Nov 30 AT 9:43 AM Anthony Domanico 37 Comments

Despite a successful application repeal, FCC releases scathing report on AT&T-Mobile merger

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If you blinked at our report on the AT&T-Mobile deal yesterday (you may have missed that over the Thanksgiving holiday weekend), AT&T put in a request to the FCC to withdraw its merger application. AT&T did this for several reasons. The two prominent reasons are the need to focus on the pending court case with the Justice Department and the need for a more palatable deal that includes selling off a significant amount of customers and spectrum to Leap Wireless, which AT&T hopes will allow the deal to gain approval.

As a result of withdrawing their application, AT&T believed the FCC would not release their report on the proposed merger. Boy were they wrong. The FCC accepted AT&T’s withdrawal, but instead of holding back their report, the FCC released their 109-page analysis to the public domain. This is a significant move on the part of the FCC, because the scathing report will likely hurt AT&T’s chances of success in their upcoming legal battle with the Justice Department. Furthermore, if the merger survives the lawsuit with the Justice Department, the restructured agreement would ultimately end up back on the FCC’s desk for review.

Though AT&T’s lawyers yesterday sounded optimistic, claiming the addition of the Leap Wireless agreement would bolster the odds of the deal going through to about 60-70%, it appears they have reason for concern this morning. National Public Radio reported this morning that analysts are now suggesting a much more dismal 20-30% chance of approval.

It appears the writing is on the wall and that AT&T is fighting a steep uphill battle if they’re ever going to salvage the purchase of T-Mobile. Good thing they took out that $4 billion charge against earnings in preparation for having to pay Deutsche Telekom the breakup fee. If you want to read the 109-page document for yourself, head over to the FCC’s site for the full paper.

Source: The Verge

Anthony loves all things technology, from hardware to apps and games. You can connect with him via Google+ or Twitter by clicking one of the fancy doo-dads above.

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