ATandT, T-Mobile Deal to Face FCC Scrutiny, Pressure From Rivals

By CIOinsight  |  Posted 03-21-2011

Within a day of AT&T's announcement that it would acquire T-Mobile for $39 billion in cash and stock, the carrier moved preemptively to position the deal as good for competition and the United States' telecommunications network. Should the acquisition meet approval, it would make AT&T by far the largest carrier in the United States.

In an early-morning phone call with investors and analysts, AT&T executives did their best to steamroll any possible objections to the deal's regulatory approval. In coming weeks and months, the Federal Communications Commission and the U.S. Department of Justice will both examine whether the acquisition violates antitrust regulations, and possibly ask the carrier for concessions such as price caps. 

"This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies," Randall Stephenson, AT&T's chairman and CEO, wrote in a March 20 statement. "With additional spectrum and network capabilities, we can better meet our customers' current demands, build for the future and help achieve the President's goals for a high-speed, wirelessly connected America."

Stephenson and other executives reiterated those points in more detail during the March 21 call, and argued that a variety of large and small rivals--not only Verizon and Sprint, but also MetroPCS and Leap Wireless--will keep things fiercely competitive.

"Wireless competition will continue to flourish," read a slide from the PowerPoint deck accompanying the call.

With an eye toward regulators, AT&T is also arguing that the transaction "is in public interest," helping ease impending spectrum shortages, expanding LTE to more of the American population, and improving the quality of voice and data service. The combined AT&T and T-Mobile will save costs via merging backend processes and closing a selection of retail stores.

But AT&T's rivals are already making noise about the deal. 

For more, read the eWEEK article: ATandT, T-Mobile Deal Will Face FCC, Rival Pressure.