FCC lets AT&T off the hook, but still releases damning merger report
AT&T, however, didnt get everything it wanted. The FCC is releasing its 109-page staff report that found that the merger would do more public harm than good. The report will be redacted to protect confidential information submitted by AT&T and T-Mobile, but it will contain the full explanations of why the commission staff thought the merger was a lemon. FCC lawyers countered almost all of AT&Ts claims about the deals supposed benefits, stating the merger would kill jobs, rather than create them; would result in a 4G network no bigger than AT&T would build on its own and would stifle wireless competition in 99 of the 100 largest U.S. markets.
The FCC couldnt deny the merger outright last week, but it appeared set to use the most powerful weapon at its disposal: sending it to an adminis! trative law judge for review. Rather than deal with two judges simultaneously, AT&T opted to withdraw its petition last week before FCC Chairman Julius Genachowski tabulated an official vote of commissioners.
That raised the hackles of consumer advocacy groups Public Knowledge and the Media Access Project, which accused AT&T of trying to game the system. They petitioned the FCC to deny AT&Ts request, claiming an evidentiary hearing before an administrative judge would air all of AT&Ts dirty laundry some 1 million documents that the FCC has reviewed which could have a direct bearing on the DOJs antitrust case. Dish Networks has even called for the FCC to publish its findings, according to Bloomberg.
AT&T claimed that the FCC had no right to deny withdrawal of its petition, saying that it submitted its request before the commission voted. AT&T senior EVP and general counsel made the argument very forcefully in a statement:
The FCCs own rules give us this right and provide that the FCC will grant any such withdrawal. Further, this has been the FCCs own consistent interpretation of its rules. We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.
Credit: Hasbro
FCC officials, however, said the decision to approve or deny was under the commi! ssions d iscretion. While the deals opponents wont get their evidentiary hearing, theyll get their paperwork. The FCC also plans to keep the docket, keeping any comments and filings in the record if AT&T does choose to resubmit its merger application. An FCC official said the commission has never faced a situation like this before in which an operator takes a petition to the brink, pulls back but publicly admits it plan to return to the edge in the future. If AT&T resubmits its report the process starts again and Ma Bell gets a new 180-day clock. Given the circumstances, the official said the FCC felt it was in the public interest to release the information it had collected and keep the record open while AT&T deliberates.
Meanwhile, rumors are popping up that AT&T is trying to nail down an eleventh-hour deal that would make the merger more palatable to the DOJ. Last week, Bloomberg reported that AT&T was willing to part with as much as 40 percent of T-Mobiles assets to close the deal. On Monday, the New York Times Dealbook reported that AT&T is in talks with Leap Wireless to sell it a big piece of T-Mobiles customer base, networks and spectrum. Leap, a regional operator that sells mobile service under the Cricket brand, would certainly welcome the opportunity to expand beyond its footprint of small and mid-sized markets, but it probably doesnt have to resources to buy the assets. That is unless AT&T were desperate enough to give them away for a song.
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