hurricanemaxi
Joined: 04 Nov 2011
Posts: 120
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 Posted: Wed Nov 23, 2011 4:57 am Post subject: AT&T Faces New Roadblock on T-Mobile |
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AT&T Inc. (T)’s $39 billion bid for T- Mobile USA Inc. faces a new roadblock as Federal Communications Commission Chairman Julius Genachowski asked commissioners to send the proposal to an agency judge for a hearing.
The hearing, which could lead to a rejection of the deal, was proposed in an order that Genachowski offered today for consideration by the full FCC, officials who declined to be identified said in a briefing with reporters. Agency staff had found the proposed merger would significantly diminish wireless competition, one official said.
The hearing would take place after the resolution of a Justice Department court challenge to the transaction, the FCC officials said. The antitrust case is scheduled for trial in February.
AT&T is “reviewing all options,” Larry Solomon, senior vice president of corporate communications, said in an e-mailed statement.
“The FCC’s action today is disappointing,” Solomon said. “It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both.”
The purchase of Bellevue, Washington-based T-Mobile would eliminate one of four national U.S. wireless carriers. AT&T has said the transaction would help it bring wireless high-speed Internet service to more people.
‘Significant Obstacle’
The deal would lead to massive job losses as AT&T realizes savings, and the record at the FCC doesn’t show the merger would significantly spur the spread of wireless high-speed Internet service, an agency official said today. Wireless concentration would increase in 99 of 100 markets, the official said.
The FCC can designate a transaction for a hearing, which is akin to a trial, when it cannot find the deal is in the public interest. The administrative law judge presiding over the hearing delivers an initial decision that goes to agency commissioners for a vote. Commissioners may vote in coming days on Genachowski’s proposal.
“A hearing could go on for six to 12 months,” Andrew Lipman, a Washington-based partner with Bingham McCutchen LLP, said in an interview. “It’s certainly a significant obstacle and roadblock.”
Echostar Challenge
The last time the FCC designated a media merger for a hearing was in 2002, when the agency challenged Echostar Communications Corp.’s bid for fellow satellite company DirecTV (DTV), Lipman said. The companies dropped their bid, he said.
AT&T could continue to fight the Justice Department in federal court, and if it wins there seek a settlement to stave off an appeal of the verdict and to satisfy the FCC, Christopher King and David Kaut, analysts with Stifel Nicolaus & Co., said in a note to investors today.
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