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AT&T may sue FCC if it can't withdraw T-Mobile merger

updated 05:05 pm EST, Fri November 25, 2011

ATT insists FCC must allow exit from merger

AT&T general counsel Wayne Watts warned the FCC that the carrier might sue if it wasn't allowed to withdraw its T-Mobile merger application. Reacting to the FCC saying only that it would "consider" allowing the withdrawal, Watts argued that the FCC "has no right to stop us" and that it would be an "abuse of procedure" if the FCC didn't allow it. The company would take any dispute to court, he said.

The counsel added that AT&T had filed to withdraw before the FCC's hearing order, not afterwards. As such, the company may have believed that the Department of Justice antitrust lawsuit and the FCC's existing stance were enough to make the merger improbable. AT&T has already factored in $4 billion in payouts to T-Mobile, or the amount it promised to pay if the merger didn't complete; GAAP rules typically require this if it sees a less than 20 percent chance of a deal.

Many critics, including advocacy group and long-time merger opponent Public Knowledge, have argued that the withdrawal would help with secrecy. If the application was active during the full length of the DOJ lawsuit, the hearing would bring many of the details of the original application to the public. From a practical standpoint, however, AT&T is also likely to want to alter its application should the merger survive the DOJ case.

Both the DOJ and the FCC have shared the opinion that the $39 billion merger was inherently anti-competitive and that no amount of concessions would eliminate that problem. In calling for the hearing, the FCC directly refuted the position that the merger would create jobs, saying that history has shown that most mergers only result in job losses.



By Electronista Staff
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Comments

  1. sibeale1

    Fresh-Faced Recruit

    Joined: Feb 2006

    +8

    Go back to law school, Mr. Watts

    Le's get this straight, Mr. Watts. The FCC is charged with overseeing companies like ATT. ATT doesn't have a right to create a monopoly. For that matter, ATT doesn't even have a right to make a profit. If it wants to make a profit, it'll have to do it the old fashioned way, not by threatening litigation. Despite the recent deregulation craze, ATT doesn't own the government or any part of it.

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