Sixteen in the clip and one in the hole
The DOJ is about to make some bodies turn cold
Now they droppin' and yellin'
It's a tad bit late
The DOJ and Julius G had to regulate.
-- "Regulators," by Nate Dogg and Warren G, slightly adapted
The Feds really don't like this deal. After the Department of Justice filed an antitrust suit to block the proposed AT&T
Might not sound like much, but this review is a rarely used and very powerful weapon. The last time the FCC pulled this trigger, the 2002 merger between DirecTV
What are we fighting for?
Ma Bell doesn't like this new roadblock at all. Company spokesman Larry Solomon said that the FCC's move was disappointing. "It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs," he said.
But that's actually one of the sticking points. The DOJ and FCC don't think that combining two of the nation's four largest mobile networks would create jobs and stimulate competition, but quite the opposite. "AT&T's acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws," Genachowski said in support of the DOJ suit.
Importantly, the FCC believes that the merger would destroy jobs. Ultimately, both sides could be correct. AT&T has promised to move call center jobs back to the U.S. if the merger goes through, but you can bet your shiny metal smartphone that the company would slash thousands of engineers, managers, and other higher-paid positions in the name of efficiency. Happens in every merger, doesn't it?
So we'd end up with fewer high-quality jobs and more call center jobs. I don't think AT&T-Mobile would benefit the economy at large.
Voices in the crowd
Prepaid mobile operator Leap Wireless
But AT&T isn't entirely friendless. MetroPCS Communications
Genachowski's hearings may not kill the deal outright. At the very least, they add another few months to the already lengthy process. It's either a deal buster or a filibuster.
Let's take a stand, people!
At $39 billion, T-Mobile USA is a blockbuster of a merger target. It's looking increasingly likely that Genachowski and others will be able to derail the deal, which means no cost-cutting efficiencies for AT&T, the company would need to write those reparation checks, and then management needs to find other ways to compete and innovate.
I don't do a lot of negative CAPS calls, but will make an exception here. Ma Bell gets a big, red thumbs-down vote from this All-Star CAPS player as I expect the merger to fall through. There are a lot of strings attached, and it'll hurt more than the market seems to believe right now.
Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.