FCC chief seeks added review of AT&T/T-Mobile deal
(Reuters) - AT&T Inc was dealt a blow on Tuesday as the top U.S. communications regulator sought to have its planned $39 billion purchase of T-Mobile USA sent to an administrative law judge for review.
Federal Communications Commission Chairman Julius Genachowski sent a draft order to his fellow commissioners, citing FCC staff findings that the deal would significantly diminish competition and lead to massive job losses.
"The record clearly shows that -- in no uncertain terms -- this merger would result in a massive loss of U.S. jobs and investment," a senior FCC official said.
The agency also concluded that the merger would not result in significantly more buildout of next generation 4G wireless service than would occur absent the transaction.
AT&T argues the deal will accelerate its expansion of high-speed wireless service to nearly all Americans.
The U.S. Justice Department went to court in August to oppose AT&T's purchase of T-Mobile from Deutsche Telekom AG on antitrust grounds. A trial in that case is due to begin on February 13.
Any administrative hearing at the FCC, which is charged with evaluating the public interest merits of the deal, would begin after the antitrust trial, an FCC official said.
AT&T called the FCC action "disappointing."
"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 U.S. economy desperately needs both," Larry Solomon, a senior vice president of corporate communications, said in an emailed statement.
He added that AT&T was reviewing all its options.
ADDING LENGTH TO REVIEW
Mizuho analyst Michael Nelson said the move adds another hurdle to AT&T's prospects for closing the deal. "It's like the FCC is piling on to the DOJ's blocking of the deal," he said.
Analysts at Stifel Nicolaus added that "such an extended FCC review could put added pressure on T-Mobile to seek to exit the merger."
AT&T had hoped to close the deal by the first quarter of 2012.
Genachowski's order still requires approval by a majority of commissioners but an administrative hearing seems likely unless the antitrust case results in a permanent injunction against the transaction, making the FCC hearing irrelevant.
Genachowski is expected to get the support of his two fellow Democrats on the panel. The agency was left with only one Republican after Meredith Attwell Baker's departure in May.
Acquiring T-Mobile would vault No. 2 ranked AT&T into the leading position in the U.S. wireless market. The current industry leader is Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.
Sprint Nextel Corp, the No. 3 U.S. carrier, and a regional competitor, C Spire, have also filed a lawsuit to stop AT&T's purchase of T-Mobile, the No. 4 U.S. operator.
The 2002 proposed merger of EchoStar and DirecTV was the last time the FCC sought an administrative hearing on a merger deal. In that case, the companies ultimately scrapped their deal.
Genachowski circulated a separate order on Tuesday to allow with conditions AT&T's proposed $1.9 billion purchase of spectrum from Qualcomm Inc, an FCC official said. The agency had no comment on any details of those conditions.
Qualcomm offered its unused spectrum after its FLO TV business, a mobile television service, failed to take off.
(Reporting by Jasmin Melvin in Washington D.C.; Editing by Tim Dobbyn)
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Probe: Athletes took fake classes at University of North Carolina
- Canada's Harper vows tighter security after Parliament attack |
- Some U.S. hospitals weigh withholding care to Ebola patients
- Man arrested after jumping White House fence, causing lockdown