When I blogged about AT&T’s proposed acquision of T-Mobile last August (see: Digital Deja Vu Aug 31), I guess I believed that because AT&T wanted it, it was just going to happen. News this week, however, suggests otherwise. With the FCC’s release of a staff report citing expected huge job losses and stifled competition, the intended merger appears to be in serious doubt. Of course there is also the trial of the Justice Department lawsuit set to begin in February, but even if AT&T were to prevail, they still need the FCC’s permission – which, it seems, they are not going to get. Score a rare one for the little guys.
Just a few weeks ago, I recall hearing a rather matter-of-fact news story that said AT&T was expecting the deal to be delayed until summer. Just optimistic spin, or is their Leadership delusional? The report cites the FCC staff finding that “the applicants’ assertions that the transaction would create jobs in the United States to be inconsistent with AT&T’s internal analyses and record statements concerning cost reductions from the merger.” But AT&T is crying foul, saying they hadn’t had a chance to see the report before it was released and didn’t know this information was in it. Well, that doesn’t mean it wasn’t true. The repercussions of this deal were pretty obvious to anyone who took the time to think about it. I find this an interesting turn in the privacy issues that are making daily headlines. Consumer information seems fair game, but AT&T wants these findings, which have true bearing on public good, kept quiet.
I wonder how policy makers, and especially the current ultra pro-business Congress will react. Truly a merger with potential public impact of this significance is somewhat rare, but will the implications reverberate to other players? other sectors? AT&T had been holding out some hope that by selling some of its assets and T-Mobile subscribers to 2nd tier telecomm player Leap, they could somehow look like they’re not the mega-monopoly they would be from acquiring T-Mobile. What if I’m a T-Mobile customer and don’t want to be sold? What about the sanctity of those 2-year calling plans? Apparently this deal is a last ditch effort to appease the DoJ, but with the FCC’s action, it may all be moot.
Of course the heart of the issue is spectrum – how to get more of what enables the mobile growth engine, which is in increasingly short supply. It is definitely time for regulatory action on bandwidth. Maybe Light Squared is going to come out a winner after all…?