FCC official: AT&T’s T-Mobile deal will face “steep climb”

March 24, 2011 9:55 AM
Devindra Hardawar

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July 9-10, 2013
San Francisco, CA

AT&T’s $39 billion deal to purchase T-Mobile won’t be entirely smooth sailing for the carrier — not that we expected any less.

Speaking off the record on Wednesday, an FCC official said there’s “no way” the FCC will “rubber-stamp” the deal, adding that AT&T will likely face a “steep climb,” the Wall Street Journal reports.

Ever since the T-Mobile acquisition was announced last week, AT&T has been bending over backwards to prove how the deal is in the public interest — something that should make it more palatable to the FCC. AT&T says that the union of the two companies would ultimately deliver better 3G coverage for subscribers and allow for the creation of a LTE 4G network by combining their wireless spectrum.

But AT&T can’t escape the fact that the T-Mobile deal also represents the union of the No. 1 and No. 4 wireless carriers in the U.S., reducing the playing field from four major carriers to three. As VentureBeat’s Dean Takahashi argued, the deal will definitely test anti-trust law.

AT&T remains confident that the purchase will go through. The company has gone so far as to offer T-Mobile parent Deutsche Telekom a $3 billion breakup fee if the FCC rejects the deal.

If it does go through, it wouldn’t be the first time the FCC has approved a controversial deal. As the WSJ points out, the merger of satellite radio companies Sirius and XM was approved a year after the FCC said that the hurdle for the deal would be high.

thejcrawford

The Washington Post yesterday described the deal as a bid to build better networks for mobile web access. More interesting will be how new OpenFlow technology transforms the Internet, reducing infrastructure costs, improving security, and yes, increasing mobile access, too. More on this: http://crawfordpr.com/2011/03/…
xp84

Recent history has actually shown that there's no deal too ridiculous to be approved. Sirius-XM is the poster child for this. A consolidation that took the number of competitors in the market from 2 to 1.I challenge anyone who disagrees to point out the last time a merger of any kind was actually blocked on antitrust grounds. I was probably too young to notice, the last time it happened…but I bet it was pre-Reagan.Sure, the wireless phone market is bigger, but this is 4->3, not 2->1.We have 2 more mergers to go before we get to that point. Mark my words, it will happen. AT&T will spin off its land line business which doesn't make any money anyway, and then acquire Verizon, and probably spin off their land lines too. Expect this in about 6 years, during President Palin's 2nd term.