AT&T Announces $39B Deal To Acquire T-Mobile

FCC, House of Representatives, Media ownership, Mobile Broadband, Spectrum, Wireless March 21st, 2011

, Managing Editor, BroadbandBreakfast.com

WASHINGTON, March 21, 2011 – Nationwide wireless carrier, AT&T announced Sunday that it had finalized an agreement to acquire competitor T-Mobile from Deutsche Telekom for $39 billion in cash and stock.

The deal between the nation’s second- and fourth-largest carriers would likely create the largest nationwide wireless carrier, topping current leader, Verizon.

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO through a statement Sunday. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more.”

AT&T touted the projected benefits of the acquisition in its press release, from helping achieve President Obama’s high-speed wireless deployment goals to helping alleviate an impending spectrum crunch. Monday morning, however, is certain to bring industry and government questions regarding the transaction’s effect on competition in one of the nation’s most highly concentrated industries.

Rep. Anna Eshoo (D-CA), ranking member of the House Subcommittee on Communications and Technology, released a statement Sunday evening, portending competition questions that are certain to be asked in the coming weeks and months.

“Competition is essential to promoting a vibrant wireless market, where consumers have a choice in the innovative services and devices available to them,” said Eshoo. “As the FCC and DOJ begin their regulatory and antitrust review, I urge them to carefully examine the proposed transaction.”

Industry watchdog, Public Knowledge, also released a statement shortly after the announcement, condemning the consolidation from four major carriers in the market to three “unthinkable.”

“The fact that AT&T and T-Mobile would even think of such a combination shows how desperately the U.S. needs both strong network neutrality rules and a competition policy that requires dominant broadband providers to make their networks available to competitors,” said Gigi Sohn, president and co-founder of Public Knowledge.

Before the acquisition is finalized, the Federal Communications Commission and the Department of Justice will conduct a regulatory and antitrust review of the transaction. The FCC’s standard of review for whether to give the transaction the go-ahead will depend on whether it determines it is in the best interest of the public. The Commission has taken up to a year to pass on similar mergers.

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