Advocacy groups urge FCC to deny AT&T's bid to drop merger application

Consumer advocacy groups Public Knowledge and Media Access Project on Monday urged the Federal Communications Commission (FCC) to deny AT&T's request to withdraw its application to buy T-Mobile, accusing the company of engaging in "litigation gamesmanship." 

The telecom giant announced last week that it would drop its FCC application to focus on fighting the Justice Department's lawsuit against the $39 billion merger. That case is scheduled to go to trial in February. 

FCC Chairman Julius Genachowski told AT&T last week that he would seek an administrative hearing to review the deal. The hearing could take months to complete, and the commission would then vote on whether to block the merger.

AT&T says it has not given up on completing the deal and will re-apply with the FCC.

The company argues the FCC does not have the authority to stop it from withdrawing its application. Wayne Watts, AT&T's general counsel, said his company will sue if the FCC denies its motion.

"We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us," he said in a statement on Friday. "Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”

But in a filing with the FCC, Public Knowledge and Media Access Project argue that allowing AT&T to withdraw its application would harm the public interest. The brief accuses AT&T and T-Mobile of trying to drop their application so they can "seek a favorable decision in federal court, which the companies can then use to pressure the Commission to approve the merge."

The FCC has no obligation to honor AT&T's strategic move, the filing argues.

"This type of litigation gamesmanship wastes the resources of both the Commission and the federal court system," the groups write.

The brief also argues the FCC should release the proposed order that would have sent the issue to an administrative hearing, regardless of whether AT&T withdraws its application. 

"The Commission, as the expert agency in this proceeding, has spent seven months collecting evidence and carefully evaluating whether the proposed transaction will further the public interest," the groups write. "Applicants have made no secret of their desire to short-circuit a true review on the basis of facts via a procedural loophole. But the public deserves for the Commission’s determinations to see the light of day."

On a conference call with reporters last week, FCC officials said they decided to send the merger to an administrative hearing after determining it would stifle competition and lead to massive layoffs.

AT&T has argued the merger would improve wireless service and create jobs as it invests in its network. 

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