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109 page study by the FCC reveals why the AT&T purchase of T-Mobile should be blocked

Posted: , by Alan F.

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109 page study by the FCC reveals why the AT&T purchase of T-Mobile should be blocked
A 109 page study of AT&T's proposed $39 billion purchase of T-Mobile conducted by the FCC comes to the conclusion that if the deal is allowed to go through it would lessen competition in the industry which would lead to higher prices. The carrier was hoping to quash the release of the report, saying it was "irrelevant and potentially prejudicial" but the FCC disagreed. Last week, the agency's chairman, Julius Genachowski, said that he wants an administrative law judge to review the deal, although that order would have had to be voted on by the sitting commissioners.

Before the FCC could vote on its chairman's order, AT&T withdrew its merger application from the agency which is giving the carrier the chance to resubmit it at a later date. Besides reducing competition and raising prices in the industry, the study says that the merger would also lead to fewer jobs.

Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs noted that the report is not an officially voted on order from the FCC. Instead, it is a draft that would be used to raise questions of fact during an administrative hearing. That hearing, of course, will not take place since AT&T withdrew its application. AT&T is now trying to pull an end run around the FCC by suing the Department of Justice to gain approval for the deal. That court battle begins February 13th. The carrier says that it will refile its application with the FCC if it manages to win the suit against the DOJ and gains approval from them for the merger.

source: FierceWireless

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posted on 30 Nov 2011, 01:01 1

1. bossmt_2 (Posts: 454; Member since: 13 Oct 2009)

Said it once, I'll say it again, no way it will go through. Bad business choice by AT&T cause they didn't buy up Spectrum when they had the chance. Verizon clearly had the best 4G strategy, and that's why they'll always be the top dog.

posted on 30 Nov 2011, 01:21 3

2. Dr.Phil (Posts: 1623; Member since: 14 Feb 2011)

Here is the real truth of the matter: the deal is pretty much done. Now, how the deal is going to happen is another story. Deutsche-Telekom is taking losses by still having T-Mobile USA and AT&T is the only company that can afford it (cough cough...err be able to take out such a huge loan for it), let alone be able to use the towers that are there. What will probably happen is AT&T will sell some of spectrum and customer base to another company to make the deal go through. But, the truth is that both sides are pretty much set on this deal going through. I am not saying this is a good thing, but I am not going to try and say this isn't going to happen when we have seen deals go through before that have happened. All it is going to take is a political change.

posted on 30 Nov 2011, 01:37 3

3. HTCOE (Posts: 635; Member since: 20 Nov 2011)

@DrPhil that all sounds good but uhmm?...... NO DEAL ! lol

posted on 30 Nov 2011, 06:53

4. remixfa (Posts: 14604; Member since: 19 Dec 2008)

so its basically everything ive been saying so far. no surprise there. I'd still be surprised if they didnt make it go through in the end. ATT bribed too many politicians for it to fail. They will just divest more or make written promises to do certain things.

posted on 30 Nov 2011, 06:54

5. InspectorGadget80 (unregistered)

OIts bout jobs. If AT&T granted the merger more than half of people working on T-Mobile will loose their jobs.

posted on 30 Nov 2011, 08:18

6. remixfa (Posts: 14604; Member since: 19 Dec 2008)

ATT and Tmobile employees would lose their jobs, not just Tmobile.

ATT employees get paid a good bit more than Tmo employees.

If you had 10 employees making 10 an hour = 100 an hr
if you had 15 employees making 5 an hour = 75 an hr... you get more employees (hense where they say they will create jobs), while still saving money.
but in order for those positions to happen, they have to fire everyone working at 10 an hr, which is where the initial and true loss of jobs will be.

Think it wont happen? Thats exactly what VZW did when they bought Alltell. They kept the alltell employees who made quite a bit less and got rid of the VZW emps.

posted on 30 Nov 2011, 10:32

7. skymitch89 (Posts: 1361; Member since: 05 Nov 2010)

I don't really see how " there would be substantial job losses" if the deal went through. I'm sure that At&t would change most of the T-Mo stores over to At&t stores, and then the employees would be under contract with At&t instead of T-Mo.

posted on 30 Nov 2011, 20:52

9. remixfa (Posts: 14604; Member since: 19 Dec 2008)

because you have ATT and Tmobile overlapping in almost every area. Most of their stores are close together. They are not going to have 2 stores side by side.. that wouldnt make sense. They have to be so far appart (by miles normally) to have enough "area" to garner traffic. For all those over lapping stores, they will be shut down. There is no need to just double up on employees at the surviving stores, so while some may be moved over to help with the increase in traffic from the merger, many will have to be let go.
Nobody is safe in a merger.. from either company.

posted on 30 Nov 2011, 10:33

8. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

The report is basically a roadmap for the DoJ litigation against the merger. The only way the litigation stops is with AT&T signing a settlement saying it won't acquire T-Mo.

AT&T-Mo ain't gonna happen. That is why the auditors forced the charge for the break-up fee to be recognized in 4Q2011.

AT&T better start working on Plan B if they want to salvage the T-Mo debacle. Maybe time to consider a partnership with T-Mo where AT&T invests in shared infrastructure?

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