AT&T/T-Mobile merger “not of public interest” says FCC

AT&T has admitted that it has set aside $4bn to cover a potential charge to cover the breakup fee and cost of assets to be paid to T-Mobile parent Deutsche Telekom if the merger deal falls through

The US Federal Communications Commission (FCC) has said that AT&T must face an extra review next year, putting a significant hurdle in the way of its planned merger with T-Mobile USA.

FCC chairman Julius Genachowski told reporters in the US that letting AT&T acquire T-Mobile USA is “not in the public interest” and that if approved, “thousands of jobs will be lost in the aftermath”.

He has therefore proposed an administrative hearing take place, which would require AT&T to present its case before an administrative law judge. The FCC would also present its own findings at the hearing.

The call for an extra hearing is unusual – it is its first such move in nine years, and a review is still pending approval by other FCC commissioners. However, if the administrative hearing takes place, it could delay the proposed $39bn merger by months.

Larry Solomon, senior vice president of corporate communications at AT&T, responded to the FCC’s action today, saying that it is disappointing.

“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both,” he said, adding: “At this time, we are reviewing all options.”

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