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Possible AT&T Concessions to Save Its Merger with T-Mobile

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WASHINGTON, December 5, 2011 – With its proposed merger facing roadblocks on two fronts, AT&T has withdrawn its Federal Communications Commission application in order to focus on the Department of Justice’s antitrust suit.

One of the ways that AT&T may try to gain the DOJ’s approval would be to sell off parts of the company it is attempting to acquire, T-Mobile.  This sale would be in response to the DOJ’s assertion that the merger, as proposed, would severely decrease competition in the wireless market.

Some experts have speculated that AT&T will try to sell up to 40% of T-Mobile.  T-Mobile has both customers and spectrum that it could sell, presumably to smaller, non-Verizon carriers.  However, this sale would have to gain DOJ approval as well.

If AT&T does sell off some of T-Mobile’s assets, it would be defeating the purpose of its merger, to increase its customer base and gain valuable spectrum for further 4G rollout, the latter being the bigger blow to AT&T’s ability to compete with Verizon.  If AT&T went through with this plan, it would likely improve its chances of DOJ approval, but not significantly.

Should AT&T fail to complete the merger it would owe Deutsche Telekom, T-Mobile’s parent company $4 billion in break up fees, $3 billion in cash and $1 billion in spectrum. AT&T notified the Securities and Exchange Commission that if it were to take this $4 billion dollar hit, it would occur in the fourth quarter.

Editor’s Note: This story has been updated from the week of November 28.

Education

FCC Chairwoman Jessica Rosenworcel Unveils Proposed Rules for Emergency Connectivity Fund

Acting FCC Chairwoman Jessica Rosenworcel on Friday released rules for the Emergency Connectivity Fund, answering many questions about the program.

Benjamin Kahn

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Photo of Jessica Rosenworcel from the FCC

WASHINGTON, December 5, 2011 – With its proposed merger facing roadblocks on two fronts, AT&T has withdrawn its Federal Communications Commission application in order to focus on the Department of Justice’s antitrust suit.

One of the ways that AT&T may try to gain the DOJ’s approval would be to sell off parts of the company it is attempting to acquire, T-Mobile.  This sale would be in response to the DOJ’s assertion that the merger, as proposed, would severely decrease competition in the wireless market.

Some experts have speculated that AT&T will try to sell up to 40% of T-Mobile.  T-Mobile has both customers and spectrum that it could sell, presumably to smaller, non-Verizon carriers.  However, this sale would have to gain DOJ approval as well.

If AT&T does sell off some of T-Mobile’s assets, it would be defeating the purpose of its merger, to increase its customer base and gain valuable spectrum for further 4G rollout, the latter being the bigger blow to AT&T’s ability to compete with Verizon.  If AT&T went through with this plan, it would likely improve its chances of DOJ approval, but not significantly.

Should AT&T fail to complete the merger it would owe Deutsche Telekom, T-Mobile’s parent company $4 billion in break up fees, $3 billion in cash and $1 billion in spectrum. AT&T notified the Securities and Exchange Commission that if it were to take this $4 billion dollar hit, it would occur in the fourth quarter.

Editor’s Note: This story has been updated from the week of November 28.

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FCC

Rosenworcel Says Anti-Muni Network Legislation Unfair, Hopes States Change Their Tune

FCC acting chairwoman Jessica Rosenworcel said she hopes state legislatures change stance on muni builds.

Benjamin Kahn

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WASHINGTON, December 5, 2011 – With its proposed merger facing roadblocks on two fronts, AT&T has withdrawn its Federal Communications Commission application in order to focus on the Department of Justice’s antitrust suit.

One of the ways that AT&T may try to gain the DOJ’s approval would be to sell off parts of the company it is attempting to acquire, T-Mobile.  This sale would be in response to the DOJ’s assertion that the merger, as proposed, would severely decrease competition in the wireless market.

Some experts have speculated that AT&T will try to sell up to 40% of T-Mobile.  T-Mobile has both customers and spectrum that it could sell, presumably to smaller, non-Verizon carriers.  However, this sale would have to gain DOJ approval as well.

If AT&T does sell off some of T-Mobile’s assets, it would be defeating the purpose of its merger, to increase its customer base and gain valuable spectrum for further 4G rollout, the latter being the bigger blow to AT&T’s ability to compete with Verizon.  If AT&T went through with this plan, it would likely improve its chances of DOJ approval, but not significantly.

Should AT&T fail to complete the merger it would owe Deutsche Telekom, T-Mobile’s parent company $4 billion in break up fees, $3 billion in cash and $1 billion in spectrum. AT&T notified the Securities and Exchange Commission that if it were to take this $4 billion dollar hit, it would occur in the fourth quarter.

Editor’s Note: This story has been updated from the week of November 28.

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Broadband's Impact

FCC Fines Company $4.1 Million for Slamming and Cramming Consumer Phone Lines

The Federal Communications Commission on Thursday fined Tele Circuit Network Corporation for switching consumers’ service providers.

Benjamin Kahn

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on

Photo of Geoffrey Starks by Amelia Holowaty Krales of the Verge

WASHINGTON, December 5, 2011 – With its proposed merger facing roadblocks on two fronts, AT&T has withdrawn its Federal Communications Commission application in order to focus on the Department of Justice’s antitrust suit.

One of the ways that AT&T may try to gain the DOJ’s approval would be to sell off parts of the company it is attempting to acquire, T-Mobile.  This sale would be in response to the DOJ’s assertion that the merger, as proposed, would severely decrease competition in the wireless market.

Some experts have speculated that AT&T will try to sell up to 40% of T-Mobile.  T-Mobile has both customers and spectrum that it could sell, presumably to smaller, non-Verizon carriers.  However, this sale would have to gain DOJ approval as well.

If AT&T does sell off some of T-Mobile’s assets, it would be defeating the purpose of its merger, to increase its customer base and gain valuable spectrum for further 4G rollout, the latter being the bigger blow to AT&T’s ability to compete with Verizon.  If AT&T went through with this plan, it would likely improve its chances of DOJ approval, but not significantly.

Should AT&T fail to complete the merger it would owe Deutsche Telekom, T-Mobile’s parent company $4 billion in break up fees, $3 billion in cash and $1 billion in spectrum. AT&T notified the Securities and Exchange Commission that if it were to take this $4 billion dollar hit, it would occur in the fourth quarter.

Editor’s Note: This story has been updated from the week of November 28.

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