Nov 30 AT 9:43 AM Anthony Domanico 37 Comments

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


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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  • Nate B.

    In your face ;)

  • thechad

    I wonder what Tmobile will do with the money from the breakup fee?

    • Anthony Domanico

      You mean Deutsche Telekom. They’ll invest in Europe, like they’ve committed to do, and find another suitor for T-Mobile USA.

    • Homncruse

      Probably invest it as some form of incentive to another buyer. :( T-Mobile won’t see a penny of it, I can almost promise you that.

  • Kimbo Slice

    Oh no’s!

  • brookmarin

    I think that the illustration can use a little tweak in light of this great news! You or your graphics expert should add the FCC as an X-Wing blowing up the ATT Death Star before it gets the shot off at tmo!!

  • Droid Dewd

    Yes I am hoping this puts an end to this merger business. Though the alternative isn’t necessarily better,because Tmob will probably sink anyway, it is more palatable to me then having to be with ATT or getting shipped to Cricket.

    If this merger is dead then I at least got one Christmas wish this year. :O)

  • Black Kristos

    This simply reaffirms my choice to jump the T-Mobile ship. No matter how this ends, it’ll end badly for anyone with a contract on T-Mobile.

  • Lane Montgomery

    Please PLEASE Google buy T-Mobile!

    • Anthony Domanico

      Seriously, if AT&T wasn’t allowed to, we have a hard time believe that Google will.

      • Droid Dewd

        Probably best for the Goog to stay out of the mobile phone biz anyway. Though it would be cool from our standpoint if they did. But even crossing my fingers and toes ain’t gonna make it happen.

      • Steve Barry

        Why not? Google doesn’t already own the majority of the GSM market like AT&T does. I personally want Google to buy Sprint, but that’s just me. I think the reason AT&T can’t do it is partially because they already have a huge chunk of the GSM market, and if they buy up TMo, they’ll basically be a monopoly in that technology.

        • oddball

          It’s more an ecosystem thing. If Google owned a phone service company how would Verizon feel providing proprietary network information to a major competitor add in the Motorola acquisition and I suspect Samsung and HTC (just for starters) would be looking for a new OS to work with. Even if Google was interested I think they would stay out just to prevent the possible problems that would arise. I think Amazon would be a far better choice. They have an infrastructure that would benefit greatly from having a provider that they control and they could use it to add to the business model they already have. If they bundled free 3/4g service with the kindle fire or the rumored 10″ and smartphone that are supposed to be coming soon the way they do with the basic kindles that would bring even more sales and is something that B&N wouldn’t have an answer for short term.

      • Steve Barry

        Google would make more sense than AT&T as Google doesn’t already own a huge chunk of the GSM market like AT&T does. I want Google to buy up Sprint, but that’s personal preference!

        I think the reason (or part of it) that AT&T can’t swing it is because it would likely lead to them having a monopoly in the GSM space of wireless. Google wouldn’t be.

        • Droid Dewd

          Sure, they dont have any of the bandwidth issues like ATT does but the issue with Google not getting into being a mobile phone company via TMob or Sprint is because of their involvement with Android. So,it wouldn’t make any more sense than Apple buying ATT or Sprint etc. Because if either of them did then the understanding might be they would use that to forward their own mobile OS over any other. Now, I dont mind Android being on the forefront but that is the reason I can see why Google would not want to get involved that way.

          Better they stay out of that part of the biz and just focus on Android. Now, if Google did buy TMob I would be okay with it. But I am not expecting that anytime soon.

          • brookmarin

            yet somehow comcast was allowed to buy 51% stake in NBCUniversal… I believe that there are certain similarities to this instance… I think if google wanted to change it’s organization to a conglomerate where it dabbles in a little bit of everything (kinda like GE and other huge companies), it would have a much better shot at buying out a mobile carrier.

      • ctrl alt del

        What makes you so sure? My understanding is that the main reason for the att merger being rejected is because it would give them a monopoly on post-paid gsm service in the US. If google purchased tmo this would not be the case.

      • Droid Dewd

        And the Goog should probably stay out of the mobile phone biz anyway. Even though it would be cool from our standpoint if they did.

        • Droid Dewd

          Arrgh now my first comment finally shows. sorry for the double post. :O/

      • Lane Montgomery

        I don’t see it the same. AT&T shouldn’t be allowed to buy T-Mobile because of market consolidation. If Google buys them, we still have the same number of national carriers.

    • cmorris

      I would rather T-Mobile stay independent. I know a Google buyout sounds appealing but I feel any change of direction would be a bad thing. I know most of the argument against the horizontal AT&T doesn’t really apply to the conglomerate merger of someone like Google, but that doesn’t inherently make it a good idea.

      • Anthony Domanico

        I don’t think T-Mobile will survive beyond the next 1-2 years as an independent.


    I don’t know how feel about all of this.

  • uknowme

    I’m pretty happy right now. At&teabag needs to be put in their place.

  • BigCiX

    Google to buy T-Mobile would be good.

  • Mark

    They’re gonna drop the deal just like their calls.

  • Wunako

    ideally, i think it would be great if just a group of investers buy TMo… DT obviously have no interest in the US market and we all know that even if they get the 4billion break up fee there just gonna pocket most and feed the rest into other markets.
    /a group of investors will do what they can to double there investment and have motivation to make Tmo a stronger player. now it would be even better if Google just so happens to be one of the investing groups lol ;)

  • Derek

    About time our government does something right for the “little people”.

  • YMS123

    We all saw this coming

  • inviolable

    What’s going on with the comments on the site? I often get an error or a page refresh with nothing posted.

  • yourissues

    This saddist part of this means no more cool AT&T Deathstar picture :-( They should have closed that side air shaft… Did we not learn anything from Starwars? Come on.. Stupid

  • Winski

    Your link to the FCC report DOES NOT WORK.

  • spintrex

    I should put money on this whole fiasco

  • teecruz

    this makes a person happy.. sure makes me happy! :)

  • applesuxdonkeyd!k

    i think sprint should buy tmo and grow a lil bit the two remaining unlim companies combining would be awesome and i could upgrade from the original evo to something i want not like the gay ass 3d

  • 94wolfpack

    I kind of have mixed emotions about the T-mobile/ATT deal. On one hand having used to work for sprint i have deep seeded dislike for ATT. But actually being able to receive a call while on a non major highway would be nice…

  • phaet2112

    60-70% is laughable, considering they are still basically proposing breaking up Tmo’s customer base. I can’t imagine how Cricket could conceivably handle the extra traffic on their network.