AT&T Drops Bid for T-Mobile

AT&T said Monday it has scrapped its bid to buy T-Mobile for $39 billion.

That announcement came after the FCC signaled its unwillingness to approve the deal as it was proposed, and the Justice Department's decision to file an antitrust suit to block the deal.

But AT&T did not go quietly, suggesting that the government was hurting consumers and the economy.

"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry," AT&T said in a statement. "It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage.  In the absence of such steps, customers will be harmed and needed investment will be stifled."

FCC Chairman Julius Genachowski defended the FCC's decision on the deal."The FCC is committed to ensuring a competitive mobile marketplace that drives innovation and investment, creates jobs and benefits consumers," he said in a statement. "This deal would have done the opposite."

AT&T said that if the government wanted to free up more spectrum, as it says is a priority, it needed to 1) let the free market address those needs, including allowing it to buy Qualcomm spectrum, which the FCC has signaled it will permit, and 2) approve spectrum incentive auctions legislation.

On that last point, Genachowski was in agreement. "The U.S. mobile industry leads the world in mobile innovation, and we agree with AT&T that Congress should pass incentive auction legislation that will unleash new spectrum for mobile broadband," he said.

The break-up will cost AT&T $4 billion, which it had already signaled it would be taking as a pre-tax accounting charge.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.