The Federal Communications Commission Tuesday accepted AT&T/T-Mobile's withdrawal of its merger application, but was also taking the opportunity to publish a 109-page staff report detailing why it had concluded the deal had not met the commission's public interest threshold and why there were still unanswered and material questions of facts related to the merger.
While AT&T has argued that the FCC's authority over the application ended when they withdrew it last week, FCC officials speaking to reporters on background Tuesday said that it was not self-executing and that the commission was required to act on the request.
The officials said making that 109-page staff report public was something it had planned to do anyway as part of an order designating the merger for hearing before an FCC judge, which chairman Julius Genachowski's circulated last week. That designation was the chairman's way of saying the deal had not met that public-interest/material questions threshold and the commission opposed the merger. It was after AT&T and T-Mobile parent Deutsche Telekom learned of that draft proposal that they withdrew the application, saying they might refile it at a later date.
One FCC official suggested that publishing the order could benefit AT&T and T-Mobile by giving them insight on just what it found wrong with the deal and how they might fashion remedies. But it will also be available as fodder for Justice Department lawyers, who have separately taken the proposed merger to court to block it on antitrust grounds.
While the FCC said it was within its rights, and even had an obligation after months of review, to release the report detailing its thinking, AT&T was not assuaged.
"The FCC has recognized that it is required by its own rules to dismiss our merger application," the company said in a statement. "This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger. This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper."
Among the reports conclusions are that AT&T could not support its claims that the merger would create jobs, or that it would not be building out 4G wireless to 97% of the country absent the deal.
The FCC will keep the AT&T/T-Mobile docket open, both to require ex parte filings for any continuing conversations with commissioners or staffers about the deal and, said one of the FCC officials, to make it easier to restart the proceedings if AT&T refiles its application.