FCC: AT&T's T-Mobile buyout isn't in the public's best interest

By on November 22, 2011, 6:30 PM

The FCC has taken preliminary measures to thwart AT&T's desired acquisition of T-Mobile today, according to a Wall Street Journal report. Agency chairman Julius Genachowski issued a draft order this morning that seeks an administrative hearing on the $39 billion proposal. The motion is pending approval by other FCC commissioners and would require AT&T to present its case before an administrative law judge.

The fact that the agency is seeking a trial doesn't bode well for AT&T. It's been nearly a decade since a merger of this size was brought before an administrative law judge, when EchoStar wanted to buy DirecTV for $26 billion. That deal was eventually scrapped.

The hearing would force AT&T to prove that a T-Mobile buyout is in the public interest, while the FCC would present its findings. The agency has examined more than 2,000 pages of documentation and held over 100 meetings with parties related to the merger. After that investigation, it remains unconvinced that the move will create new jobs or accelerate the rollout of 4G connectivity -- the primary benefits AT&T has stressed.

The FCC isn't alone in questioning the takeover. In August, the Department of Justice filed a federal antitrust suit to block the AT&T and T-Mobile merger, saying it would hinder competition, resulting in higher prices and worse service. Sprint has claimed the buyout would create "a 1980s-style duopoly," while Kansas Attorney General Derek Schmidt believes the deal would reduce consumer satisfaction with no real benefits.

Naturally, AT&T isn't too thrilled about today's news. "The FCC's action today is disappointing. 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 US economy desperately needs both. At this time, we are reviewing all options," said AT&T exec Larry Solomon. If the trial is approved, it will begin after the DoJ's litigation.




User Comments: 11

Got something to say? Post a comment
trparky said:

It would be funny if only if it was funny, you know what I mean?

It takes a special kind of person to sit there and dish out lie after lie like that and not even think twice about it. That, and it takes a special kind of company to do that too.

Increase investment? Don't make me laugh. AT&T is a company that has consistently shown a complete lack of investment unless it's absolutely necessary and even then they are scared of spending even a single dime on their network/infrastructure.

Their pathetic excuse for a mobile network is proof of that. Can you say dropped calls? Slow data? Sky-rocketing ping times? You can't even stream low bit-rate music without constant buffering on a smart phone in my area due to the completely useless mobile network.

Their short-sighted investors are the ones I blame along with their completely incompetent CEO.

Guest said:

I don't want to trash AT&T too much, since their existence does create competition, but I'd love to see this deal fall through and them dish out the 9 billion to T-Mobile.

..and not just because; but the fact this merger was announced and pursued, has affected T-Mobile. As proof, just look at what happened to HP when they announced the spin-off.

spydercanopus spydercanopus said:

Kind of shocking. I figured the whole of our government was corrupt. Looks like someone at the FCC wasn't paid off, after-all.

Guest said:

i wouldnt mind if facbook bought tmobile and mine it as a seperate company. just think of the possibilities.

bexwhitt said:

the creation of many thousands of new jobs is a blatant lie

Burty117 Burty117, TechSpot Chancellor, said:

I wonder what network the CEO of AT&T use? Guessing not his own but T-Mobiles?

Win7Dev said:

bexwhitt said:

the creation of many thousands of new jobs is a blatant lie

I agree, merging = same amount of jobs just a bigger company

TorturedChaos, TechSpot Chancellor, said:

I am really glad that someone in the FCC is standing up and saying "this looks like a bad idea for consumers". The idea of AT&T buying out T-Mobile is scary as hell, terrible for competition, and worst of all would let them completely have us consumers by the short hairs.

I REALLY hope this buyout gets stopped.

MilwaukeeMike said:

win7dev said:

I agree, merging = same amount of jobs just a bigger company

Actually, merging USUALLY screws up both companies. There are now two management teams each wanting to do things their own way, and if anything, there would be jobs lost in the short term, and if they succeed, jobs gained in the long term.

Merging companies is a prime time for the competition to steal business because it takes a long time to get the wrinkles ironed out. Look at Daimler-Chrysler... One makes great engines, the other, great transmissions. They thought it would be great, and it only lasted from 1998 to 2007.

Don't assume you're combining companies like Play-Doh and just getting one seamless bigger one.

Guest said:

all of you saying that new job creation won't happen, are wrong!!! just wrong!!

first, at&t would cut 25,000 jobs....then they would create NEW jobs; about 2,500.

there!! NEW jobs created!!!

veLa veLa said:

Businesses spew bullshit like that. If they acquired T-Mobile think of all the jobs they'd phase out due to redundancies.

Although I enjoy using 4G speeds with my GS2 on AT&T

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.