After a brutal few months battling Obama administration officials on two fronts, AT&T
The end of an outright merger was clearly telegraphed a week ago, when the two companies and the Justice Department postponed a federal antitrust lawsuit. AT&T had earlier pulled its application from the Federal Communications Commission in the face of opposition from regulators and staff there.
What's a little more unexpected is that AT&T is apparently ditching any sort of alternative deal that could have given the nation's No. 2 wireless carrier access to T-Mobile's assets, particularly wireless spectrum. That was held out as an option last week, when the two companies said they were "actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals."
But today's statement on the deal falling apart paints the breakup as pretty definitive, with AT&T saying that federal officials need to find some other ways to make sure the industry has the spectrum it needs to accommodate the growing hunger for broadband.
"First, in the near term, they should allow the free markets to work so that additional spectrum is available to meet the immediate needs of the U.S. wireless industry, including expeditiously approving our acquisition of unused Qualcomm spectrum currently pending before the FCC," AT&T chairman and CEO Randall Stephenson said in a statement. "Second, policymakers should enact legislation to meet our nation's longer-term spectrum needs."
It should be noted that while AT&T painted the acquisition as mainly about spectrum needs, opponents pointed out the side benefit to AT&T of sweeping a scrappy competitor off the floor. Federal officials, both at the FCC and the Justice Department, said the deal would have concentrated too much power in the industry and made things worse for consumers. Regulators also didn't buy any of the supposed benefits that the companies put forth to soften the blow.
The big question now is what happens to T-Mobile, a business that Deutsche Telekom clearly doesn't want -- or didn't want, anyway. AT&T says it's taking a $4 billion charge to pay for a breakup fee, and will also "enter a mutually beneficial roaming agreement with Deutsche Telekom." Could that make the U.S. carrier an attractive option for Deutsche to continue owning?
There are other partners waiting in the wings, too. Last week, just as the lawsuit was being put on hold, Dish Network's CEO told Bloomberg that his company would be interested in a tie-up with T-Mobile if the AT&T deal fell apart.
More from Xconomy.com:
- FCC Report on AT&T + T-Mo Deal: Sorry, We're Not Buying It
- After Thanksgiving Flareup, AT&T and T-Mobile Endgame Unchanged
- Why All the Churn Around Clearwire? It’s All About the Spectrum
Curt Woodward is senior editor at Xconomy Seattle. Reach me at [email protected]. Get story feeds and more on Twitter @curtwoodward and Facebook on.fb.me/curtwoodward.
