Even After Withdrawing Its Application, AT&T Hits Another Huge Hurdle In T-Mo Deal

In the wake of withdrawing its application to acquire T-Mobile, AT&T has hit yet another obstacle otherwise known as the FCC. See, before AT&T pulled its application, the FCC had big plans to put the deal before an administrative law judge, effectively prolonging the process and magnifying the details of the merger. As part of those big plans, the FCC had compiled an 109-page report with their findings during the review process. AT&T had expected this massive report to stay under the rug since it had withdrawn its application, but the FCC feels it ?furthers transparency.?
And what, might you ask, is in this staff report?
Really, really bad news for AT&T. From the FCC?s official release:
The draft hearing designation order concluded, based on the staff?s analysis, that the record overall does not support a finding that the proposed AT&T/T-Mobile merger would serve the public interest, convenience, and necessity and that the record presents a number of substantial and material questions of fact.
But wait, there?s more:
In the report, the staff finds that the transaction, which would result in the top two wireless providers having a market share of approximately 75 percent, would substantially lessen competition and its accompanying innovation, investment, and consumer price and service benefits, thus undermining key goals of the Communications Act. Indeed, the staff notes that the unprecedented increase in market concentration that would result from this merger triggers the Commission?s screening tests for possible anti-competitive effects in a large number of local wireless markets.
In other words, the report stands behind the claim that this deal will cause a very real duopoly, or at the very least, force the FCC to investigate. But the blue carrier still has a few tricks up its sleeve, right? Two of AT&T?s biggest talking points during this persuasion have been job creation and the acquisition of much-needed spectrum. The FCC staff report had this t