AT&T Fails to Woo FCC with Proposed T-Mobile Merger

Paul Lilly

It was up to AT&T to convince U.S. regulators that its proposed $39 billion takeover of T-Mobile was in the best interest of the public. Plain and simple, "the applicants failed" to do that, the Federal Communications Commission found. Among the list of concerns in the FCC's 109-page report is that the merger would ultimately result in heavy job losses.

The FCC also believes AT&T is likely to build and expand high-speed wireless Internet infrastructures even without the merger, thereby negating one of the deal's supposed benefits, according to a report in BusinessWeek .

"The applicants failed to meet their burden of demonstrating that the competitive harms that would result from the proposed transaction are outweighed by the claimed benefits," the FCC wrote in its report. Furthermore, the loss of T-Mobile in the competitive landscape gave the FCC "cause for serious concern."

As you might imagine, the FCC's ruling was music to Sprint's ears, which echoed the agency's feelings and said in a statement that "approval of AT&T's bid for T-Mobile would lead to higher prices for consumers, eliminate jobs, harm competition, and damp innovation across the wireless industry."

AT&T isn't giving up, however. The FCC allowed AT&T to withdraw its application last week, which means the wireless telco is allowed to submit a new one at any time. That's exactly what AT&T plans to do, though first it will have to amend some things to address the FCC's concerns.

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