AT&T Faces FCC Hearing on T-Mobile Merger

By Josh Long

Federal Communications Commission Chairman Julius Genachowski reportedly will seek an administrative hearing on AT&T’s acquisition of T-Mobile USA.

Such a hearing would add another potential roadblock to a $39 billion deal that already is facing lawsuits in Washington, D.C., including an antitrust case that the U.S. Department of Justice has filed in order to block the merger.

An unidentified source told The Wall Street Journal that the FCC’s hearing would take place at the conclusion of the Justice Department’s antitrust trial, which is currently set for February.

Such a process at the FCC could take a year or more, Stifel Nicolaus analyst Christopher King wrote today in a research note, explaining that an administrative law judge would make a recommendation as to the merger before the issue went before the entire commission.

“The FCC chairman would need an FCC commissioner majority to seek an administrative hearing,” the analyst said, “but we would think he would have checked with his three colleagues as to their views.”

The agency is in the midst of change. FCC Commissioner Michael Copps is scheduled to step down from his post when Congress breaks for the year, and two FCC commissioner nominations are currently pending in the U.S. Senate, King noted. The five-member agency currently has one vacant post thanks to the departure earlier this year of Meredith Attwell Baker, a Republican who now works for Comcast Corp. as senior vice president of government affairs, NBCUniversal. Jessica Rosenworcel and Ajit Varadaraj Pai, two lawyers who worked for the FCC, have been tapped by President Obama to serve as new commissioners at the agency.

Dallas-based AT&T cannot acquire Bellevue, Wash.-based T-Mobile USA unless the FCC finds that the merger is the public interest, convenience and necessity. The Justice Department claims the merger would burden tens of millions of consumers with fewer choices, higher prices and lower-quality products for wireless services.

“The FCC’s action today is disappointing,” AT&T’s Larry Solomon, senior vice president of corporate communications, told Mashable. “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 at a time when the US economy desperately needs both. At this time, we are reviewing all options.”