The much talked about merger between AT&T and T-Mobile has reached another set up. AT&T had previously offered to purchase T-Mobile for $39 billion and received a hefty challenge from the Justice Department, which even went as far to file suit against the merger.
New information has come out today from the Wall Street Journal that reports the Federal Communications Commission is requesting a hearing on the deal.
The move from the FCC is a huge setback for the deal which has been stalled over antitrust concerns. In September, the United States Department of Justice filed suit to stop the merger and seven states followed closely behind. Now with FCC chairman Julius Genachowski requesting a hearing to discuss the acquisition the deal is possibly going to be defunct. The FCC is not known for making requests of this nature when it comes to mergers, in fact, the last time was in 2002 regarding the proposed merger of EchoStar and DirecTV. The two companies eventually pulled out of the deal over the FCC concerns.
The FCC concluded that the merger would diminish the competition in the wireless industry and basically backs the allegations made by the Department of Justice. Such a merger would make AT&T the largest cell phone carrier in the United States and has other carriers like Cablevision and Sprint concerned. The Commission does not see any of the benefits that AT&T has touted and instead believes that such a merger would result in job loss, among other things. The FCC decision to request a hearing would be unnecessary should February’s antitrust trial go in favor of the Department of Justice.
The antitrust lawsuit begins in February and will likely be the deciding factor in the AT&T / T-Mobile merger.
