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AT&T has 'steep climb' ahead to get FCC approval of T-Mobile purchase

According to an anonymous official at the Federal Communications Commission, AT&T faces a "steep climb" in convincing the chairman to approve its proposed purchase of T-Mobile USA.

The Wall Street Journal spoke with an FCC official, who declined to comment on the record, on Wednesday about the $39 billion deal from AT&T to acquire T-Mobile USA from parent company Deutsche Telekom. "There's no way the chairman's office rubber-stamps this transaction. It will be a steep climb to say the least," said the official.

However, an AT&T spokesperson responded optimistically to concerns that the deal could be held up by the Commission. "We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions," said spokesman Michael Balmoris. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."

According to the Journal's report, comments by FCC Chairman Julius Genachowski on Tuesday indicate the agency's commitment to encouraging a competitive marketplace. "While we're still working through details of a data-roaming framework, I believe the core proposition is beyond dispute: healthy competition produces greater innovation and investment, lower prices, and better service," Genachowski said.

However, Genachowski and other FCC commissioners have remained silent regarding the proposed acquisition, the report noted. In addition to an FCC review, the Justice Department will also evaluate the deal. According to a filing with the SEC, AT&T stands to lose $3 billion if the deal is broken up.

On Monday, U.S. Senator Amy Klobuchar called for the FCC and the Department of Justice to look into the proposed deal. "Although this deal may spark innovation in the wireless industry," Klobuchar wrote in a letter to the two agencies, "I remain concerned that increased concentration will, at the same time, lead to fewer choices, higher prices and reduced service for wireless consumers."

A FAQ posted to the T-Mobile website earlier this week noted that the acquisition could take as long as a year to receive approval, further forestalling the expected arrival of Apple's iPhone on the network.

Third-place U.S. carrier Sprint could stand the most to lose from the proposed deal. Earlier this week, comments from the network's executives at an industry conference suggested that the company's pricing and profitability would be affected if the acquisition were to go through in its current form.

43 Comments

suddenly newton 15 Years · 13819 comments

C'mon. A couple of mil in kickbacks, a few campaign contributions, and they're all set to marry the bride.

benroethig 21 Years · 2768 comments

Not so much. Expect divestures. AT&T will give up smaller markets for better coverage in the big ones.

johnlew 15 Years · 26 comments

Yet another chance for the FCC to try to control things outside of the written law.

whatisgoingon 17 Years · 283 comments

Quote:
Originally Posted by AppleInsider

...
On Monday, U.S. Senator Amy Klobuchar called for the FCC and the Department of Justice to look into the proposed deal. "Although this deal may spark innovation in the wireless industry," Klobuchar wrote in a letter to the two agencies
...

How exactly does this spark "innovation" in the industry, in the sense that most people understand the word "innovation" to mean? Charging higher prices doesn't count.

bigmike 17 Years · 266 comments

Quote:
Originally Posted by whatisgoingon

How exactly does this spark "innovation" in the industry, in the sense that most people understand the word "innovation" to mean? Charging higher prices doesn't count.

Exactly. They think that when the masses hear the word "innovation" they'll think, "oooh cool, we're part of something big and innovative" and will shell out extra dollars for something that shouldn't cost shit in the first place. But, for most people, they're right.

Yet another small step towards a non-private, no-options world.