No Rubber Stamp for AT&T-T-Mobile Merger, Says FCC Official

AT&Ts proposed $39 billion buy of T-Mobile USA wont be a slam dunk by any stretch if one FCC official is right.

The anonymous official called the regulatory process a steep climb” for the telecommunications giants, saying theres no way the chairmans office rubber-stamps this transaction,” in an interview with the Wall Street Journal. The Commission hasnt begun looking at the deal.

While not addressing the AT&T-T-Mobile merger specifically this week at the CTIA Wireless show in Orlando, FCC Chairman Julius Genachowski said healthy competition is an important focus for his agency because it fuels innovation, better service, lower prices and more. The Justice Department will also weigh in before all is said and done.

The review is expected to take up to a year and might require a number of concessions from AT&T, which is likely to have to give up wireless spectrum in some parts of the country in order to ensure fair competition. The deal would make AT&T the largest wireless company in the U.S. in terms of subscriber numbers, which could approach 130 million.

Early warnings of potential regulatory struggles havent always meant anything in the past. The Journal points out that the merger between Sirius and XM satellite radio in 2007 went through rather easily despite a warning from then-FCC Chairman Kevin Martin about the hurdle [being] high.” But this is a different administration and the Democrats on the panel might be more inclined to put up challenges to a deal that would have a huge impact on the future of the U.S. wireless industry.

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