At&t Breaks Out The Wallet

It looks as if the AT&T deal to purchase T-Mobile may be more dead than Chumbawambas music career. As first reported in the Wall Street Journal,

U.S. regulators made clear how deep their opposition runs to AT&T Inc.s proposed $39 billion deal to acquire T-Mobile USA, saying AT&T must face an extra review next year that could eat up months even if the company wins an antitrust trial.

The unusual decision by the Federal Communications Commission to call the extra hearingits first such move in nine yearsadds a new roadblock and forces AT&T to consider an unpalatable range of options.

Awesome. I cant stand AT&T. Probably because I used to have a BellSouth mobile phone and then AT&T became the provider. I was always overcharged and customer service was worse than the AOL guys experience. Then the iPhone, aka Jesus Phone came out, and it was only available through AT&T. Phone service with AT&T in Los Angeles might have been just plain bad when this phone was released. With regards to this deal, AT&T was so confident that they would get it done, that they offered a $3Billion dollar break-up fee to T-mobile, plus $3Billion $4Billion in spectrum/other assets if the deal went south. You cocky bastards. So yeah, Im just a little bit turned off by that company, but thats beside the point.
Marguerite Reardon, of CNET writes in her article,

The Department of Justices case against AT&T is scheduled to begin in February. If the court sides with the DOJ and orders an injunction, then the FCCs transfer of the licenses wont mean much since the court will be ordering the companies not to proceed with their merger.

But if AT&T wins its case, AT&T will have some legal basis to fight the FCC in its administrative law judge hearings. The FCC has said that it will wait until the conclusion of the DOJs case against AT&T before it proceeds with its hearings.

Still, AT&T will also be facing other lawsuits seeking to block the merger. If AT&T is able to win all these lawsuits, it will likely have found some strong legal arguments to keep the merger alive. And will therefore have a much stronger case when it needs to provide evidence to the administrative law judge that its merger is in the public interest.

But if AT&T loses at any point along the way, which many believe is a strong possibility, AT&T will also likely lose its case in front of the administrative judge. Still, AT&T could drag out the legal battles if it chooses to fight any lawsuits that it loses.

Most companies, when faced with so much opposition from regulators and the potential for a long and drawn-out legal battle, simply give up. Thats what happened in 2002 when the FCC referred the deal between Echostar and DirecTV to an administrative law judge.

But so far, AT&T has remained steadfast in its resolve to do what it takes to get the merger done. After the Justice Department filed its lawsuit against the merger, AT&T strongly defended its position.

We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court, AT&Ts general counsel Wayne Watts said in a statement the day that the DOJ filed its suit.

Either someone farted, or I smell bull crap. And maybe Im being too harsh on AT&T. Theyve done some things I have liked in recent years. However, one must consider: Anti-Trust laws were put into effect for a reason; when youve got people suing the crap out of you from all angles, perhaps its for a good reason. Just something to ponder.

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