U.S. Seeks Extended Review of AT&T/T-Mobile Deal
AT&T Inc was dealt a blow on Tuesday as the top U.S. communications regulator sought to have its planned $39 billion purchase of T-Mobile USA sent to an administrative law judge for review.
Federal Communications Commission Chairman Julius Genachowski sent a draft order to his fellow commissioners, citing FCC staff findings that the deal would significantly diminish competition and lead to massive job losses.
The Justice Department went to court in August to oppose AT&T's purchase of T-Mobile from Deutsche Telekom AG on antitrust grounds. A trial in that case is due to begin on Feb. 13.
Any administrative hearing at the FCC, which is charged with evaluating the public interest merits of the deal, would begin after the antitrust trial, an FCC official said.
AT&T called the FCC action ``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 U.S. economy desperately needs both,'' Larry Solomon, a senior vice president of corporate communications, said in an emailed statement.
He added that AT&T was reviewing all its options.
Genachowski's order, which still requires approval by a majority of commissioners, would drag out the review of the deal. AT&T had hoped to close the deal by the first quarter of 2012.
Acquiring T-Mobile would vault No. 2 ranked AT&T into the leading position in the U.S. wireless market. The current industry leader is Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc .
Sprint Nextel Corp , the No. 3 U.S. carrier, and another competitor have also filed a lawsuit to stop AT&T's purchase of T-Mobile, the No. 4 U.S. operator.
AT&T argues the deal will accelerate its expansion of high-speed wireless service to nearly all Americans.
An FCC official said the agency must refer a transaction to the review of an administrative law judge review if the companies involved fail to prove the deal is in the public interest.
The 2002 proposed merger of EchoStar and DirecTV was the last time the FCC sought an administrative hearing on a merger deal. In that case, the companies ultimately scrapped their deal.