Following the FCC’s threat to go to court over the proposed AT&T/T-Mobile USA merger and the subsequent withdrawal of the companies’ approval request, further details about the regulator’s opposition have come to light. . In an FCC staff report…
Following the FCC’s threat to go to court over the proposed AT&T/T-Mobile USA merger and the subsequent withdrawal of the companies’ approval request, further details about the regulator’s opposition have come to light. .
In an FCC staff report the regulator argues that the US$39bn deal would likely result in “significant harms to competition”, including higher prices for consumers, reduced incentives for innovation and less consumer choice.
AT&T’s senior executive vice president for external and legislative affairs, Jim Cicconi, commented that the report had no force or effect under law and that this “raises questions as to why the FCC would choose to release it”.
In the report, the FCC said that the commission’s staff had found AT&T and T-Mobile USA have failed to carry their burden of proof that the deal would “on balance” serve the public interest.
It said that the bulk of the benefits put forward by the companies are “inadequately supported by the data supplied, achievable through means other than the elimination of a competitor, or otherwise not cognizable under the Commission’s public interest standard”.
The FCC also noted that there are “significant allegations of other harms” that need further investigation.
In a statement, FCC chairman Julius Genachowski said that the FCC’s review of the merger had a clear focus of “fostering a competitive market that drives innovation, promotes investment, encourages job creation, and protects consumers”.
Talks to Leap Wireless over spectrum disposal
Meanwhile, media reported further details on AT&T’s plan to save the merger by offering wide ranging remedies to address regulatory concerns
AT&T is reportedly in talks to sell T-Mobile USA customer accounts and spectrum to Leap Wireless in order to help it get antitrust approval for its acquisition of T-Mobile USA.
Citing people involved in the negotiations, the New York Times reported that AT&T hoped the deal would placate the Department of Justice’s (DoJ) antitrust review to such an extent that it would either drop its opposition to the acquisition or at least improve AT&T’s position if there is a trial.
The DoJ has filed a lawsuit to block the deal.
The sources reportedly said that the deal would make Leap the fourth biggest wireless carrier in the US, but would also allow AT&T to retain enough of T-Mobile’s spectrum, which it claims it needs in order to provide the next-generation service expected by consumers.
AT&T declined to comment. Leap Wireless were not immediately available for comment.
Leap Wireless provides mobile services through its Cricket brand.
Deutsche Telekom is the parent company of T-Mobile USA. A Deutsche Telekom spokesman said that the company has plenty of good reasons in favour of the AT&T/T-Mobile transaction and the FCC’s view did nothing to change that.
“Our task – and that of our partners – remains to allay these doubts,” he said.
He said that AT&T and Deutsche Telekom would submit a new application to the FCC at “an appropriate time”.
