AT&T faces T-Mobile battle
By Diane Bartz and Jasmin Melvin |
March 23, 2011, Wednesday
|
Print Edition
Print Edition
AT&T Inc will likely be forced to sell major assets and pledge to expand service to poor areas to get approval from the US government for its US$39 billion deal to buy Deutsche Telekom AG's T-Mobile USA.
Antitrust experts say the merger, which will create the largest US wireless service provider, faces a tough review by competition and communications regulators, but that it will ultimately be approved.
Both the Federal Communications Commission and the Justice Department could force the combined entity to give up assets, such as chunks of US airwaves, known as spectrum, experts said.
The FCC could go further than the DOJ, asking for AT&T to expand wireless service to poor and rural areas, and for service promises.
Both the Senate and House of Representatives Judiciary Committees are expected to hold hearings to discuss it.
Despite these concerns, regulatory experts said they expected the deal to go forward. AT&T has agreed to pay an unusually high breakup fee of US$3 billion and to give T-Mobile wireless airwaves if regulators reject it.
Mergers in industries with expensive infrastructure can be more difficult to approve since it's unlikely new competitors would easily emerge.
"This is a business where there is a lot of infrastructure," said Evan Stewart, an antitrust expert with Zuckerman Spaeder LLP. "I'd be very very surprised if the DOJ antitrust division didn't make this very, very difficult."
Antitrust experts say the merger, which will create the largest US wireless service provider, faces a tough review by competition and communications regulators, but that it will ultimately be approved.
Both the Federal Communications Commission and the Justice Department could force the combined entity to give up assets, such as chunks of US airwaves, known as spectrum, experts said.
The FCC could go further than the DOJ, asking for AT&T to expand wireless service to poor and rural areas, and for service promises.
Both the Senate and House of Representatives Judiciary Committees are expected to hold hearings to discuss it.
Despite these concerns, regulatory experts said they expected the deal to go forward. AT&T has agreed to pay an unusually high breakup fee of US$3 billion and to give T-Mobile wireless airwaves if regulators reject it.
Mergers in industries with expensive infrastructure can be more difficult to approve since it's unlikely new competitors would easily emerge.
"This is a business where there is a lot of infrastructure," said Evan Stewart, an antitrust expert with Zuckerman Spaeder LLP. "I'd be very very surprised if the DOJ antitrust division didn't make this very, very difficult."
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