FCC Finds AT&T/T-Mobile Merger Anti-Competitive

Just in time for Thanksgiving, Federal Communications Commission (FCC) chairman Julius Genachowski has declared the proposed AT&T/T-Mobile merger a turkey.

The full FCC must still vote, but Genachowski said that after reviewing 200,000 pages of documents and holding more than 100 stakeholder meetings, he has concluded the deal is not in the public interest. The FCC also reviewed 50 petitions to reject the deal from companies including Cablevision, C Spire, DISH, EarthLink, and Sprint.

Technically, the FCC cannot block the deal and it's likely the affair will wind up in court, but Genachowski's finding pretty effectively sticks a fork in it and finds it over-cooked.

The FCC has the power to approve the deal but if it finds it unacceptable, it can only refer it to an administrative law judge, who is obligated to consider all of the evidence gathered during the FCC's review.

And the conclusion of the FCC's review, as Genachowski reads it, is that a combined AT&T and T-Mobile would result in unprecedented concentration and massive layoffs despite AT&T's claim that it would save jobs and speed the deployment of high-speed broadband to rural and underserved areas.

DOJ Suit

The U.S. Justice Department has reached similar conclusions and has already sued to block the merger.  That case is expected to go to trial in February, and the FCC is likely to hold off until the outcome of that case is clear. If the DOJ prevails, no further FCC action would be needed.

Just a few weeks ago, Attorney General Eric Holder made it known the Justice Department's opposition is not a token gesture.  He said litigators are "ready and eager" to go to trial.

AT&T issued a statement calling the FCC's move 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," Larry Solomon, senior vice president of corporate communications for AT&T, said. "At this time, we are reviewing all options."