Thanksgiving was an interesting day for those who follow telecommunications hoo-hah. While most Americans were enjoying turkey, stuffing and football, AT&T requested to withdraw their merger application with T-Mobile from consideration at the Federal Communications Commission. AT&T and Deutsche Telecom (T-Mobile’s parent company) instead announced plans to concentrate on Department of Justice antitrust proceedings that will go to trial in February 2012.
The withdrawal notice came in response to the FCC’s plan to schedule an administrative hearing on the merger – a process which could takes months to complete – pushing back the approval timeline even further.
So is this some kind of stunt? Or maybe AT&T is just now coming to grips with what we’ve been saying all along — namely, that this merger would be bad for jobs, innovation and creative expression.
The proposed $39 billion merger of AT&T and T-Mobile would see a single company control nearly half the wireless market in the US. The merger will still need FCC approval for completion, so insider speculation is that AT&T will attempt to settle with the DOJ and come back to the FCC with a passel of voluntarily-accepted conditions. That’s a risky play, but they are definitely running out of options.
We can see why AT&T might be getting desperate here; between the DOJ trial and the potential FCC hearings, the mobile giant will owe Deutsche Telecom around $4 billion if the deal fails to get approved by September 2012.
FMC commends FCC Chairman Julius Genachowski for scheduling the administrative hearing. This procedural hurdle is an important step towards a full rejection of the merger on its merits (or lack thereof). As FMC’s Deputy Director Casey Rae-Hunter said in a statement issued on Friday,
“We applaud Chairman Julius Genachowski’s decision to move to a hearing designation, which we see as a clear recognition of the many reasons the proposed merger would negatively impact the marketplace. It is incredibly important for America’s creative entrepreneurs that access and innovation are maintained in this crucial space.”
“Greater concentration in the wireless sector would leave just a few providers free to act as gatekeepers on an important platform for creativity and commerce. Today’s announcement is good news for musicians and creative entrepreneurs whose ability to reach audiences increasingly depends on affordable and robust wireless connectivity.”