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

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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46 Comments

1. BeInspired

Posts: 45; Member since: Apr 21, 2009

What does \"break up fee\" mean?

6. protozeloz

Posts: 5396; Member since: Sep 16, 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

16. remixfa

Posts: 14605; Member since: Dec 19, 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.

2. oddmanout

Posts: 443; Member since: May 22, 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.

15. Fanboys Suck

Posts: 609; Member since: Dec 12, 2008

You are excused for your ignorance...

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.

7. BaiGanyo

Posts: 308; Member since: Feb 07, 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.

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.

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.

26. Tre-Nitty

Posts: 470; Member since: Nov 16, 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.

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.

25. Tre-Nitty

Posts: 470; Member since: Nov 16, 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.

39. CRICKETownz

Posts: 980; Member since: Oct 24, 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.

42. roldefol

Posts: 4744; Member since: Jan 28, 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.

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.

9. BeInspired

Posts: 45; Member since: Apr 21, 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.

11. BLikens1619

Posts: 67; Member since: Apr 12, 2008

The deal is $39 BILLION.

10. ibap

Posts: 865; Member since: Sep 09, 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.

13. snowgator

Posts: 3614; Member since: Jan 19, 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.

22. mirinex

Posts: 9; Member since: Apr 26, 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!

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!

12. bowarrow0606

Posts: 15; Member since: Jan 24, 2011

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

14. duh unregistered

its called contracts

17. tmoney83

Posts: 37; Member since: May 08, 2009

nope its called loyalty.

18. photostyle85 unregistered

No, it's called stupidity

20. mirinex

Posts: 9; Member since: Apr 26, 2010

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

23. tmoney83

Posts: 37; Member since: May 08, 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

27. kcombs

Posts: 275; Member since: Dec 15, 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.

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.

43. XxVerbalxX unregistered

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

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