FCC takes stand on T-Mobile, AT&T merger
The regulatory committee that needs to approve the merger between T-Mobile and AT&T may give the companies a hard time, due to potential antitrust concerns.
The biggest news worth talking about over the past week has been AT&T's announcement that it plans to buy rival mobile carrier T-Mobile. Much of the analysis and speculation has surfaced as though the deal is a fait de compli, but now the FCC is telling everyone to take a step back.
In an interview with the Wall Street Journal, an FCC official said, "There's no way the [FCC] chairman's office rubber-stamps this transaction. It will be a steep climb to say the least."
At issue is the fact that such a merger would make the new AT&T the largest mobile provider in the country, and also that it would be the only one offering a GSM network. Sprint and Verizon operate on a different standard called CDMA.
Antitrust laws are designed to prevent a single company from dominating or controlling an entire market. The FCC will argue that is exactly what AT&T is trying to do.
The company disagrees. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish," said AT&T spokesperson Michael Balmoris.
It's not like AT&T and T-Mobile didn't think about this when the merger was proposed. In fact, AT&T made the deal even sweeter by telling T-Mobile if the FCC didn't approve the transaction, it would still fork over $3 billion for the hassle.
That's a lot of money, and it must mean AT&T has exceeding confidence in its ability to sway the FCC. Either way, one thing is certain - it will be a while before anyone even notices a difference.