AT&T Withdraws Bid for T-Mobile

AT&T will not be acquiring T-Mobile after all.

The $39 billion deal was originally announced back in March and was initially expect to close within 12 months.

From the outset, the deal faced opposition from other carriers including Sprint, though the toughest hurdle turned out to be the U.S. Government, by way of the FCC and the Department of Justice.

"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry," AT&T said in a statement. "It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. "

AT&T warned that in the absence of such steps, customers will be harmed and needed investment will be stifled.

The Department of Justice made its opposition to the proposed merger public in August arguing that the deal would stifle competition. In November, the deal hit its second major road bump as the FCC made its move to oppose the deal. On Thanksgiving weekend, AT&T and T-Mobile announced that they would be pulling their application at the FCC to instead focus on winning over the Justice Department. At the time, the two wireless carriers stated that they still planned to pursue the merger.

The breakup will cost AT&T $4 billion that they will take as a charge in their fourth quarter. There will now also be a new roaming agreement between the two companies networks.

AT&T CEO Randall Stephenson said that his company will continue to invest in their network to add capacity.

"However, adding capacity to meet these needs will require policymakers to do two things," Stephenson said in a statement. "First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC."

Stephenson added that policymakers should also enact legislation to meet the longer-term spectrum needs of the U.S.

"The mobile Internet is a dynamic industry that can be a critical driver in restoring American economic growth and job creation, but only if companies are allowed to react quickly to customer needs and market forces," Stephenson stated.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals.