AT&T/T-Mobile merger seems dead -- FCC's fatal order

By Richi Jennings (@richi ) - November 23, 2011.

T-Mobile LTE
The proposed acquisition by AT&T of T-Mobile USA ''is not in the public interest,'' says the Federal Communications Commission. It's another blow to the aspirations of AT&T (NYSE:T) and T-Mobile (ETR:DTE) to become the #1 U.S. wireless carrier. In IT Blogwatch, bloggers ponder investment, jobs, and competition.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Don't call me Obi-wan?..

    Grant Gross gets going:

The FCC, in a draft order...found the merger to be anticompetitive, echoing...the U.S. Department of Justice. The FCC is now required to send the merger request to a hearing...where AT&T and T-Mobile USA will have the opportunity to argue.

...

The merger would result in unprecedented concentration of market power...FCC officials said. ... FCC officials said they found no evidence that AT&T would roll out its [LTE] 4G...service faster if it was allowed to buy T-Mobile...[and] rejected AT&T promises saying the merger would lead to tens of thousands of new jobs.   
M0RE

    Rik Myslewski adds:

The FCC officials...[said] that it would...lead to "massive" layoffs – which, of course, is a common result for such mergers.

  Surprising no one, AT&T...used the "j-word" in its response. ... "It is yet another example of a government agency acting to prevent...the creation of many thousands of new jobs," AT&T's top mouthpiece Larry Solomon said.   
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Sean Ludwig notes that it's not just the FCC and the DoJ:

[T]he attorneys general of seven states also signed off on the [blocking] measure back in mid-September. AT&T rival Sprint has also filed its own lawsuit.

...

It might be tough for AT&T to prove the deal will work in the public’s favor. ... 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.   
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How did the FCC decide? Lance Ulanoff knows:

The FCC pored over 2,000 pages of documentation and held more than 100 meetings with all interested parties...including Cablevision, Dish Networks, EarthLink and Sprint. Officials said the claimed benefits of the merger are not supported by the facts.

...

The next step is a hearing before an administrative law judge...[who] would deliver a decision on the merger...[which] would then be considered by the FCC.   
M0RE

Meanwhile, Matthew DeCarlo is bearish for Ma T:

The fact that the agency is seeking a trial doesn't bode well. ... [The last time] a merger of this size was brought before an administrative law judge [was] when EchoStar wanted to buy DirecTV for $26 billion. That deal was eventually scrapped.

...

Naturally, AT&T isn't too thrilled about today's news.   
M0RE

   And Finally...
Don't call me Obi-wan?
 
 
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Richi Jennings, your humble blogwatcher

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. He's the creator and main author of Computerworld's IT Blogwatch -- for which he has won American Society of Business Publication Editors and Jesse H. Neal awards on behalf of Computerworld. He also writes The Long View for IDG Enterprise. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com. You can also read Richi's full profile and disclosure of his industry affiliations.

Copyright © 2011 IDG Communications, Inc.

  
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