FCC members suggest AT&T, T-Mobile merger should be scrapped

Two left-leaning FCC commissioners slammed AT&T's proposed purchase of T-Mobile on Tuesday and suggested the deal should be scrapped.

FCC commissioners Michael Copps and Mignon Clyburn expressed their views after the Federal Communications Commission's staff released its analysis of the merger on Tuesday. The 109-page staff report concludes AT&T failed to prove its deal would benefit the public.

AT&T withdrew its merger application with the FCC last week to focus on fending off the Justice Department's lawsuit, which challenges the $39 billion deal on antitrust grounds. 

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The company says it plans to re-apply with the FCC.

But Copps, whose term expires at the end of the year, said he hoped AT&T would abandon the deal.

"While I welcome withdrawal of this application, I would like to think we will no longer be expending significant FCC resources to examine this paradigm-shifting and complex transaction," he said in a news release. "I would hope the withdrawal is not a strategic gambit along the road to resubmission of this or a similar application in the months ahead."

Clyburn said she immediately had concerns about the merger of the second and fourth largest wireless carriers, but she tried to keep an open mind about the deal.

She endorsed the findings of the FCC's staff, calling the analysis a "careful and thorough review." She noted the FCC analysts concluded the merger would substantially reduce competition in the wireless market and would likely lead to massive layoffs — not job gains, as AT&T has claimed in ads promoting the deal.

The FCC staff also rejected AT&T's argument that the deal would dramatically improve its wireless network, concluding that AT&T will likely upgrade its wireless technology with or without buying T-Mobile. 

"The staff’s findings suggest the applications appear to substantially lessen competition in ways that no conditions would appear to remedy," she said.

AT&T called the release of the staff report "troubling." 

“This report is not an order of the FCC and has never been voted on," Jim Cicconi, AT&T's vice president of legislative affairs, said in a news release on Tuesday. "It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. ”

Commissioner Robert McDowell, a Republican, did not issue a statement.

FCC Chairman Julius Genachowski released a brief comment, saying only that the agency will focus on promoting competition, investment and job creation if AT&T re-files its application.

AT&T decided to withdraw its application after Genachowski took a step toward blocking the deal last week. He circulated an order with the other commissioners that would have sent the merger to an administrative judge for further review.

There are five seats on the FCC with one currently vacant. President Obama has nominated Republican Ajit Pai and Democrat Jessica Rosenworcel to fill the vacancy and replace retiring Commissioner Copps.

AT&T would need a majority vote of the commissioners to approve its deal.