AT&T withdraws FCC application for big merger with T-Mobile

By withdrawing its application, AT&T triggers a $4 billion breakup fee that it had agreed to pay to T-Mobile’s parent company, Deutsche Telekom. The fee is $3 billion in cash and $1 billion in spectrum assets.

“AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending before the United States District Court for the District of Columbia … or alternate means,” AT&T said in its release. “As soon as [is] practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval.”

But consumer advocacy groups that oppose the deal said the move shows AT&T has all but given up on buying T-Mobile.

Gigi Sohn, president of advocacy group Public Knowledge, said AT&T’s chances of completing the deal are “almost gone.”

Andrew Schwartzman, policy director of law firm Media Access Project, called the withdrawal of the application an “act of desperation.”