FCC comes out against AT&T merger with T-Mobile

Posted by Emma Woollacott

The chairman of the Federal Communications Commission, Julius Genachowski, has said the proposed merger of AT&T and T-Mobile needs more scrutiny - the nearest the FCC can get to blocking the deal altogether.

Believing that the deal would harm competition, and thus consumers, Genachowski is referring the proposed merger to an administrative law judge, meaning that AT&T will need to demonstrate that the deal's in the public interest.

Such hearings are rarely resorted to, and generally result in the deal they're reviewing falling apart.

The merger would make AT&T the biggest provider in the US. But the FCC has concluded that it would hamper competition, cause job losses and do little if anything to improve customer service - despite AT&T's claims to the contrary.

The hearing would take place after the Department of Justice antitrust trial, scheduled for February, has taken place, and would effectively put the merger on hold for some time. If the DoJ wins its case, of course, the administrative hearing wouldn't need to go ahead.

The FCC decision has pleased campaigning group Public Knowledge, which has been lobbying against the deal from the start.

"Chairman Genachowski is to be applauded for standing up to AT&T's lobbying machine and moving forward to a hearing designation. We hope that the other Commissioners will follow the Chairman's lead and move swiftly to vote the hearing designation order," says its president and co-founder, Gigi B Sohn.

"Having a formal, administrative hearing will allow AT&T to present publicly the evidence it thinks it has on any number of issues, up to and including, the claims that the takeover will result in the creation of jobs - a result that would run contrary to every other takeover AT&T has engineered. There is ample evidence in the record that this deal would destroy jobs."