FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

Summary: The FCC released a report today heavily criticizing AT&T's proposed acquisition of T-Mobile, calling out the misrepresentation of the truth in its evidence.

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The Federal Communications Commission (FCC) criticised the U.S.' largest cellular network AT&T for misleading the regulator about the benefits to the economy, and the wider public its acquisition of T-Mobile would bring.

In a written report [PDF], the communications regulator stated that the merger "raises serious concerns", and that AT&T had "failed to satisfy their burden of demonstrating that [the merger] is in the public interest". Slamming the telecoms giant, it says that AT&T's written evidence was found to be "unreliable" and "at a minimum raises substantial and material questions of fact".

Ouch.

Further into the report, the FCC had all but negated the claims that AT&T had made about its public comments regarding the need for the deal to go through in a bid to deploy next-generation 4G wireless technology, as well as creating a wealth of jobs for the economy as a by-product.

But what AT&T was saying publicly, it had a different internal story.

The FCC had: "identified internal AT&T documents and consistent historical practices that contradict AT&T's claim that merging with T-Mobile is essential for AT&T to build out its LTE network to 97 percent of Americans".

Simply put: AT&T made claims it could not support, and the FCC caught them out. Don't mess with the government.

Over the Thanksgiving vacation, AT&T withdrew its application with the regulator as it saw the deal would fail. In return, the telecoms giant would take a $4 billion charge in a bid to prevent further losses down the line.

But to pull out of a major merger -- effectively in doing so by withdrawing its application for federal approval with the relevant regulator -- was done so 'on the quiet', in the hopes that this would slowly sink away during the holiday festivities.

This was AT&T's "bury bad news" moment: a now common-place reference to the UK government's spin doctor, who took it upon herself to issue a memo to her colleagues, stating that the September 11th terrorist attacks would be a suitable cover to release some not-so flattering news about departmental and political affairs.

Today, however, the FCC accepted the withdrawal of the application, after it emerged that it would not rubber-stamp the merger outright without an administrative hearing. It is not a common move for the FCC to take, but in the eyes of the two companies hoping to merge, this signalled trouble ahead.

The report issued today is without doubt a twist of the knife in the chest of the U.S.' largest cellular network. There were no covert tactics here; a knife to the back would have been clandestine and sneaky. The FCC was anything but.

There were, after all, no grounds for which the FCC was obligated under law to release such a report, highlighted by Jim Cicconi, AT&T's head of external affairs, in an emailed statement.

AT&T objected to the report's release, calling it "troubling" and "improper", not before releasing a blog post full of "facts".

The regulator will submit a full unredacted report to the U.S. Department of Justice shortly, which is currently suing AT&T to prevent the deal from going through. The trial is set for February 2012.

AT&T continues to pursue the merger, but the FCC makes it clear that it will not be easy. Should AT&T wish to re-submit its proposal to acquire T-Mobile, the next submission should not look anything like the one proposed before.

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Topics: Government US, Government, Mobility, AT&T

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12 comments
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  • A major corporation lie?

    Oh tell me it isn't true, they would never lie. Come on the Republicans say they would never do anything that was not in societies best interest. We don't need regulation as the free market will work it out.

    Come on corporation's are greedy, don't even care what is in there own best interest in the long run, just to make the quarter's numbers. The only reason they want to buy them out is to eliminate the competition. I think we have seen this behavior from them before!
    miatapaul
    • Yeah, Politicians dont lie, nor are they greedy

      @miatapaul Funny that you say nothing about Democrats--many of whom sit, or have sat on boards of major corporations and have profited handsomely from it.

      By the way, ATT does indeed need more spectrum for expansion in major cities. So don't complain about poor service. Indeed, you might ask why the govt hoards so much spectrum for itself.

      Yeah, all of the govt rules and regulations have really helped things. Im so glad the US govt is in bed with the bankers, with GM, with the airlines--all of those bailouts to the rich have really helped make the US have a strong economy!
      otaddy
      • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

        @otaddy
        I'll take a stab at the horading Question: Because they own all the spectrums! If the government had not bailed out those entities you speaks of, I would hate what the economy would look like now, and I think you would not like it either. But you are right about one thing; Democrats prostitute themselves out to corporations too.
        eargasm
  • Antitrust concerns scuttle resource deployment

    So there's a multitude of peoples reliant on AT&T, other than AT&T's clients. Massive resellers Tracfone have been the only prepaid wireless provider to take wireless service to seniors (SVC), and to the needy (safelink), and needing AT&T's network in order to do so. Now that AT&T have an intensified problem regarding their spectrum, this rapidly scarcer resource will invariably drive prices up...just what the FCC and DOJ wanted to avoid by not having a monopoly. I suppose we now don't have to worry about monopolies, just the fabrication of spectrum.
    Healthemasses
    • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

      @Healthemasses Where's your proof?
      sackbut
      • It is true that govt hoards spectrum and uses it inefficiently

        @sackbut The FCC maintains a list of spectrum allocations in the US. Count up the bandwidth used by all the govt services. Much of it is labelled "military use".

        The other proof would require ATT to release usage numbers and show that all of their current spectrum is being overused currently. Im sure it would be easy to show that markets like L.A, NYC, Boston, Chicago, etc have capacity issues.
        otaddy
  • Thank you FCC !

    As a T-Mobile customer, the last thing I wanted was AT&T to take over as my cellular provider. They have a long history of poor service - so no Thanks. And kudos to the FCC for NOT being like the rest of Washington, and doing what is in the best interest of the consumer. (And BTW - anyone who thinks they can trust business to do the right thing, is delusional. Republicans - are you listening?)
    jpr75_z
    • Democrats have bailed out big business too

      @jpr75_z How come you arent asking them to listen? Oh wait, you actually think Demopublicans and Republicrats are different?

      I would say that anyone who thinks they can trust govt to do the right thing is also delusional. America - are you listening?
      otaddy
  • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

    Oooh.... the FCC doesn't usually use the term 'false claims'.... wonder if we will see some prosecutions for lying under oath soon.
    Lerianis10
  • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

    "Don???t mess with the government."

    You mean the same Government that prohibited Boeing from opening a factory in a 'right to work' state soas to protect union members? The same Government that, through restrictive regulation, is limiting the ability of Boeing to compete on a global level by forcing it to pay inflated salaries and negotiate with union goons?

    Like it or not, T-Mobile will be going out of business in the US. The merger with AT&T was a path to allow some of those employees to stay gainfully employed while also expanding AT&Ts network. Given this ruling - the network T-Mobile has in place will, at best, get piecemealed; their employees will lose their jobs; and AT&T network expansion will take far longer. During that time, we - the public - suffer from this smaller, slower network. Don't tell me to just switch to Verizon -- I get no signal at my house -- their service is so bad they had to give one of their employees an AT&T phone so he could be reached 24/7 while on-call.

    I've come to see many of the Gov't tentacles being used for political means of late; quite blatently, really. This ruling is no different. In the end, the average consumer gets hosed yet again.
    SoccerDad#2
    • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

      @SoccerDad#2 Uh, hey Genius...the Boeing factory has already been opened here. So no, its not the same imaginary government that did a thing that didn't actually happen.
      KojiroTakenashi
  • RE: FCC twists knife in AT&T's chest; Criticizes 'false claims' over acquisition of T-Mobile

    At least AT&T show equal disregard to the government as they do to their clients.
    FWZHR