updated 04:35 pm EDT, Fri October 31, 2008
FCC warns T-Mobile of deal
The FCC investigation into the Verizon Wireless and Alltel Corp. tie-up and therefore foreign-controlled assets in other telecommunications companies, which could spell trouble for T-Mobile for something it has done back in 2001, according to a WSJ report. On October 17, the FCC sent a warning letter to T-Mobile, advising it that the acquisition by Germany's Deutsche Telekom was not performed under the mandated 20 percent voting stock threshold. The FCC found Deutsche Telekom has a 30 percent, non-controlling stake in T-Mobile, and the letter is asking T-Mobile to come up with a solution that would comply with the 20 percent limit within 30 days.
T-Mobile unofficially responded by saying they believe their co-operation with Deutsche Telekom is legal, but they are open to restructuring to resolve the issue. Back in 2001, the deal was a non-issue as per the FCC, as the German company was a non-controlling power. Industry analysts believe T-Mobile can simply resolve the issue by reorganizing their agreements with foreign partners.
As reported earlier today, the Verizon-Alltel merger has already been approved by the Justice Department, but still awaits approval by the FCC.