FCC to let AT&T pull merger application

Tue Nov 29, 2011 7:29pm EST
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By Jasmin Melvin

WASHINGTON (Reuters) - Communications regulators released a staff report criticizing AT&T Inc's $39 billion plan to purchase T-Mobile USA, even though they agreed on Tuesday to let the companies withdraw their request for approval.

AT&T and T-Mobile USA owner Deutsche Telekom AG said last week they wanted to withdraw their application with the Federal Communications Commission to focus on defending the transaction from an antitrust lawsuit brought by the U.S. Justice Department.

The FCC released on Tuesday an FCC staff report that found the touted benefits of the transaction do not outweigh the competitive disadvantages.

FCC officials cited staff findings that the deal would significantly diminish competition and lead to massive job losses.

The staff report also concluded the merger would not result in significantly more build-out of next generation 4G wireless service than would occur absent the transaction.

AT&T called the FCC's decision to release the report "troubling."

"It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place," said Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs.

He added the report had not been made available to AT&T prior to the public release.   Continued...