Mobile

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

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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.