UPDATED: Wonder no longer about how the Federal Communications Commission feels regarding AT&T’s (T) attempt to purchase rival T-Mobile USA as the government agency late yesterday released an order in connection to its dismissal of AT&T’s petition at the carrier’s request.
The dismissal followed AT&T’s request to have its application removed from the FCC in order for the carrier to focus its efforts on fighting a Department of Justice lawsuit looking to block the $39 billion transaction.
In the order, the FCC set the tone early by stating that “the record overall does not support a finding that the proposed AT&T/T-Mobile merger would serve the public interest, convenience, and necessity and that the record presents a number of substantial and material questions of fact.”
The order also notes that the FCC found that if approved in its original permutation, the wireless industry’s two largest players, AT&T Mobility and Verizon Wireless, would control 75% of the market and that 99 of the nation’s top 100 markets would lack sufficient competition according to the Herfindahl-Hirschman Index. Omaha, Neb., would be the only market in top 100 to not make the list due to T-Mobile USA currently not owning a network in that market.
The FCC also called into questions facts provided by AT&T in support of the merger as it related to the carrier’s ability to expand coverage of its LTE network and job creation, both topics AT&T pushed heavily in its attempt to justify the proposed deal.
The FCC added that it was releasing AT&T’s application without prejudice, as well as releasing the details of the draft order so as to provide clarity on its decision making process and to provide those that have petitioned the commission with the results of their efforts.
Recent reports have indicated that AT&T was in talks with regional operator Leap Wireless about possibly acquiring some of T-Mobile USA’s assets in order to satisfy government regulators. However, questions have been raised as to whether a cash-strapped Leap would have sufficient funds to purchase enough of those assets or if Leap would even be interested in assets that would fall outside of its current market focus.
AT&T was taken aback by the detail in the order released by the FCC, noting in a statement:
“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. 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 company stated.
This story was updated with a statement from AT&T.
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