AT&T’s (T) attempt to acquire T-Mobile USA appears to have hit another hurdle today as the Federal Communications Commission has reportedly asked for a hearing on the deal.
The decision follows the U.S. Department of Justice’s filing of a lawsuit in late August to block the proposed $39 billion transaction. The FCC hearing is expected to be conducted after the DoJ lawsuit concludes.
If approved, the deal would remove the nation’s current No. 4 largest operator and propel AT&T Mobility past rival Verizon Wireless as the nation’s largest operator.
In a conference call late yesterday, the FCC seemed to indicate that there were still questions that needed to be resolved and that it doubted many of the claims from AT&T, including benefits for consumers and job creation.
“The FCC’s action today is disappointing,” said Larry Solomon, senior vice president of corporate communications at AT&T. “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. At this time, we are reviewing all options.”
Those opposed to the deal obviously had a different opinion on the matter, with Sprint Nextel seeming to sum up that viewpoint.
“As (FCC Chairman Julius Genachowski) said in August when the Justice Department filed its antitrust lawsuit against AT&T, the record before the FCC presented ‘serious concerns about the impact of the proposed transaction on competition,’ ” said Vonya McCann, senior vice president of government affairs for Sprint Nextel. “That record is complete and more than justifies moving this matter to an administrative law judge for a hearing. We appreciate Chairman Genachowski’s leadership on this issue and look forward to the FCC moving quickly to adopt a strong hearing designation order.”
Wells Fargo Securities noted in a report that the FCC decision could spell trouble for the proposed transaction.
“Clearly this road has become an even longer one for [AT&T] and yesterday’s development is not an ideal one for either [AT&T] or T-Mobile,” the firm noted.
Wells Fargo did add that the FCC decision could spell a long-term benefit for the tower segment, as T-Mobile USA could be forced to beef up its current network in order to compete against its rivals or even look to sell off its roughly 7,000 to 8,000 cell sites.
One positive for AT&T could be the FCC’s comments during a conference call that it would recommend approval for the company’s acquisition of 700 MHz spectrum from Qualcomm, which was originally announced late last year.
Macquarie Equities Research noted that the approval of the AT&T/Qualcomm deal indicates the FCC is open to spectrum transactions that do not involve actual customers, which could open up the current spectrum market. A number of companies are sitting on valuable spectrum portfolios, but do not seem to have any plans to put those assets to use.
The decision follows the U.S. Department of Justice’s filing of a lawsuit in late August to block the proposed $39 billion transaction. The FCC hearing is expected to be conducted after the DoJ lawsuit concludes.
If approved, the deal would remove the nation’s current No. 4 largest operator and propel AT&T Mobility past rival Verizon Wireless as the nation’s largest operator.
In a conference call late yesterday, the FCC seemed to indicate that there were still questions that needed to be resolved and that it doubted many of the claims from AT&T, including benefits for consumers and job creation.
“The FCC’s action today is disappointing,” said Larry Solomon, senior vice president of corporate communications at AT&T. “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. At this time, we are reviewing all options.”
Those opposed to the deal obviously had a different opinion on the matter, with Sprint Nextel seeming to sum up that viewpoint.
“As (FCC Chairman Julius Genachowski) said in August when the Justice Department filed its antitrust lawsuit against AT&T, the record before the FCC presented ‘serious concerns about the impact of the proposed transaction on competition,’ ” said Vonya McCann, senior vice president of government affairs for Sprint Nextel. “That record is complete and more than justifies moving this matter to an administrative law judge for a hearing. We appreciate Chairman Genachowski’s leadership on this issue and look forward to the FCC moving quickly to adopt a strong hearing designation order.”
Wells Fargo Securities noted in a report that the FCC decision could spell trouble for the proposed transaction.
“Clearly this road has become an even longer one for [AT&T] and yesterday’s development is not an ideal one for either [AT&T] or T-Mobile,” the firm noted.
Wells Fargo did add that the FCC decision could spell a long-term benefit for the tower segment, as T-Mobile USA could be forced to beef up its current network in order to compete against its rivals or even look to sell off its roughly 7,000 to 8,000 cell sites.
One positive for AT&T could be the FCC’s comments during a conference call that it would recommend approval for the company’s acquisition of 700 MHz spectrum from Qualcomm, which was originally announced late last year.
Macquarie Equities Research noted that the approval of the AT&T/Qualcomm deal indicates the FCC is open to spectrum transactions that do not involve actual customers, which could open up the current spectrum market. A number of companies are sitting on valuable spectrum portfolios, but do not seem to have any plans to put those assets to use.
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