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FCC launches AT&T T-Mobile review

Gentlemen, start your lawyers, lobbyists, spinmeisters, arm-twisters...

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The US Federal Communications Commission has begun the formal process of reviewing the proposed acquisition of T-Mobile by AT&T.

The FCC on Thursday issued a Public Notice announcing that it had opened a docket on the matter, and issued a Protective Order outlining "procedures to limit access to proprietary or confidential information that may be filed in this proceeding."

Considering the power and money involved in an acquisition of this magnitude – on March 20, AT&T announced that it had agreed to acquire T-Mobile from Deutsche Telekom in a $39bn deal – you can be sure that reams of documents, testimony, and opinion will be filed.

Accompanying the announcement of the pending acquisition, AT&T chairman and chief executive Randall Stephenson said: "This transaction delivers significant customer, share owner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations."

Reaction was swift:

  • An unnamed FCC official told The Wall Street Journal: "There's no way the [FCC] chairman's office rubber-stamps this transaction. It will be a steep climb to say the least."
  • New York attorney general Eric Schneiderman said his office would carry out its own review of the proposed deal, saying: "The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise."
  • Sprint Nextel's senior vice president for Governmental Affairs Vonya McCann raised that wireless carrier's objections, saying: "Sprint urges the United States government to block this anti-competitive acquisition. This transaction will harm consumers and harm competition at a time when this country can least afford it."
  • The president of the Communication Workers of America, Larry Cohen, voiced his support for the merger, saying: "Hundreds of [T-Mobile union] members in the US will welcome this news since of all the possible partners, AT&T will mean better employment security and a management record of full neutrality toward union membership and a bargaining voice."

Cnet reports that during a press conference on Thursday the FCC explained its review would have two main thrusts. It will first determine whether the deal runs counter to either the US Communications Act – the guiding legislation – or FCC rules. It will then determine if the proposed acquisition is in the public interest.

That somewhat amorphous concept – the "public interest" – is a highly debateable term, especially in these days of growing corporate power, a divided Congress, an embattled FCC, and an administration that, quite frankly, has bigger battles on its hands as it engages in budgetary warfare with an emboldened opposition.

In the increasingly surrealistic environs of the US Congress, the Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy and Consumer Rights, will hold its own hearings on the proposed merger on May 11.

The title of that event: "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?" ®

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