updated 02:40 pm EST, Fri December 9, 2011
ATTmay have tried too hard to get T-Mobile deal
AT&T's stopped buyout of T-Mobile was hurt by relying on its own usual government lobbying tactics, an exposé revealed Friday. Government regulators and politicians grew alarmed, not reassured, when AT&T began pushing hundreds of non-technology organizations to endorse the merger, the Washington Post learned from interviews. They interpreted the unusually vocal support, which usually came from groups that took AT&T contributions, as a sign AT&T didn't believe it could get approval on merits.
A flurry of AT&T ads that drove home the attempt to seize on economic woes and promise the creation of many as 100,000 jobs backfired. Where regulators didn't normally put much weight into job issues, the full-page newspaper ads and other elements encouraged them to verify the truth. The FCC told AT&T earlier in the fall that it had "produced almost nothing" to support the job claims, and historically mergers have almost always led to job losses, not increases.
AT&T is also known to have stepped up lobbying since proposing the merger in March. It has spent $9 million since March on lobbying, and 116 of the 117 politicians who had signed on to a letter endorsing the deal had taken campaign contributions from AT&T, calling their ethics into doubt.
The takeover may have gone on to cross barriers where even a telecom giant couldn't cross. Arguments that AT&T and Verizon would create a duopoly, with 80 percent of cellphone subscribers, were too loud to ignore. Likewise, the Department of Justice and FCC aren't supposed to be influenced by lobbying where many expect it to steer regular politics. Simultaneously, the Obama administration and its regulators happened to be shifting to a consumer's rights tone and weren't as likely to bend as during the Comcast-NBC merger.
AT&T for its part has blasted the FCC's report, which many believe AT&T had tried to keep secret by withdrawing its application. External Affairs head Jim Cicconi told the newspaper that the FCC report was "harshly worded" and that AT&T "had" to accuse the agency to put out its version of what would happen.