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
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
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.