Federal Communications Commission chairman Julius Genachowski has requested a trial-like hearing for the proposed AT&T and T-Mobile merger after deciding that the deal would hurt consumers.
The FCC’s hearing would be yet another roadblock to the beleaguered telecom merger. On top of the Department of Justice seeking to block the deal, the attorneys general of seven states took legal steps to stop the merger back in mid-September. AT&T rival Sprint has also filed its own lawsuit.
Genachowski and his staff concluded that the merger would end up causing the telecommunications industry to be over-concentrated, and thus want a hearing that will make AT&T prove the deal is “in the public interest.” The hearing would be presided over by an administrative law judge who will weigh the evidence and render a judgement. After that, the FCC will make a final decision.
It might be tough for AT&T to prove the deal will work in the public’s favor. At present, there are four major carriers in the U.S., with Verizon at No. 1, AT&T at No. 2, Sprint at No. 3 and T-Mobile at No. 4. If AT&T and T-Mobile customers are combined, AT&T becomes No. 1, Verizon No. 2 and Sprint becomes far and away the smallest major carrier.
“The FCC’s action today is disappointing,” AT&T said in a statement. “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 U.S. economy desperately needs both. At this time, we are reviewing all options.”
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