FCC slams AT&T/T-Mobile deal – Mobile World Live

FCC slams AT&T/T-Mobile deal

30 NOV 2011

US regulator the Federal Communications Commission said that AT&T and T-Mobile USA had “failed to satisfy their burden of demonstrating that their [proposed merger] transaction is in the public interest,” stating that an alliance would “substantially lessen competition and its accompanying innovation, investment and consumer price and service benefits.”

The watchdog issued the statement after the companies withdrew the merger application they had made, in order to focus their efforts on achieving clearance from the US Department of Justice. Industry analysts recently said that they believe the chances of the deal coming to fruition are now “less than 50/50.”

The FCC said that based on its preferred model of market concentration, “99 of the largest local wireless markets – every top 100 market except Omaha, Nebraska, where T-Mobile does not operate – would exceed the level at which the Commission becomes concerned about anticompetitive effects.”

It noted that “the economic and engineering models on which the applicants rely to show consumer benefits are, in the staff’s assessment, unreliable and, at a minimum, raise substantial and material questions of fact.” It said that it had identified documents and practices which “contradict AT&T’s claim that merging with T-Mobile is essential for AT&T to build out its LTE network to 97 percent of Americans.”

The regulator also argued that AT&T and T-Mobile’s assertion that the transaction would create jobs was “inconsistent with AT&T’s internal analyses and record statements concerning cost reductions from the merger.”

The statement was released because the FCC said that allowing the companies to withdraw their filing without detailing its staff analysis was “unfair to the parties and participants…who have invested significant time and resources” to provide input. It also said that with AT&T and T-Mobile still planning to pursue an alliance, its findings remain “highly relevant.”

In line with this, while it has acknowledged the operators’ move to withdraw their application, it is keeping its public docket open, stating that it would permit stakeholders to reinstate their complaints “if they remain relevant, should AT&T and Deutsche Telekom file revised applications that begin a subsequent review process.”

Author

Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

Read more

Related

Tags