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FCC may not approve AT&T's acquisition of T-Mobile that easily

Posted: , by Nick T.

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FCC may not approve AT&T's acquisition of T-Mobile that easily
Since its somewhat unexpected announcement, the proposed merging between AT&T and T-Mobile has caused a number of headlines and plenty of comments regarding the potential effects that the market may suffer from such a move. Opinions on the deal's outcome seem to be mixed for now, but according to people familiar with the matter, getting the FCC's permission to initiate the acquisition process may turn out to be a great challenge for AT&T.

The Federal Communications Commission is expected to give the green light to AT&T's proposal only if it concludes that such a coalition is going to serve the public interest and will not have deteriorating effects on competition. However, we are not expecting to hear the FCC's final decision anytime soon since the FCC has reportedly not even started formally evaluating T-Mobile's acquisition yet. In fact, it has been estimated that it may take up to one year until the commission's final verdict gets announced.

Competing carrier Sprint has already stated its negative position against the merging between the two carriers as this would render smaller carriers unable to compete with their more powerful counterparts. On the other hand, AT&T expressed its confidence that the deal would actually result in lower service costs for its subscribers while competition would continue to “flourish.”

If AT&T succeeds in acquiring T-Mobile, it will emerge as the nation's largest wireless carrier with more than 129 million subscribers. However, if the deal does not receive regulatory approval, AT&T may be forced to compensate Deutsche Telekom, T-Mobile's parent company, with a break up fee of $3 billion.

source: The Wall Street Journal via AppleInsider

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posted on 24 Mar 2011, 08:06

1. BeInspired (Posts: 45; Member since: 21 Apr 2009)


What does \"break up fee\" mean?

posted on 24 Mar 2011, 08:57 1

6. protozeloz (Posts: 5371; Member since: 16 Sep 2010)


If AT&T offers to buy T-mobile and in the the end they have to go back on their word....as some sort of apology for the trouble they must may... just the same way users with 2 year contract must pay when they breakup

posted on 24 Mar 2011, 12:30

16. remixfa (Posts: 13902; Member since: 19 Dec 2008)


its to pay for the negative effect that news of the busting of the merger will have on stock values.. time wasted.. paying for lawyers, ect. Its also to make sure that ATT is serious to begin with... like a non refundable deposit.

posted on 24 Mar 2011, 08:24 11

2. oddmanout (Posts: 435; Member since: 22 May 2009)


Why else would at&t buy t-mobile other than for competition purposes??? At&t could care less about public interests. Excuse my ignorance but I honestly think that At&t wouldn\'t be where they are today if it weren\'t for the iPhone... and now that Verizon has it too they\'re fresh out of ideas. How else could they be number 1 without having that slight edge over Verizon? There might be a service increase, but its still the same at&t. Surely they don\'t think those \"we can make calls and use data simultaneously\" ads aren\'t going to keep their business in the ranks of everyone else... I guess at the end of the day, its business and they do what the must to keep it flowing.

posted on 24 Mar 2011, 12:15 7

15. Fanboys Suck (Posts: 609; Member since: 12 Dec 2008)


You are excused for your ignorance...

posted on 24 Mar 2011, 08:30 2

3. Wireless Praying Mantis (unregistered)


A break up fee is compensation Company B (the company getting bought out) receives from company A (the company buying out a particular company) if Company A's acquisition of company B fails to happen for whatever the reason may be. A break up fee is somewhat like insurance for Company B.

posted on 24 Mar 2011, 09:57 1

7. BaiGanyo (Posts: 308; Member since: 07 Feb 2011)


Being in the process of potentially being bought out isn't necessarily good for business/reputation, so if it fails, the payment can help the company recoup some of the losses caused by the chaos.

posted on 24 Mar 2011, 08:42 7

4. puzzle (unregistered)


Man I don't why so many people hate on at&t so much. You guys talk about verizon like if its the greatest thing ever. a cell phone company is just a cell phone at the end of the day. i been having at&t for almost 2 years i dont have any issue with them at all. there customer service is ok, call quality is ok and their data speed is ok as well. so stop knocking on at&t as if it's business is as bad as boost mobile or cricket or metro or virgin mobile. or t-mobile. so stop jocking riding off of other people experience with at&t or rumors. grow up each and every company has there down falls and you people dont make any easier on them.

posted on 24 Mar 2011, 10:19 5

8. XxVerbalxX (unregistered)


waaaaaa this website makes me feel bad about my phone waaaaaa my service is fine waaaaaaa

shut up. im sick of hearing "it works for me so its awesome". this isnt about YOU. its about everyone. so while you might be just fine there may be 1,000,000's of people on at&t who hate it. a lot of them come here. get over it or leave.

posted on 24 Mar 2011, 15:02 2

26. Tre-Nitty (Posts: 460; Member since: 16 Nov 2010)


So that many people say it sucks but yet claim to have ATT service. Talk about a contradiction. I had Sprint, it sucked so I switched to ATT. I mean why would someone stay with a company that sucks. Sounds like a bunch of people here just say what makes them sound cool.

posted on 24 Mar 2011, 13:13 3

19. Dynamic (unregistered)


I have both AT&T and Verizon, I drop calls on a REGULAR basis with full coverage in Dallas, TX with AT&T. Explain to me how that's ok? It's very annoying and unprofessional when you're on a work call and you drop your call 3 times. Someone asks if you are traveling and you respond that you are standing in one place hoping the cell coverage won't disappear like usual.

AT&T internet was faster, but Verizon LTE is FAST. Usually it's faster than my home internet, I look forward to AT&T getting LTE also, maybe that technology won't drop as many calls. (LTE will eventually be voice and data, not just data. I see someone trying to call me out on my statement.). It's my estimation the dropped calls are due to GSM technology and how it connects to cell towers, probably have tolerances set to allow it to breath just far enough outside the tower.

Conclusion: AT&T has "haters", because they've earned them with poor service. Verizon has fanboys, because they've earned it with good service.

posted on 24 Mar 2011, 14:59 3

25. Tre-Nitty (Posts: 460; Member since: 16 Nov 2010)


The same way you have both I have both and my Verizon laptop constantly drops out of service and I have to use my personal ATT phone to go to my company website to get work assignment updates. I live in the Tampa bay area so coverage shows good on both. Verizon is overrated plain and simple. People hate on ATT because they heard their buddy do it. Stand on your own 2 feet and stop following what everyone else says to try to seem cool.

posted on 24 Mar 2011, 23:11 1

39. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)


Its overrated for you...apparently, but for me its the exact opposite. It works in more places than my Sprint service use to but i'm in Indiana. Can't remember the last time i dropped a call but i'm not one to spend volumes of time on the phone either. That's the wireless industry tho, for every person that says a carrier sucks there can always be 2 ppl who say its great where they live/frequent. I would think an area like Tampa would be neutral territory for all carriers.

posted on 25 Mar 2011, 07:50 1

42. roldefol (Posts: 2858; Member since: 28 Jan 2011)


This is why it's so important to have multiple carriers - everyone's experience will differ depending on location, proximity to towers, signal strength, etc. There is no perfect provider for everyone. In my area, I get a great signal with Verizon, and all my family uses Verizon, so I'm not looking to change. In my hometown, I get a weak signal with Verizon but my friend gets a strong signal with AT&T, so he concludes that Verizon sucks. Again, it's his experience telling him that. You go with the best option for YOU, and you can't assume it's what's best for everyone.

But if we get to the point where there are only two providers and one or both doesn't provide good coverage for everyone, we have a real problem as consumers.

posted on 24 Mar 2011, 08:42

5. Yo (unregistered)


The break-up fee is usually goes the other way around. If entity being bought backs out the deal. They would pay the purchaser a break-up fee. Usually only 1-3% of the deal amount also.

Interesting terms.

posted on 24 Mar 2011, 10:23 2

9. BeInspired (Posts: 45; Member since: 21 Apr 2009)


Wow, in that case, i wish the break up fee going to happen, so T-mobile will get a free 3 billion, which is way higher than the 39 million deal. On the other hand, I think AT&T will hate FCC so much, becuase of disapproval, AT&T gave out free money to his competitor. Now I think the merge will work, because of FCC will not do this kind of stupid thing.

posted on 24 Mar 2011, 10:32 3

11. BLikens1619 (Posts: 53; Member since: 12 Apr 2008)


The deal is $39 BILLION.

posted on 24 Mar 2011, 10:26 1

10. ibap (Posts: 688; Member since: 09 Sep 2009)


I can't believe that either ATT or T-mob thought this would sail through. ATT could buy spectrum from T-mob, or they could come up with a roaming agreement, much as Sprint frequently roams on VZW towers. This IS actually an anti-competitive move, and would result in higher costs for consumers in the end.

posted on 24 Mar 2011, 11:05 2

13. snowgator (Posts: 3197; Member since: 19 Jan 2011)


When story first broke, AT&T announced they expected this deal to be a year away from being approved. So, of course they knew it wouldn't sail through. As for this being anti-competitive, I am eternally optimistic, and I am also a hopeless believer in free enterprise. If you have a goal of being the biggest, it doesn't mean the best. Even if this deal is lock, stock and barrel approved, AT&T has to get a plan together that incorporates the tech, customers, plans, spectrum, product support, supply chain, and a million other logistics I would know nothing about and hit the ground running. If a deal like this is done poorly, AT&T may spend years trying to get the pieces to fit. I have heard arguments that Sprint is just now recovering from the poor buisness plan involved with combining with Nextel. While T-Mobiles tech may seem like it compliments AT&T well, it may not in real life. This puts other carriers and mobile companies in the position of getting ahead, and who is to say in 10 years AT&T never regained it's footing and other companies didn't forge ahead? If it is done well, maybe AT&T comes out more competitive then ever.

posted on 24 Mar 2011, 13:21

22. mirinex (Posts: 7; Member since: 26 Apr 2010)


It will go through. Just because a lot of people are negative about it and hate AT&T doesn't mean that AT&T are dummies and would blow $3billions for no reason. After all they mean business!

posted on 20 Apr 2011, 12:01

47. tmobile809 (unregistered)


Lmao just so yu know those ppl who say it will go through because at&t won't lose 3 billions because fhey decide to back up, its not at&t who has the final word, so yu can't say it will happen cuz at&t won't lose 3 billion LOL, to buy anything yu first need approval yu can't just buy anything that easy, yu can have all the money in the world and that wouldn't matter it need aproval for everything, yu think yu can just come and buy my house? Hell no yu need my approval for that no matter how much money yu are willing to pay. So cut the crap and stop affirming something that may not even get approve!

posted on 24 Mar 2011, 10:38 1

12. bowarrow0606 (Posts: 15; Member since: 24 Jan 2011)


If att sucks so bad than why do they have so many subscribers still?

posted on 24 Mar 2011, 11:54 6

14. duh (unregistered)


its called contracts

posted on 24 Mar 2011, 12:52 2

17. tmoney83 (Posts: 37; Member since: 08 May 2009)


nope its called loyalty.

posted on 24 Mar 2011, 13:02 3

18. photostyle85 (unregistered)


No, it's called stupidity

posted on 24 Mar 2011, 13:16 2

20. mirinex (Posts: 7; Member since: 26 Apr 2010)


Will see in a year or two how many people will switch to Verizon.

posted on 24 Mar 2011, 14:19

23. tmoney83 (Posts: 37; Member since: 08 May 2009)


stupidity how. i have no prob. with att at all. i get what i want yea they may be a little on the $$$ side but thats not a big deal to me

posted on 24 Mar 2011, 15:07

27. kcombs (Posts: 245; Member since: 15 Dec 2010)


no it's called people don't have issues with ATT. I work for a ATT call center 95% of the people calling in about there "dropped call" are not getting dropped calls, our system tells us when a customer actuly gets a dropped call. the majority of the issues are with the phones, most of the customers use the cheap free phones, you get what you pay for. the other reason is nobody powers there phone off to reconnect with the network. other reason's are there are many network updates going on through out the contry, where the towers have to be taken off line to do the updates. they have been updating the network for the past 6 months or so.

posted on 24 Mar 2011, 17:20 1

36. duh2 (unregistered)


It is called contracts but customers are still able to break the contract. Plus there are more customers that upgrade and renew their contracts as opposed to new customers,which in terms translates into customers being happy with their service with that particular carrier.

posted on 25 Mar 2011, 11:37

43. XxVerbalxX (unregistered)


its called we are all phone geeks on here and the average user isnt so damn pickey

posted on 24 Mar 2011, 13:19 2

21. Dynamic (unregistered)


Due to a few reasons.

1. Loyal customers who haven't seen better.
2. Area's where their coverage is superior (very few still exist)
3. Area's that have had AT&T for a long time and Verizon is new to the area.
4. The iPhone and other new phones people wanted.
5. Contracts people are in due to the iPhone and other phones.
6. Bad credit and the inability to change service providers
7. A good customer service experience.

I don't think AT&T will fail completely, but I do think we will start seeing their customer base diminish over the next couple years. I think they agree and that's why they are trying to purchase TMobile to combat this and still stay in the #1 / #2 position.

As much as everybody wants to deny it, the iPhone was iconic to the cell phone industry and will eventually lead many people back to Verizon. If it was made available on Sprint, I think a lot more people would be changing due to the cheaper plans, JMO though.

posted on 24 Mar 2011, 16:03

28. Tre-Nitty (Posts: 460; Member since: 16 Nov 2010)


Good luck with your wish for ATT to fail. ATT gave Apple a shot but its their fault that it blew up. You guys kill me. Verizon had a shot at the iPhone regardless of what the CEO says now. They could've buried ATT but they let the iPhone slip through and the rest is history. As much as ppl hate to admit it, ATT has absolutely no fear of Verizon. ATT is huge and they are no more greedy than Verizon.

posted on 24 Mar 2011, 16:33 1

32. LionStone (Posts: 445; Member since: 10 Dec 2010)


Wow, you really see just what you want to see...Dynamic said, "I don't think AT&T will fail completely..." and you take it as his "wish".

Well, what I see is a desperate move by AT&T because they know Verizon is leaving them in the dust. Why doesn't AT&T put that money to good use, like updating their network to 4g? No, they want a quick fix seems like to me because they are already a year or so behind in that department.

The other day when I was getting my T-Bolt, a guy walked in with a weird look on his face like he just got in trouble by his mom. A rep walked up and asked if he could help him, he replied his contract is up with AT&T and wanted the T-Bolt. Rep asks what made him decide on the T-Bolt, the guy says in one word, "Speed".

posted on 24 Mar 2011, 18:29

38. Tre-Nitty (Posts: 460; Member since: 16 Nov 2010)


That's most lame lie I've ever heard. Gtfoh dude. You sound completely ignorant. Verizon is blowing ATT how? Please don't post again.

posted on 24 Mar 2011, 23:28

40. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)


Well, Verizon had At&t in the amount of wireless subscribers, network reliability, larger 3G footprint (even At&t themselves couldn't deny), & overall quality. The gap in growth was continue to widen without acquisitions but by net adds. Either you have been in a coma or you are in serious denial. Quarter after quarter of results have been posted about how Verizon wins in most categories (except customer service which At&t was last) over the competition more so pertaining to what really matters in a cell phone which is their network. $39 billion on the table to purchase T-Mobile but how much money have they invested in strengthened the existing network for those loyal existing customers. I'm not saying they aren't investing money but a #1 wireless carrier with a mediocre network kinda interesting...

posted on 25 Mar 2011, 21:14

45. LionStone (Posts: 445; Member since: 10 Dec 2010)


Yea, just listen to yourself, "dude"...you the CEO of AT&T? lol...

posted on 24 Mar 2011, 14:33 2

24. LOL (unregistered)


AT&T Bought T-mobile for $39 Billion. It was a tough call for AT&T, but with AT&T what call isn't...badum tss

posted on 24 Mar 2011, 16:23

29. attrep (unregistered)


Things for get out of way list.
1.) Verizon Wireless has nothing to do with at&t buy out T-Mobile, T-Mobile wants out of the states wants based only in UK where the the power house.
2.) Verizon Wireless geting the iPhone has nothing to do with anything going on. Last I checked Verizon Wireless got the phone due to crying and lots of money.
3.) Verizon geting the iPhone hurt the more then one way the first way being when the first boost of towers the hole eastcoast had no bars or couldnt call 9.1.1 second case of VZW they sold the landline to fund the iPhone. If there selling and where buying who really hurting?
4.) Verizon Wirless would get the iPhone 5 when it comes out right away they will wait 6-8 months later Apple and at&t contract cant be broke or apple will be paying the big bucks.

For all you fan boys get off Verizon Wireles there time is counting down. Note: T-Mobile will be apart of at&t if the FCC passes it good if not we go to paris france and buy there where there differnt rules to pay by. making at&t the largest mobile in the USA. Then it a mater of time.

posted on 24 Mar 2011, 16:28

30. vzwrep_toledo (unregistered)


First of all we may not get the newer iphones as soon but we will get them.
aT&t can buy tmo thats nothing to worry about thats weak.

posted on 24 Mar 2011, 16:31

31. IamTheGodfather (unregistered)


you sir are a moron. Verizon Wireless never had stake in Verizon landline, it was the other way around...so your saying Verizon Landline sold themselves and gave the money to a company that is only affiliated by name and less than 25% stock holdership.

shocking....you work for ATT....I couldnt tell ( sarcasm)

posted on 24 Mar 2011, 16:40

33. attrep (unregistered)


Do you really want to know whats weak? Your LTE running next to your HASAP+ really not that fast. Yeah T-Mobile working on LTE right now. Just wait till we take it over and better it, crazy fast. We wont get touched after the deal does go threw. When it dose family plans will go down $20 messaging plans will get a $5 cut. single lines will take a $10 cut with same on messaging plan or 2GB of data $15 for family no cap plan $20 same for single line. yes the cap will be gone. yes plans will go down. Yeah we have mobile to any mobile as well. Why pay more for less? Come on you went to school do the math. Were going to change the face of mobile.

posted on 24 Mar 2011, 17:08

34. attrep (unregistered)


IamTheGodfather - Really okay

Verizon Wireless sells landline service for 76% what it worth.
VZW owned all of the landline service. What same time spending alot of money in court over the iPhone they sell parts of the co? Wait they closed 135 branches of the wireless help desks? wait they cost 60% of there thrid party dealers? wait didnt they just pay out 1.5 billiion dollars back fpr over charging customers? before you talk and look at VZW web site or google them or what ever you heard your news from look at from all sides. Verizon cut over 6 million jobs. at&t just open 300 m\illion out west and put up 100 thousand towers which not raiseing or billing more for improvemnt wait cost us alot of money and droping 40 billion after taxes on tmobile and have money to pay everyone and improve areas and still sitting on cash.

posted on 24 Mar 2011, 23:55 1

41. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)


Verizon landline was owned by Vodafone which owns Verizon Wireless as well. Are you sure it wasn't $39 billion on credit? I'm not sure that At&t is sitting on as much cash as you make it seem. Some things just are not consistent with that theory. 2GB data caps with $10 for an extra 1GB of usage looks like cutting corners to me esp. since you have most other carriers still offering unlimited data on smartphones. My theory is that since At&t lost exclusivity with Apple they had to do something to remain relevant to the industry since Verizon received the iPhone/iPad presence. An acquisition to gain the #1 spot would be one of the few things that could be done to remain distinctive. Their phone lineup isn't exactly exciting since the "iconic" phone pretty much dwarfed most of their phones and to be quite honest At&t is not that far ahead of T-Mobile in network performance.

posted on 25 Mar 2011, 11:53

44. Me (unregistered)


AT&T-Mobile! I actually like how that sounds. :D

posted on 25 Mar 2011, 22:00

46. GETOVERIT (unregistered)


ITS BENEFICIAL TO BOTH COMPANIES....THEY BOTH NEED EACH OTHER TO GROW. THEY KNOW THEY BOTH WANT TO BE #1 AND THEY KNOW THEY CANT DO IT ON THEIR OWN. TMOBILE NEEDS THE TOWERS AND THE SPECTUM...AT&T NEEDS THE PEOPLE. AT&T LOST ALOT PEOPLE WHEN THE EXCLUSIVE RIGHTS OF THE IPHONE LEFT, PLUS THE PLENTY OF PEOPLE WHO UNLOCEDK IPHONES AND ACTIVATE THEM ON TMOBILE. IF THE DEAL DONT GO THROUGH, THE 3BIL DOLLARS IS FOR TMOBILE TO BUILD MORE TOWERS(OR PURCHASE), ETC. I THINK IT IS A WIN WIN FOR TMOBILE.

CHEAPER RATES(TMOBILE FOCUS ON VALUE), BETTER COVERAGE(COMBINE THE TWO) & HOT PHONES.....WHY COMPLAIN.

posted on 06 May 2011, 10:42

48. xxxxxxx (unregistered)


fuck at&t they suck, trying to buy t-mobile because they afford to get 4g and get redid of unlimited internet that so stupid. i hope this me merger doesn't happen that way i can keep T-mobile for a long time, but if it happen fuck at&t and i will to sprint and not Verizon they are expensive.

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