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December 01, 2011

AT&T Lashes Out at FCC About T-Mobile Merger Report

By Erin Harrison, Executive Editor, Strategic Initiatives

Don’t bite the hand that feeds you. Words of advice AT&T (News - Alert) might have considered before lashing out at the U.S. government this week.

AT&T Inc. did not mince words in its response to the Federal Communications Commission calling its report about its potential T-Mobile (News - Alert) merger “unfair” and “biased,” according to The Associated Press.

AT&T announced last spring it agreed to buy T-Mobile USA for $39 billion, but the deal is facing a great deal of opposition from the U.S. government.

Following an internal report issued last week, FCC (News - Alert) Chairman Julius Genachowski notified AT&T Inc.’s chief executive to advise that the federal agency plans to block the company’s $39 billion purchase of T-Mobile USA.

The Justice Department has already sued to block the transaction as anticompetitive, with a U.S. district court trial set to commence in February.

According to Bloomberg (News - Alert), “Genachowski told AT&T Chief Executive Officer Randall Stephenson that he would ask fellow commissioners to send the proposed acquisition of T-Mobile USA Inc. to a hearing before an agency judge, Dallas-based AT&T said in a Nov. 25 filing that it circulated by e-mail,” during the Nov. 22 phone call.

AT&T and Deutsche Telekom (News - Alert) withdrew their FCC merger applications just before the Thanksgiving holiday on Nov. 23, according to FCC filings.

At this point, given the legal obstacles and government opposition, there is a slim chance the merger will ever go through.

This week, the FCC took the unlikely step of releasing its analysis of the merger, finding “questions of fact” about AT&T’s stated justifications for the merger and dismissed most of AT&T’s arguments, The AP said.

After the FCC released its report earlier this week, AT&T then countered with its own criticisms, saying the FCC draft was not voted on by the five-member commission, a legal step necessary for releasing the report.

According to the AP, “AT&T released a more thorough, combative response to the report,” pointing out how unusual such a step is considering AT&T “spends heavily on lobbying and cultivates close relationships with regulators.”

In its statement, the Dallas-based phone company said, “The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis,” according to the AP.

Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TMCnet, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell
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