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F.C.C Places Major Hurdle In AT&T, T-Mobile Merger

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AT&TJulius Genachowski, Chairman of Federal Communications Commission, on Tuesday took steps to block the proposed mobile phone company’s merger of $39 billion between T-Mobile and AT&T (NYSE:T).

Julius made the move following the conclusion made by the commission’s staff that the merger would affect consumers, kill jobs and also result in a wireless phone industry that is excessively concentrated, said F.C.C officials.

 


This move puts another hurdle in front of the nation’s second largest wireless phone company, AT&T, as it planned to acquire T- Mobile, the fourth largest carrier. The justice department in August filed a federal antitrust lawsuit to block the deal, stating it would smother competition.

 

On Tuesday, Julius informed the other three commissioners at F.C.C that he wished to refer the proposed mobile company merger for a trial hearing to an administrative law judge where AT&T will need to show that the deal was in public interest. An agency official said that the commission in the next couple of weeks is likely to vote on the Chairman’s plan.

 

F.C.C will have to approve the deal because the merger of the two mobile companies AT&T and T-Mobile will require transfer of licenses as it will make use of public airways for wireless internet access and mobile phone signals. The judge will give a decision weighing the evidence, which the F.C.C will review prior to the final judgment.

 

Until the antitrust trial, which is scheduled for February at District Court Washington, U.S. is completed, the hearing before the administrative judge will not happen. Larry Solomon, AT&T’s senior vice president for corporate communications, called F.C.C’s action disappointing.

 

AT&T’s rivals and consumer groups hailed the commissions move, as they were strongly against the merger. F.C.C’s chairman had said in August that when the antitrust lawsuit against AT&T was filed by the Justice Department it suit presented severe concerns about its impact on competition.

 

Robert Quinn, vice president for federal regulatory at AT&T, said that the merger is going to be a medium of innovation, the merger will result into further investment and more jobs in rural America, at an interview earlier this month.

 

AT&T has said that it plans to invest about $8 billion in wireless infrastructure over the first half a dozen years following the merger between the two wireless mobile companies. According to analysts, that level of investment could create grounds for 55,000 to 96,000 employments over these years.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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