Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community


The Federal Communications Commission put up a roadblock to the proposed AT&T and T-Mobile merger by calling for an administrative hearing, and even AT&T seems a bit daunted by the opposition lined up against the $39 billion deal.
According to Larry Solomon, senior vice president of Corporate Communications, AT&T(s t):
“The FCC’s action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both. At this time, we are reviewing all options.”
In previous setbacks, such as when the Department of Justice came out against the deal in August, AT&T’s repsonse was a bit more strident. In a statement attributed to Wayne Watts, AT&T Senior Executive Vice President and General Counsel, the company said:
“We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.
We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court.”
Even the switch from the company’s legal eagle Wayne Watts as a spokesman, to the head of corporate communications seems fraught with meaning. But while Ma Bell may have a bit less to be thankful for, there are still plenty of moving parts surround this deal, that have to come together to ram it through or even for AT&T to retreat.
The federal case (now cases): The FCC’s decision to hold an administrative hearing carries less weight than the DoJ’s lawsuit and the upcoming hearing before U.S. District Court Judge Huvelle scheduled for February. AT&T has made its case in its filings so far, but the DoJ trial will be the model for taking this deal down through the courts. The DoJ’s lawsuit may follow the arguments already tested in a summary judgement hearing earlier this month in a case brought by Sprint(s s) and C-Spire, formerly Cellular South. That judge had doubts about what the consolidation might do to device choice and freedom for consumers.
Meanwhile the FCC’s process could take as long as a year to complete, but in an FCC press conference today, agency officials said that they would work with the Department of Justice. It’s highly unlikely that the agency will have to see its administrative hearing through to the bitter end as the DoJ lawsuit and Judge Huvelle’s ruling is seen by many deal watchers analysts as the key factor in the case.
The breakup fee: But even if AT&T were to decide that the DoJ, the attorneys general of seven states, Sprint and Cellular South and a variety of consumer groups are too much to keep fighting against, it still has to handle a large $3 billion breakup fee plus give up some spectrum worth up to $3 billion to T-Mobile. For analyst firm Stifel Nicolaus, the threat of continued and extended review, “could put added pressure on T-Mobile to seek to exit the merger, though it would have to negotiate with AT&T over the $3 billion break-up fee and related roaming and spectrum terms if it wanted to get out before allowed under the current deal (lasting at least through March, with two extensions allowed through next September).”
The big takeaway: So after today, the questions become whether in spite of almost unified opposition AT&T stays true to T-Mobile through the court trial scheduled for February 2012, or if T-Mobile’s parent company decides to cut its losses, renegotiate a smaller breakup fee and attempt to find another suitor. The last time the FCC sent a merger to administrative review in 2002, the two parties gave up. So far, AT&T may have cut back on its toughest language, but it hasn’t thrown in the towel.
AT&T-Mo what happens next? http://t.co/jsrQ6304
AT&T should be required to retain all of TMo’s employees for 10 years and keep TMo customer rates the same for 10 years. That’s the only way this takeover should be allowed to go through.
AT&T-Mo what happens next? http://t.co/0PXSvvUu
AT&T-Mo what happens next? – The Federal Communications Commission put up a roadblock to the AT&T and T-Mobile merge… http://t.co/p0GUP9im
AT&T-Mo what happens next? – The Federal Communications Commission put up a roadblock to the AT&T and T-Mobile merge… http://t.co/Af9QQV25
Things not looking good -> AT&T-Mo what happens next? — Tech News and Analysis http://t.co/YvrJDrZ2
RT @gigaom: AT&T-Mo what happens next? http://t.co/0LCLtKrE
AT&T &T-Mo what happens next? http://t.co/bypQdj0L
AT&T-Mo what happens next? http://t.co/aaJPzq99
AT&T-Mo what happens next?: René Obermann, Chairman and CEO, Deutsche Telekom and Randall… http://t.co/Am1qSqF2
AT&T-Mo what happens next?: René Obermann, Chairman and CEO, Deutsche Telekom and Randall Stephenson, Chairman a… http://t.co/6WzCJjhM
AT&T-Mo: What happens next? http://t.co/9q2miquz Good roundup of what AT&T and T-Mobile are facing in light of FCC action by @gigastacey
AT&T-Mo what happens next? http://t.co/sGp7qwKC
AT&T-Mo what happens next? The Federal Communications Commission put up a roadblock to the AT &T and T-M #voip #telcom http://t.co/ZtzxRuGQ
Çek maÄŸdurları GigaOm: AT&T-Mo what happens next? http://t.co/NfzazR8t(By @gigaom – Blog Fe… http://t.co/CNGHJ6eW http://t.co/ZiNTKakM
AT&T, we DON’T want your anticompetitive merger with tMobile. Move on, please RT @gigaom: AT&T-Mo what happens next? http://t.co/ElQgWXkf
AT&T-Mo what happens next? http://t.co/BC7QKulv
RT @kfitchard: AT&T-Mo what happens next? by @gigastacey http://t.co/XkIcIUix
AT&T-Mo what happens next? by @gigastacey http://t.co/XkIcIUix
RT @gigaom: AT&T-Mo what happens next? http://t.co/0LCLtKrE
gigaom: AT&T-Mo what happens next? http://t.co/vdOzaNvk
RT @gigaom: AT&T-Mo what happens next? http://t.co/0LCLtKrE
AT&T-Mo what happens next? http://t.co/MpPtugIX
AT&T-Mo what happens next? http://t.co/FxFe3FCc
AT&T-Mo what happens next? http://t.co/0vWobxFF
AT&T-Mo what happens next? http://t.co/0LCLtKrE
AT&T-Mo what happens next? http://t.co/PBIcYidB
AT&T-Mo what happens next? http://t.co/Y73uhjg6