FCC Set to Oppose AT&T T-Mobile Acquisition

AT&T's proposed $39 billion deal to acquire T-Mobile could be in trouble if a draft FCC order is approved.

FCC Chairman Julius Genachowski circulated a draft order this week that opposes the acquisition. Genachowski is recommending that the acquisition be reviewed by an administrative law judge that could potentially block the deal. The draft FCC order will be reviewed in early December, in a meeting of all FCC commissioners to vote on official approval of the order.

The move by the FCC follows a U.S. Department of Justice action at the end of August to also block the proposed merger.

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services,” said Deputy Attorney General James M. Cole in a statement.

The U.S Government actions to block the merger have also been applauded by rival Sprint. Sprint has been a vocal opponent of the deal since it was first announced in March.

"As Chairman Genachowski said in August when the Justice Department filed its antitrust lawsuit against AT&T, the record before the FCC presented, 'serious concerns about the impact of the proposed transaction on competition.' Vonya McCann, Sprint’s Senior Vice President of Government Affairs said in a statement emailed to InternetNews.com. "That record is complete and more than justifies moving this matter to an Administrative Law Judge for a hearing."

McCann added that Spint appreciates Chairman Genachowski’s leadership on this issue and they look forward to the FCC moving quickly to adopt a strong hearing designation order.

While Sprint, the FCC and the Department of Justice oppose the deal, the Communications Workers of America union is in favor of the deal going through. In a statement, the Communications Workers of America said that the FCC's actions on the AT&T/T-Mobile merger are a potential job killer.

"Our T-Mobile members know that the path to secure jobs is through massive investment in a 4-G LTE network across America," The Communications Workers of America stated. "T-Mobile management has clearly stated that the company doesn't have the scale to justify that investment."

The union went on to note that AT&T has officially pledged to retain 23,000 staff as part of the merger as well as bringing in up to 5,000 new jobs to the U.S.

AT&T did not respond to a request for comment from InternetNews.com by press time.

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