AT&T’s recently announced plans to purchase wireless carrier T-Mobile for $39 billion has a tough fight with federal regulators ahead, says an anonymous Federal Communications Commission (FCC) official who spoke with the Wall Street Journal on Wednesday.
The unnamed source said that, due to stipulations required by the FCC, the Federal Trade Commission (FTC) and the Department of Justice, the deal will most certainly undergo major changes from its current form — if it can get approved at all. He added that, while the deal has not yet been put under investigation, FCC chairman Julius Genachowski is almost guaranteed to require changes to the plan, and could nix the deal altogether.
“There’s no way the chairman’s office rubber-stamps this transaction,” said the FCC official. “It will be a steep climb to say the least.”
AT&T remains optimistic about the deal’s chances of getting through the federal regulation gauntlet unscathed. “We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions,” said AT&T spokesman Michael Balmoris. “We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish.”
The deal, which would merge the second largest wireless carrier in the US (AT&T) with the fourth largest (T-Mobile) has already begun to receive attention from Capitol Hill. Earlier this week, US Senator Amy Klobuchar (D-MN) raised concerns about the deal, which consumer right’s groups say will stifle competition, and lead to higher prices for customers.
“Although this deal may spark innovation in the wireless industry,” Klobuchar wrote in a letter to the FCC and the Department of Justice, “I remain concerned that increased concentration will, at the same time, lead to fewer choices, higher prices and reduced service for wireless consumers.”
Assuming the deal can make the needed concessions for approval, the deal is expected to take at least 12 months to go through. If the deal falls apart, AT&T will sill have to pay out roughly $3 billion, according to papers filed with the SEC.
To see what kind of changes customers can expect if the deal is approved, check out “AT&T-T-Mobile merger: 7 biggest changes for customers” here.