Federal Communications Commission Chairman Julius Genachowski will allegedly come out against the proposed AT&T acquisition of T-Mobile USA, saying that the deal is not in the public interest, reports the Wall Street Journal, citing persons close to the matter. Genachowski is reportedly asking the other four FCC commissioners to approve an administrative hearing, during which AT&T and T-Mobile would be forced to convince the panel why the merger would serve the public interest — an argument that the FCC says the wireless companies have so far failed to make.
The FCC’s resistance against the AT&T/T-Mobile merger follows a lawsuit by the Department of Justice to block the deal. If approved, the FCC hearing would not take place until the DoJ lawsuit trial, which is set to begin in February, has concluded. Both the FCC and the Justice Department must approve the $39 billion sale before it can proceed.
Following the DoJ’s suit against the merger, Genachowski said that the FCC has “serious concerns about the impact of the proposed transaction,” which could prove detrimental to customers and the wireless industry as a whole.
In a statement issued to Consumerist, AT&T senior vice president of Corporate Communications called the FCC’s actions “disappointing.” He added: “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. At this time, we are reviewing all options.”
The last time the FCC held an administrative hearing over a corporate merger was in 2002. The hearing reviewed the proposed merger of EchoStar and DirecTV. That deal was later abandoned.
If the AT&T/T-Mobile deal falls apart, AT&T will be forced to pay Deutche Telekom AG, the current parent company of T-Mobile, between $3 billion and $6 billion in penalties.
The FCC is expected to officially announce its plans for a hearing on the merger soon. But we can already hear the champagne glasses clinking at Sprint headquarters.
He added: “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. At this time, we are reviewing all options.”
I really can’t see how this merger would create new jobs….. It seems like there would be a lot of redundancy between the operations of AT&T and T-Mobile…. i’d anticipate massive layoffs if it were to go through.
Yeah, any mention of “jobs” these days is simply a play to the politicians who cannot look like they’re against creating jobs in anyway, seeing as it’s an election year. The jobs thing is complete nonsense.
It’s in my interest, and I’m in the public. I want faster download speeds on my AT&T service!
AT&T CEO believes that the merger is for the public interest?!!.. I would correct him… HIS and AT&T shareholders interests… Does he think the general population is this stupid?.
Knowing ATT & T-Mobile I think you should look at market presence and why they feel it is a good move. It is not a hostile takeover but a mutually agreed decision that in the end the 2 combined are better than 2 at war.
Will there be redundancies, yes there will but if the aggregate company provides better overall alternatives to other providers including coverage, download speeds and associated services they provide why would this natural evolution in the market be a bad thing? Better services and pricing mean more options on the whole for consumers and that is a bad thing?? When the company, now reformed adds subscribers it adds new and better jobs in emerging market segment rather than the stay the course model you seem to promote. I am a Verizon customer and have been for a long time but I see that changes by Sprint and others, and more specifically what the customer needs are what drives this. Do you really think they merge with T-Mobile (key word is merge) and then offer less for more money, that hands the field to Verizon and renders the whole thing a huge monetary loss. And last yes I do think that people who read and believe the Government is acting in their interest do not understand what is at play here long term, and that is the creation of a thriving evolving enterprise that helps not hurts consumers. The CEO will get wiped off the face of the earth and he will make bupkis unless this yields better results for the company and losing subscribers will accelerate that immediately. The market will demand more and they will provide it as it is the only way this makes any sense, and if you had even a remedial understanding of how companies work and why this was agreed upon by both companies you would not be posting drivel as you have. The CEO is no a king and does not own the company, investors do and that is how they capitalize and grow the company and give consumers more, business 101. The Government has never been able to provide any goods or services successfully and they have no business in trying to start telling companies what to do now.