AT&T and T-Mobile withdraw FCC merger application ~ GoAndroid

Thursday, November 24, 2011

AT&T and T-Mobile have withdrawn their application to the FCC for their planned merger. Following the FCC’s decision to conduct a hearing on the validity of the proposed merger, the two companies have switched their focus to gaining approval from the Department of Justice. AT&T has also indicated it expects to book a pretax $4 billion charge in the fourth quarter for a break-up fee to T-Mobile should the deal fall through.

"This formal step today is being undertaken by both companies to consolidate their strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice," the two companies said in a prepared statement.

The Department of Justice sued to block the merger in August as it believed that the deal posed may violate antitrust laws. The companies believe that they can convince the DOJ that the concessions that they are prepared to offer to make the deal happen will not adversely affect consumers.

Both the DOJ and FCC have contended that the merger is inherently anti-competitive, knocking out a major carrier, and that no amount of concession is likely to change the reduced amount of choice.