ATandT Complains FCC Improperly Released Staff Report

By Wayne Rash  |  Posted 2011-11-29 Print this article Print


Apparently AT&T is doing this to overcome the opposition of the FCC and perhaps ease the path of the merger itself. However in today's briefing, the FCC made it clear that simple divestiture without satisfying the remainder of the concerns in the staff report is insufficient to get FCC approval for the deal.

The Media Access Project's Andrew Jay Schwartzman said that this deal won't salvage the merger. "It is fanciful to think that Leap would have the resources to buy a large portion of T-Mobile, much less the capital to market itself in new communities," he said. Schwartzman also told eWEEK that it's hard to conceive what Leap would do with T-Mobile assets, since Leap is a prepaid CDMA carrier, while T-Mobile is primarily a post-paid GSM carrier.

Schwartzman also said he is pleased by the FCC's decision to release the staff report, saying that it is important for the public to know what the FCC had spent the public's money on. "AT&T utterly failed to demonstrate that the deal was in the public interest, and the FCC's order will show just why that is," Schwartzman said. "AT&T has built its political campaign for approval on the false notion that buying T-Mobile would somehow create, rather than destroy, jobs. The FCC's evisceration of these claims is especially welcome."

Sprint's Senior Vice President of Government Affairs Vonya McCann joined in praising the FCC's actions today. "The investigation's findings are clear: Approval of AT&T's bid for T-Mobile would lead to higher prices for consumers, eliminate jobs, harm competition and dampen innovation across the wireless industry," McCann said. "These are the same conclusions which led the U.S. Department of Justice and a bipartisan group of attorneys general from seven states and Puerto Rico to sue AT&T, Deutsche Telekom and T-Mobile in federal court in an effort to block the transaction." Sprint is one of the parties involved in the antitrust suit against the merger.

AT&T, however, was not pleased by the release of the staff report. According to a statement by Jim Cicconi, AT&T's senior vice president-External and Legislative Affairs, "The FCC has recognized that it is required by its own rules to dismiss our merger application. This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger," Cicconi complained.

"This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper."

The posting of the staff report is an unusual move by the FCC. At the press briefing, one of the FCC briefers explained that after all of the work, research and analysis, it was important that the public be able to see the results. He also said that this would show AT&T and Deutsche Telekom what is required to gain FCC approval for any merger. Of course, the document makes clear that it may well be impossible to satisfy the FCC, meaning that the continued attempt to complete the merger is pointless. 

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs 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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