This was my first thought when I heard the news: Are the feds really going to let this merger go through? It sounds as though I’m not the only person who had that reaction. But then, I still don’t understand how the Comcast/NBC merger went through, either:

The surprising announcement that AT&T Inc. would acquire T-Mobile USA from Deutsche Telekom AG in a $39 billion merger leaves one giant question mark: Will the U.S. government approve an acquisition that most experts thought was unthinkable until recently?

At the very least, most technology, finance and policy experts say the combination of the second and fourth largest providers of U.S wireless service by revenue will face a rocky road as the two companies seek approval from government regulators.

First, AT&T will need the FCC’s approval to acquire T-Mobile’s spectrum licenses.

But the deal is also certain to face a thorough investigation by the Justice Department, according to people familiar with the matter.

The merger is likely to be of particular concern to antitrust enforcers because the industry’s two dominant companies—Verizon Wireless, a joint venture of Vodafone Group PLC and Verizon Communications Inc., and AT&T—are already so far ahead of anyone else, raising the specter of an effective duopoly in mobile telephony.

Antitrust enforcers would likely have taken a more benign view of a potential merger of Sprint Nextel Corp. and T-Mobile USA which would have created a larger third player to compete with the top two providers, those people said.

Herbert Hovenkamp, a law professor at the University of Iowa who specializes in antitrust matters, said the deal would also have a hard time meeting the new merger guidelines recently issued by the Department of Justice.

“It’s a pretty highly concentrated market,” he said. “The guidelines would say this is a highly questionable merger unless there is a significant provable efficiency. This will get fairly close scrutiny.”

3 thoughts on “Merger

  1. Well, how deeply in Obama in AT&T’s pocket? That will be the deciding factor, given Obama et al’s fealty to Big Corporations, especially those that help them get elected.

Comments are closed.