AT&T has 'steep climb' ahead to get FCC approval of T-Mobile purchase

Posted:
in iPhone edited January 2014
According to an anonymous official at the Federal Communications Commission, AT&T faces a "steep climb" in convincing the chairman to approve its proposed purchase of T-Mobile USA.



The Wall Street Journal spoke with an FCC official, who declined to comment on the record, on Wednesday about the $39 billion deal from AT&T to acquire T-Mobile USA from parent company Deutsche Telekom. "There's no way the chairman's office rubber-stamps this transaction. It will be a steep climb to say the least," said the official.



However, an AT&T spokesperson responded optimistically to concerns that the deal could be held up by the Commission. "We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions," said spokesman Michael Balmoris. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."



According to the Journal's report, comments by FCC Chairman Julius Genachowski on Tuesday indicate the agency's commitment to encouraging a competitive marketplace. "While we're still working through details of a data-roaming framework, I believe the core proposition is beyond dispute: healthy competition produces greater innovation and investment, lower prices, and better service," Genachowski said.



However, Genachowski and other FCC commissioners have remained silent regarding the proposed acquisition, the report noted. In addition to an FCC review, the Justice Department will also evaluate the deal. According to a filing with the SEC, AT&T stands to lose $3 billion if the deal is broken up.



On Monday, U.S. Senator Amy Klobuchar called for the FCC and the Department of Justice to look into the proposed deal. "Although this deal may spark innovation in the wireless industry," Klobuchar wrote in a letter to the two agencies, "I remain concerned that increased concentration will, at the same time, lead to fewer choices, higher prices and reduced service for wireless consumers."



A FAQ posted to the T-Mobile website earlier this week noted that the acquisition could take as long as a year to receive approval, further forestalling the expected arrival of Apple's iPhone on the network.



Third-place U.S. carrier Sprint could stand the most to lose from the proposed deal. Earlier this week, comments from the network's executives at an industry conference suggested that the company's pricing and profitability would be affected if the acquisition were to go through in its current form.
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Comments

  • Reply 1 of 43
    C'mon. A couple of mil in kickbacks, a few campaign contributions, and they're all set to marry the bride.
  • Reply 2 of 43
    benroethigbenroethig Posts: 2,782member
    Not so much. Expect divestures. AT&T will give up smaller markets for better coverage in the big ones.
  • Reply 3 of 43
    johnlewjohnlew Posts: 26member
    Yet another chance for the FCC to try to control things outside of the written law.
  • Reply 4 of 43
    Quote:
    Originally Posted by AppleInsider View Post


    ...

    On Monday, U.S. Senator Amy Klobuchar called for the FCC and the Department of Justice to look into the proposed deal. "Although this deal may spark innovation in the wireless industry," Klobuchar wrote in a letter to the two agencies

    ...



    How exactly does this spark "innovation" in the industry, in the sense that most people understand the word "innovation" to mean? Charging higher prices doesn't count.
  • Reply 5 of 43
    bigmikebigmike Posts: 266member
    Quote:
    Originally Posted by whatisgoingon View Post


    How exactly does this spark "innovation" in the industry, in the sense that most people understand the word "innovation" to mean? Charging higher prices doesn't count.



    Exactly. They think that when the masses hear the word "innovation" they'll think, "oooh cool, we're part of something big and innovative" and will shell out extra dollars for something that shouldn't cost shit in the first place. But, for most people, they're right.



    Yet another small step towards a non-private, no-options world.
  • Reply 6 of 43
    bigmikebigmike Posts: 266member
    Quote:
    Originally Posted by JohnLew View Post


    Yet another chance for the FCC to try to control things outside of the written law.



    Ditto.
  • Reply 7 of 43
    gprovidagprovida Posts: 258member
    Leverage ATT to adopt net neutrality and bring wireless to undersea to areas would be great selling point.
  • Reply 8 of 43
    aluopaluop Posts: 57member
    Quote:
    Originally Posted by AppleInsider View Post


    said spokesman Michael Balmoris. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."



    Apparently Mr. Balmoris thinks everyone else's IQ is as low as his.
  • Reply 9 of 43
    hudson1hudson1 Posts: 800member
    Quote:
    Originally Posted by JohnLew View Post


    Yet another chance for the FCC to try to control things outside of the written law.



    I really don't know why the FCC thinks it's supposed to be involved with this. Seems this is entirely a matter for the DOJ, or at least is supposed to be.
  • Reply 10 of 43
    onhkaonhka Posts: 1,025member
    Quote:
    Originally Posted by AppleInsider View Post


    According to the Journal's report, comments by FCC Chairman Julius Genachowski on Tuesday indicate the agency's commitment to encouraging a competitive marketplace. "While we're still working through details of a data-roaming framework, I believe the core proposition is beyond dispute: healthy competition produces greater innovation and investment, lower prices, and better service," Genachowski said.



    And he considers the offerings offered by Apple's competitors 'healthy'? Seems one sided to me.
  • Reply 11 of 43
    dooghdoogh Posts: 37member
    Quote:
    Originally Posted by Onhka View Post


    And he considers the offerings offered by Apple's competitors 'healthy'? Seems one sided to me.



    There are plenty of computer, phone, etc. manufactures. The cellular industry has a very high barrier to entry.



    The WRITTEN LAW very clearly states the FCC has the RIGHT to block companies for anti-trust reasons.



    The chairman is exactly right, more competition is better. Merging reduces competition. ATT in the past became super monopolistic and they have been broken apart many times because of this.
  • Reply 12 of 43
    al_bundyal_bundy Posts: 1,525member
    Quote:
    Originally Posted by ALUOp View Post


    Apparently Mr. Balmoris thinks everyone else's IQ is as low as his.



    i remember the days when we had a dozen cell carriers in the US. high prices, bad coverage, etc. as the number of companies dwindled due to mergers the prices fell and the coverage area increased
  • Reply 13 of 43
    roos24roos24 Posts: 170member
    I still don't believe this. Germans take (or buy, if they have to), but never sell without an ulterior motive; it's not in their DNA. If the FCC allows it, I predict that AT&T will be German-owned within five years. With their strong Euro it will be very easy for them to increase their stake in AT&T.
  • Reply 14 of 43
    bryanlbryanl Posts: 67member
    Quote:
    Originally Posted by al_bundy View Post


    i remember the days when we had a dozen cell carriers in the US. high prices, bad coverage, etc. as the number of companies dwindled due to mergers the prices fell and the coverage area increased



    Most of these phone companies used to be one company. Many of them came into existence after the original AT&T breakup.
  • Reply 15 of 43
    dooghdoogh Posts: 37member
    Quote:
    Originally Posted by al_bundy View Post


    i remember the days when we had a dozen cell carriers in the US. high prices, bad coverage, etc. as the number of companies dwindled due to mergers the prices fell and the coverage area increased



    Do you realize how extreme that is? Sure, find evidence to support your point of view. But cellular prices are crazy high right now. T-Mobile's prices are HALF that of AT&T.



    Yes, service improved. Yes phones became cheaper. That correlation, NOT causal. You cannot claim correlation relationships are true.



    The reason coverage expanded and prices dropped is because of the natural progression of technology. The second you buy a computer, it is immediately outdated.



    It takes time to build networks, that's the only limitation.



    JUST LOOK at what competition did to ATT? Verizon said, LOOK you have terrible service. As a result, they have spent billions attempting to improve their service. With monopolies, which is the natural outcome of merging, eventually Verizon or AT&T will be more powerful and buy the other. Then what incentive will there be to lower prices and improve service?
  • Reply 16 of 43
    john.bjohn.b Posts: 2,742member
    But the Verizon takeover of Alltel was a shoe-in?



    Really?



  • Reply 17 of 43
    rtm135rtm135 Posts: 310member
    Yeah, who cares which department looks into it as long as it's being looked in to?



    Quote:
    Originally Posted by Hudson1 View Post


    I really don't know why the FCC thinks it's supposed to be involved with this. Seems this is entirely a matter for the DOJ, or at least is supposed to be.



  • Reply 18 of 43
    tallest skiltallest skil Posts: 43,388member
    Quote:
    Originally Posted by DoogH View Post


    eventually Verizon or AT&T will be more powerful and buy the other.



    This. Cannot. Happen.



    If either of them tries, they'll both be split. It's just that simple.
  • Reply 19 of 43
    tbelltbell Posts: 3,146member
    You don't seem to understand how things work. The public owns the airwaves, not any company. The government licenses the right to use those airwaves to the private companies. Consequently, the government is supposed to ensure the airwaves are being used to the public's benefit.



    The written law gives the FCC the power to draft rules and regulations to control the airwaves to the publics benefit.





    Quote:
    Originally Posted by JohnLew View Post


    Yet another chance for the FCC to try to control things outside of the written law.



  • Reply 20 of 43
    old-wizold-wiz Posts: 194member
    Quote:
    Originally Posted by Suddenly Newton View Post


    C'mon. A couple of mil in kickbacks, a few campaign contributions, and they're all set to marry the bride.



    That's obviously what they will do. It all depends on whether or not FCC/Congress is satisfied with the total amounts, be it money, hookers, or drugs.
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