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AT&T threatens to sue the FCC after withdrawing its application to buy T-Mobile USA

Lawyers at the ready
Mon Nov 28 2011, 17:26

AGGRESSIVE TELECOM AT&T has threatened the US Federal Communication Commission (FCC) with legal proceedings if it ignores the company's decision to withdraw its application to buy T-Mobile USA.

AT&T and Deutsche Telekom withdrew their FCC applications last week, leading to speculation that the wheels had finally fallen off the $39bn deal. Now AT&T has threatened the FCC noting that the firms withdrew their applications before the FCC had made any ruling on the purchase and, should the FCC not acknowledge the withdrawals, AT&T would launch legal proceedings against the FCC.

Wayne Watts, AT&T senior EVP and general counsel said, "The FCC's own rules give us this right [to withdraw applications] and provide that the FCC 'will' grant any such withdrawal. Further, this has been the FCC's own consistent interpretation of its rules. We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court."

AT&T's proposed $39bn purchase of T-Mobile USA from Deutsche Telekom has been mired in controversy ever since its announcement. Not only had the FCC expressed concerns and ordered an 'extra review', the US Department of Justice (DoJ) has begun legal proceedings to try to block the purchase, a move so serious that AT&T and Deutsche Telekom have claimed it requires their full attention.

The DoJ regards the combination of AT&T and T-Mobile USA as anti-competitive, and it is easy to see why. In some areas consumers would be left with no choice of wireless provider, a situation that the DoJ had to forcibly break up in the 1980s.

AT&T's tough talk surely will not endear it to the FCC, a government organisation with which all US telecom companies have to work closely. µ


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