AT&T’s day in court not guaranteed

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AT&T’s (T) attempt to focus its legal efforts on fighting a single battle against the government as it tries to acquire T-Mobile USA seems to have hit a snag as the judge overseeing the case expressed concern as to whether the court should even hear the proceedings following AT&T’s successful removal of its application from the Federal Communications Commission.

Late last week, U.S. District Judge Ellen Huvelle reportedly said she was concerned that AT&T had removed the deal from the FCC, noting that AT&T could then submit an altered proposal from what was currently in front of the courts. The court has a hearing on the matter scheduled for Dec. 15.

Reports indicate that the Department of Justice, which originally expressed plans to fight the deal in late August, will ask that the case now be pushed off as the deal is basically dead without gaining FCC approval.

“We have reason to believe lead DoJ antitrust attorney Joseph Wayland will next week request AT&T/T-Mobile court proceedings be put on hold,” said Jeffrey Silva, senior policy director of telecommunications, media and technology, in a report late last week. “He may go even further and seek to withdraw the government’s case until AT&T resubmits a new merger application with the FCC. We regard this morning’s development as making even more unlikely the outside possibility of AT&T leveraging a successful outcome in litigation to subsequently win FCC regulatory approval. Deutsche Telekom could face particularly acute pressure to decide soon whether it can withstand potentially open-ended delay and uncertainty with respect to T-Mobile.”

AT&T asked the FCC to excuse the deal last month in order to battle the DoJ lawsuit filed against the deal. The FCC eventually did dismiss the proposal, but not before releasing a scathing report citing why it felt the deal should not be approved in its current form.

By having the deal completely remanded, it appears unlikely that AT&T would be able to have a new proposal approved in time for a previously stated September 2012, deadline that would allow either AT&T or T-Mobile USA to walk away from the deal and triggering an expensive exit clause. That clause would force AT&T to hand over $3 billion in cash, a hoard of 1.7/2.1 GHz spectrum and a nationwide data roaming agreement to T-Mobile USA.

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Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
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Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”

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