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AT&T-Mo deal on hold for the holidays

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Updated. The judge hearing the Department of Justice’s lawsuit against AT&T’s planned takeover of T-Mobile agreed to a stay until Jan. 18 to give AT&T (s T) time to figure out how to salvage the deal. Last week, the DoJ told U.S. District Court Judge Ellen Huvelle that because AT&T had withdrawn its application from the Federal Communications commission, it shouldn’t get an expedited trial.

The DoJ and FCC are playing hardball with Ma Bell, something the company clearly didn’t expect when it proposed the $39-billion deal back in March. For an awesome read on how the political climate has changed under AT&T’s feet, check out this story in the Washington Post. (s wpo) Now the judge is giving AT&T the mercy of one month to figure out what it can do to salvage the transaction.

So now the relevant date is no longer Thursday, when the original conference with the judge was scheduled to take place, but Jan. 18. Huvelle has scheduled a status conference  at 2 p.m. EST. Prior to that, AT&T and T-Mobile’s parent Deutsche Telekom have until noon on Jan. 12 to submit:

” …a status report describing the status of their proposed transaction, including discussion of whether they intend to proceed with the transaction at issue in this litigation, whether they intend to proceed with another transaction, the status of any related proceedings at the Federal Communications Commission, and their anticipated plans and timetable for seeking any necessary approval from the Federal Communications Commission.”

If AT&T and T-Mobile have a Plan B, now would be a good time to set it in motion.

Update: Will AT&T keep fighting for T-Mo? Here’s AT&T’s statement, which is pretty ambiguous:

“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees. We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”

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