updated 05:00 pm EST, Tue November 29, 2011
FCC greenlights ATT quitting T-Mobile application
The FCC during a conference call Tuesday cleared AT&T's withdrawal of its application for the T-Mobile merger. It countered AT&T's claims to a 'right' to withdraw with the assertion that the agency had the option to keep the application intact. FCC officials had decided to let AT&T back out because it would be "unfair" to everyone involved, the regulator said during the call.
In a frustration for AT&T, however, the FCC said it wouldn't keep secret the report it had compiled on the merger. The effort, which included direct conversations with both carriers, was too valuable and showed the problems with the $39 billion takeover. A 109-page copy would be made public Tuesday.
Officials expanded on some of the details they gave when they planned the mandatory hearing that would have happened even if the Department of Justice lost its case blocking the deal. It didn't believe any of AT&T's claims, saying that AT&T would build out its LTE network at the same level regardless of the merger to compete wth Verizon, not the 80 percent it claimed was the maximum it could manage. AT&T itself had admitted in an estimate that it only needed $3.8 billion to reach the 95 to 97 percent target.
There would be some network efficiency to combining spectrum, but AT&T was overplaying the impact, the FCC said. The carrier's own savings weren't likely to filter down to end users, and the reduced overhead would lead to job cuts, the FCC found after conducting research. Promises of hypothetical job increases didn't matter, but real jobs did, according to FCC staff.
While AT&T had yet to respond directly to the claim, the company's Senior Executive VP for External Affairs Jim Cicconi posted an adamant declaration that AT&T had a legal right to withdraw, insisting that the use of the term "will dismiss" meant the FCC had no choice. He also believed the FCC had immediately lost any control over the subject as soon as AT&T had filed for a withdrawal.
In making the comments, Cicconi did hint that the real goal of the carrier was to keep documents secret. He suggested a conspiracy at the FCC to back away from the withdrawal so the hearing order would be issued and could be used as evidence against it in the DOJ case. Continuing work after an application was withdrawn was "irrelevant and potentially prejudicial," the executive insisted, and shouldn't be necessary when the DOJ had its own independent investigation.