Bloomberg News

Sprint Urges FCC to Hold Hearings on AT&T-T-Mobile Deal

October 03, 2011

(Updates with excerpt from Sprint letter in third paragraph.)

Oct. 3 (Bloomberg) -- Sprint Nextel Corp. urged the Federal Communications Commission to quickly start hearings before an agency judge to challenge AT&T Inc.’s proposed $39 billion acquisition of T-Mobile USA Inc.

The FCC, which must rule on whether the transfer of spectrum licenses from T-Mobile to AT&T serves the public interest, is still reviewing the proposal after the U.S. Justice Department sued to block it on Aug. 31. Combining the two companies would make AT&T the biggest U.S. wireless carrier.

“The exhaustive record before the commission demonstrates that the takeover would result in substantial harms to consumers, competition, and the public interest and cannot be cured with conditions - it’s unfixable,” Sprint said in a letter posted today on the FCC website.

Sprint’s push for a hearing is part of its effort to strangle the merger, which the company, the third-largest U.S. wireless carrier, asked the commission to block on May 31. The company also filed a separate antitrust lawsuit seeking to stop the acquisition.

Under its statute, if the FCC can’t determine the transaction is in the public interest, it may refer the matter to an administrative judge for hearings that include calling witnesses and presenting evidence. The hearings would result in a recommendation the FCC would vote on. The agency’s decision could be appealed with the U.S. court of appeals in Washington.

The hearing process could take months, said Jeff Silva, a telecommunications policy analyst with Medley Global Advisors, LLC in Washington.

Echostar Application

The last time the FCC designated a merger application for hearing was Echostar Communications Corp’s planned $23 billion purchase of larger U.S. satellite-television rival DirecTV in 2002 -- the first acquisition ever to be turned down by federal communications regulators.

“If you’re AT&T and you want this cleared up quickly, the idea of a lengthy proceeding is like death by a thousand cuts,” Silva said. If the FCC decided to put the transaction before an administrative law judge, “it’s not a good sign for the merger.”

AT&T spokesman Michael Balmoris said in an e-mail that there’s “no legal or policy reason to designate the proceeding for a hearing.”

FCC spokesman Neil Grace declined to comment on the letter.

Dish Network Corp., the second-largest U.S. satellite-TV provider, which is considering buying a wireless carrier or forming a partnership, also urged the FCC to designate the transaction for hearing, according to a separate letter filed on the FCC website Sept. 30. Public interest group Public Knowledge, which also opposes the transaction, asked the FCC to block the transaction in a Sept. 1 letter posted on the FCC website.

--Editors: Fred Strasser, Mary Romano

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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