AT&T Withdraws FCC Application for T-Mobile

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AT&T has withdrawn its application with the FCC to buy T-Mobile, marking the likely end of its bid for the Deutsche Telekom owned wireless company, though AT&T said it would re-file with the FCC "as soon as practical," focusing instead on the Justice Department lawsuit against the deal, resolving that in court or "alternate means."

But it also said Thursday that it expected to take an accounting charge of $4 billion in the fourth quarter--$3 billion in cash, $1 billion worth of spectrum--which is the breakup fee it owes T-Mobile if the deal falls through.

AT&T's announcement Thursday morning followed Tuesday's decision by FCC Chairman Julius Genachowski to circulate an order designating the deal for hearing before an FCC administrative law judge with the message that the deal would result in undue concentration and a massive loss of jobs and investment. The FCC can either approve the deal, with or without conditions, or designated it for hearing, so that move was considered all but a death knell for the deal there.

But, at least publicly, AT&T had not given up the fight Thursday. "AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC...." the company said in a statement. 

Public Knowledge President Gigi Sohn pointed out that AT&T's move will prevent the FCC from publicizing its order calling for the hearing, which at the moment is now moot, but suggested it would be delaying the nearly inevitable.

"After today's actions, the chances that AT&T will take over T-Mobile are almost gone. While you can never count out AT&T entirely, the fact that they pulled their FCC application speaks volumes about the company's lack of confidence that it could prove in a legal setting at the Federal Communications Commission (FCC) the claims it spent millions of dollars to make about job creation and rural deployment of broadband, among other issues," she said.

"This turkey is too big to be hidden by releasing it on Thanksgiving. It is an act of desperation which will only hurt their shareholders by delaying the inevitable," saidMedia Access Project President Andrew Schwartzman. " It is time
for vainglorious managers at AT&T to accept that there is no way that this deal can obtain approval of the FCC and the courts."

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