AT&T-Mobile Might be a No-Go
posted Sunday Nov 27, 2011 by Scott Ertz
It has been a long, hard battle for the AT&T/T-Mobile USA merger so far. They have faced a public who is reluctant to have only 1 GSM carrier left in the country, a Department of Justice lawsuit looking to prevent it and a leaked document revealing AT&T's real reason for wanting T-Mobile USA. Recently, the FCC got involved in the issues when the chairman recommended to his board that they disallow the merger.
AT&T's reaction was not quite what was expected but not terribly surprising. AT&T withdrew their bid for FCC approval completely. Now, this might seem to indicate that perhaps they feel they have failed, but I don't think that is what is happening here. With a major DoJ case coming up, their legal team needs to focus all of their attention there, not let it get spread across fighting two big battles. The easiest way to do that is to eliminate one of the problems. Done.
That's not their only reason for delaying the FCC. Hit the break to find out what else is going on.
In addition to fighting two battles, two federal agencies digging into the companies in question are more likely to uncover damaging documents. There has already been one slip and the companies cannot afford another if they still hope to succeed. By eliminating the discovery process from the FCC, they are limiting the number of hands in the pot at once, thereby limiting the number of possible breaches.
When all is said and done, the DoJ case is going to end up setting the tone for the FCC. If it is approved, AT&T is banking on the hopes that the FCC will not investigate further and will approve the merger as well. If the DoJ wins their case, then the merger is shot anyway and AT&T is out a lot of money: legal fees, advertising, negotiation and of course the $3 billion oops fee, plus reduced roaming rates and spectrum in some markets. This is all or nothing for AT&T and the Department of Justice.
