ATandT-T-Mobile Merger Faces Long, Difficult Antitrust Review
News Analysis: AT&T may think the T-Mobile purchase is a done deal. But regulatory reviews by the Federal Communications Commission and the U.S. Department of Justice along with objections from competing carrier Sprint could at least delay the closing for a year or more.
When AT&T announced that it was buying T-Mobile a couple of weeks ago, it was presented as if the deal were a fait accompli. Deutsche Telekom gave the same impression when it made its own announcement. There was a reason for this apparent certainty. It's good for share prices. You'll note that the markets treated AT&T and DT favorably as a result.
But the bravado of the announcement doesn't reflect reality. AT&T has already suggested that getting regulatory approval will take a year. The reason it will take a year isn't because the bureaucracy is slow. It's because AT&T correctly expects there will be significant opposition to the proposed merger. If you read the comments to my previous column on this topic, you'll see one source of that opposition, T-Mobile customers.
But objections by outraged T-Mobile customers won't be the decisive factor that the FCC and the Department of Justice will be looking at when they consider the merger. The major issue they'll examine is how it will affect the future of competition in the wireless industry. If it looks like AT&T's proposed purchase of T-Mobile will concentrate too much power in one company, the government can refuse to allow it. The government can also require AT&T to divest large portions of T-Mobile before the deal can go forward.
But this is not to say that outraged users don't have a voice. In fact they do. In addition to writing comments to columns like mine expressing why they're outraged, they also need to let the government know. As I've mentioned before, each of the agencies involved is required to hold public hearings and to receive public comments in regards to the merger. Anyone can provide input to the hearings and you don't have to attend. You can send comments to the FCC and the DoJ when they open the public comment period, and you can do it over the Internet.
In addition, if you're opposed to the merger, as it appears that almost all of those who write to me are, you can take other steps. One is to provide support to Sprint's opposition to the merger. Sprint Nextel CEO Dan Hesse has already announced that Sprint will oppose the merger. Writing to let Hesse and Sprint know that you welcome their opposition will encourage them to continue.
It's worth noting that Sprint is perhaps in the best position of any private interest to have an effect on the outcome. It's already a big company; Sprint has strong, positive name recognition; and it has a lot to lose if the merger goes through.