ATandT's Failed T-Mobile Bid Has Opponents Rejoicing

By Wayne Rash  |  Posted 2011-12-19 Print this article Print

NEWS ANALYSIS: AT&T has failed in its $39 billion effort to buy T-Mobile from Deutsche Telekom. It is a rare failure for AT&T and a big victory for many public interest groups.

AT&T (NYSE:T) and Deutsche Telekom have decided to drop plans to sell T-Mobile USA to AT&T for $39 billion. In a Dec. 19 statement released today, AT&T said that the companies have dropped their acquisition. In its statement, AT&T blamed the efforts of the Federal Communications Commission and the U.S. Department of Justice for the failure of the merger, and said that the failure of the transaction doesn't change the realities of the country's wireless industry.

AT&T claimed that the takeover of T-Mobile would have ensured that the company had the spectrum it needed, apparently in contrast to the means that Verizon Wireless used to acquire spectrum for far less money by simply buying it from companies that didn't have plans to use it

The word of the failed merger caught opponents by surprise, since most were waiting for the scheduled Jan. 18 hearing in federal court for the merger to be abandoned.

"This has been clearly the way things were going since Thanksgiving when the FCC had announced they were putting this out as a hearing," said Public Knowledge Legal Director Harold Feld in an interview with eWEEK. "It was almost a certainty last week when [Judge Ellen Huvelle] expressed such skepticism. It's a good thing that the companies finally realized that this wasn't going to happen.

Public Knowledge has been a leading organization in fighting the merger.

Meanwhile, other public interest groups were adding their thoughts.

"This deal has been as good as dead for months because the facts never matched AT&T's fabrications about the benefits of the merger," Free Press President and CEO Craig Aaron wrote in a statement.

"As the public, the Justice Department and the FCC long ago recognized-and now even AT&T must admit-this deal would have only meant higher prices, fewer choices and tens of thousands of lost American jobs," Aaron added. "Good riddance. The Obama administration deserves praise and credit for standing up to AT&T's relentless lobbying and propaganda. And the American public can breathe a sigh of relief that this time the public interest trumped AT&T's self-serving attempt to kill off what little competition remains in the wireless market."

Feld also credited the FCC, the DOJ and the Obama administration.

"I think that the important thing here is that the American people can see that the FCC and the Department of Justice are capable of standing up when the moment requires, I think the Obama administration deserves credit for standing up to AT&T's lobbying machine on this," said Feld.

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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