AT&T/T-Mobile Merger Faces FCC Obstacle


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As if AT&T didn't have enough trouble performing their sleight of hand for the Department of Justice, their attempt to acquire T-Mobile just got more difficult, this time in the form of the FCC. In a weighty statement issued yesterday, the FCC produced a damning analysis of the merger citing concerns over possible "anticompetitive effects" should AT&T's acquisition succeed. In defending the need of a competitive market, the FCC cited T-Mobile's role as a "pricing innovator" due to the several service offers to consumers that may not necessarily be available through other wireless providers, such as the Flex Pay plan and Month-to-Month Postpaid Plans.

The full text follows:

Fcc Att Short

The FCC continues:

The record overall does not support a finding that the proposed AT&T/T-Mobile merger would serve the public interest, convenience, and necessity and that the record presents a number of substantial and material questions of fact.

Should the AT&T-Mobile amalgamation come to fruition, in one swoop AT&T would eclipse Verizon to become the largest wireless provider as well as dwarf Sprint's number of subscribers by two-and-and-half times. Additionally, the merger would eliminate T-Mobile and leave Verizon and AT&T in control of approximately 75% of all market shares. And that, cellphone users and poli-sci students, would most likely undermine the purpose of the Communications Act.

But the FCC isn't quite done with AT&T yet:

The staff additionally identifies internal AT&T documents and consistent historical practices that contradict AT&T's claim that the merging with T-Mobile is essential for AT&T to build out its LTE network to 97 percent of Americans. The staff finds the Applicants' assertions that the transaction would create jobs i the United States to be inconsistent with AT&T's internal analyses and record statements concerning cost reductions from the merger.

Ouch. Hearing that your merger is not going to create jobs when the country (and pretty much the whole world) is already feeling severe economic pangs is really not the way to garner support for the proposed merger.

AT&T appeared indignant of the FCC in their statement released on Thanksgiving Day, so one must wonder if this latest development has changed their tune. Regardless, AT&T's space in which to maneuver this deal seems to become more restricted by the day. One question still remains: Is this T-Mobile deal really worth that much to AT&T to be #1?