them, [and] that the sum of the two operators’ 4G wouldn’t be greater than the parts, and that a merged AT&T-Mo would likely stifle wireless competition in 99 of the 100 largest markets – basically every major city but Omaha, Neb.” (Kevin Fitchard,GIGaom). Which is the opposite of the claims presented by AT&T, “"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."

See Also: Google Patents A New Way To Swipe (News)

This is not the first time the FCC has gone this route. According to The Wall Street Journal, “The last time the FCC sent a major deal for an administrative hearing was in 2002 with the proposed merger of satellite TV providers EchoStar and DirecTV. The companies eventually pulled the deal instead of fighting for approval with skeptical regulators.” Dropping the deal is a difficult option too, though. If AT&T were to back out they would be required to pay Deutsche Telekom AG, T-Mobile’s parent company $3 billion. That’s not to say the legal battle wouldn’t be an uphill fight as well, AT&T are currently being sued by the Justice Department in an antitrust lawsuit. If AT&T were to win its case against the DOJ though, “the FCC hearing would happen after the antitrust trial, assuming AT&T won the trial. An FCC administrative law judge would hear evidence from both sides. The administrative judge would then make a recommendation on the deal, which would then go to the FCC's commissioners for approval” (Amy Schatz, The Wall Street Journal). Even if AT&T were to win that battle they would still have to deal with the lawsuit from Sprint and various other cities and states.

Sell Apps And Keep 100% Of Your Profits

“Sprint cheered today's decision, and so did Internet and telecommunications advocacy group Public Knowledge.”This is a significant setback for AT&T—most mergers that reach this stage end up failing," the group said. "This isn't the last step at the FCC, because the full Commission still needs to vote on the order, and then AT&T can either press its case before an Administrative Law Judge or simply withdraw its application. But it's an important step and a victory for the public interest" (Jon Brodkin, Ars Technica). At this rate it appears that AT&T is going to miss its September 20^th deadline with Deutsche Telekom AG. Will the date be extended, or will AT&T drop the merger and cough up the $3 billion?

Like This Article? Chat About It And More In Our GiveMeApps Community!