AT&T Spars With F.C.C. Over Withdrawal of T-Mobile Deal


Nothing is easy when it comes to AT&T‘s proposed $39 billion takeover of T-Mobile USA — apparently not even when it comes to withdrawing the deal from the government approval process.

AT&T’s top internal lawyer, Wayne Watts, said in a statement on Friday that the company should be allowed to withdraw the deal from consideration by the Federal Communications Commission without permission from the regulator.
Because AT&T withdrew its application for approval before F.C.C. commissioners voted on a proposal by the agency’s chairman, Julius Genachowski, earlier in the week to move the case to an administrative law judge, the company should be allowed to pull its submission, Mr. Watts said.
 Interactive Timeline: AT&T’s Merger With T-MobileAT&T withdrew its application for approval in the early morning hours of Thanksgiving, but said it planned to resubmit the deal for the agency’s consideration at a later date.
The F.C.C. has indicated that its options include granting AT&T’s withdrawal, but potentially with prejudice, meaning that the company could not refile for approval later, or moving ahead with the administrative law case.
“We have every right to withdraw our merger from the F.C.C., and the F.C.C. has no right to stop us,” he said. “Any suggestion the agency might do otherwise would be an abuse of procedure, which we would immediately challenge in court.”
An F.C.C. representative was not immediately available for comment on Friday evening.
The statement highlights AT&T’s growing combativeness as the T-Mobile deal founders amid government
opposition. The F.C.C.’s push to hold a hearing on the deal follows a lawsuit by the Justice Department and several state attorneys general seeking to block the transaction.
AT&T announced on Thursday that it planned to record a $4 billion charge in its fourth quarter in case the deal collapsed, the company’s biggest acknowledgment yet that the merger was in peril. The charge would cover a majority of a breakup fee owed to T-Mobile’s parent company, Deutsche Telekom, if the transaction fell apart because of regulatory opposition.
Yet the withdrawal of its F.C.C. application signals a hail-Mary legal strategy. AT&T is hoping to settle the Justice Department’s claim — or win in court — and use that victory to strong-arm the F.C.C. into approving the merger.
AT&T is still exploring ways to settle with the Justice Department, including by selling off assets. But the company has indicated that it is also prepared to do battle in Federal District Court in Washington, D.C., when that trial begins in February.