AT&T's last-ditch effort to save T-mobile deal
(CBS) - AT&T just can't quit T-mobile.
On Thanksgiving morning, AT&T and Deutsche Telekom withdrew a request to the Federal Communications Commission to transfer T-mobile's wireless spectrum license to AT&T. While the move seemed like it would end the merger, neither companies admitted defeat.
"Deutsche Telekom and AT&T vowed Thursday to press ahead with the planned sale of the German company's T-Mobile USA unit to the U.S. cell phone operator despite concerns raised by American authorities," reported the Associated Press.
The telecommunications giant is making a last-ditch effort to save the merger. Andrew Ross Sorkin of the New York Times reported, "AT&T has been secretly working on an audacious 11th-hour deal to salvage the transaction: AT&T is knee-deep in talks with Leap Wireless, a second-tier but growing wireless player, to sell it a big piece of T-Mobile's customer accounts and some of its wireless spectrum, according to people involved in the negotiations."
If the sale is successful, Leap would knock T-mobile down to become the fourth largest wireless carrier in the U.S.
These developments are the latest in series of obstacles the merger has faced. The Department of Justice filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia against AT&T to block the acquisition of T-Mobile in August.
AT&T and Deutsche Telekom will press ahead with T-mobile deal
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AT&T's battle to save T-Mobile deal
A press release by the Department of Justice stated: "the proposed $39 billion transaction would substantially lessen competition for mobile wireless telecommunications services across the United States, resulting in higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives."
"Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition," said Deputy Attorney General James M. Cole.
America's disenchantment with corporations could be another factor in AT&T's trouble getting past regulations. Business Week speculates that the FCC's resistance to the merger "may signal tougher enforcement of corporate mergers by the Obama administration."
"The Obama administration has gotten much more aggressive in antitrust than the Bush administration was," antitrust litigator Jeffrey Jacobvitz told Business Week.
If the merger fails, AT&T will have to pay Deutsche Telekom a $4 billion "breakup fee."
AT&T is one of the largest communications company in the world and second largest mobile wireless provider in the U.S. Verizon Wireless tops the list, while Sprint and T-Mobile come in third and fourth place.
