The FCC Heads Home for Turkey on a Decisive Note

November 23rd, 2011 by · 2 Comments

Yep, for a few days anyway the FCC’s temporary motto has been less talk, more action.

Yesterday they finally weighed in on the proposed AT&T/T-Mobile merger, having let the DOJ do all the heavy lifting thus far. FCC Chairman Julius Genachowski notified the other three commissioners that he intends to refer the deal to hearing before an administrative judge. AT&T will have to show that the deal is ‘in the public interest’.  This is being considered a blow to AT&T, since the hearing would not happen until after the anti-trust trial in February, and would itself take many months.

AT&T’s Larry Solomon called the action ‘disappointing’, which I think is probably not the word that actually crossed his lips first.  Actually, I’ll go a little bit further and say that it looks to me like this turkey is pretty close to fully cooked. With the FCC piling on, there are enough roadblocks to make it doubtful that AT&T has a viable path forward here, divestments or not.

But actually, the more important action came over the weekend, as the FCC released the full text of its USF and intercarrier compensation reform plan. The quiet rustling you have heard since then is the sound of lawyers and regulatory specialists reading and rereading the fine print. They’re trying to figure out the implications to their businesses, because the effects will be felt across a wide spectrum of companies.

I imagine we will start hearing more detailed responses from the industry after the Thanksgiving holiday.  It is 750 pages long and has thousands of footnotes.  I tried to read it but fell asleep twice, so I’ll have to keep it around as a cure for insomnia.  Bill & keep here we come, eventually, sort of, I think.

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Categories: Government Regulations · Mergers and Acquisitions · Wireless

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2 Comments So Far

  • JH says:

    Rob, I am curious what you think might happen next should the merger not go through. CenturyLink + Tmobile? Sprint + TMbobile? A cable co + Tmbobile (perhaps as a continuing vertical integration of content to access for someone like ComcastNBC)? Or do you think (as i would personally hope as a resident of Seattle, Tmobile US HQ) they might work to revitalise the brand and launch a share offering and spin off from DTelekom…perhaps they could even rename themselves…WESTERN WIRELESS??? Perchance to dream…

    • Rob Powell says:

      Seems obvious that DT lacks the necessary fiber for the job – both metaphorically and physically. I think it depends on whether that breakup fee happens and is as big as it is. That will determine what direction this takes next. But if you’re looking for a white knight, perhaps Vodafone might see an opportunity in this to separate its US wireless fortunes from Verizon for a big pile of cash it could turn back around into T-Mobile and maybe add some spectrum via Clearwire or T-Mobile somehow. Nah, it’ll never happen.

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