AT&T, T-Mobile withdraw from merger under FCC scrutiny

Nov 28, 2011
Finance

After lots of scrutiny over the proposed merger of AT&T and T-Mobile, Ma Bell has withdrawn its bid to merge with Deutsche Telekom’s U.S. carrier to the tune of $39 billion. The removal of the bid comes after the U.S. Department of Justice filed a lawsuit to block the merger, which AT&T said would help […]

After lots of scrutiny over the proposed merger of AT&T and T-Mobile, Ma Bell has withdrawn its bid to merge with Deutsche Telekom’s U.S. carrier to the tune of $39 billion.

The removal of the bid comes after the U.S. Department of Justice filed a lawsuit to block the merger, which AT&T said would help it to grow its network and add better service for its customers. The DOJ claimed that the merger would hurt competition in the U.S. among telecom companies, because it would create one massive leader company in AT&T and T-Mobile, while narrowing the field of major companies in the U.S. to three, with Verizon and Sprint.

TechCrunch has the story, which states that while AT&T is removing its bid for the merger, it isn’t the end of the two companies’ attempt to merge. AT&T seemed to withdraw its filing for the merger after the Federal Communication Commission requested to scrutinize the deal with the help of an administrative law judge, although the company later released a statement clarifying that it withdrew the request before the FCC made its decision.

It seems that AT&T isn’t finished with its attempts to merge with T-Mobile, however, it’s just letting the heat die down for the time being. With the government’s move to block the merger, AT&T probably wouldn’t have been able to get through the legal path to combine with T-Mobile anyway. This latest move suggests AT&T is going to wait things out and make another attempt to merge with T-Mobile when it can satisfy the government’s concerns with the deal.

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Already, it seemed that AT&T was attempting to sell off some $8 billion in assets and broadband spectrum in order to pare itself down to a size small enough to allow the DOJ to permit the merger. The lawsuit filing from the government against AT&T didn’t seem to suggest that the door was closed on the possibility of a settlement that would allow the merger to go through.

For now, however, it seems that AT&T and T-Mobile will remain separate, and AT&T won’t gain the boons it said it hoped to achieve through the merger. While that’s bad news for Ma Bell, it’s good news for opponents of the merger such as Sprint, who said it would be bad for the telecom business and bad for jobs.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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