FCC finds AT&T merger not in public interest, Genachowski issues order to hold trial

FCC chairman Julius Genachowski issued a draft order this morning that calls for a hearing to take the AT&T / T-Mobile merger before an Administrative Law Judge. Such a hearing, reminiscent of the one held for the attempted buyout of DirecTV by EchoStar in 2002, would be held once the Department of Justice's litigation is complete and would certainly be another blockade for AT&T to push through. According to the FCC, the Chairman's order is awaiting final approval from the Commission at a later date, and won't be made public until that time. If the order gets the green light and a hearing is held, it'll be done so like a trial -- one involving cross examination, witnesses, rules of evidence and a good 'ol fashioned two-sided duel.

It's no secret that the FCC has raised concerns over the proposed merger, and pushing this order forward understandably reflects that. In fact, during a conference call with media, the FCC expressed fears that the deal would violate antitrust standards and isn't in the public interest, and the Commission cited records showing it would ultimately result in a loss of jobs, contrary to AT&T's claims. Naturally, this means there's one more hoop for the carrier to go through before it can hope to pick up T-Mobile, and it's a biggie; with the FCC and DoJ holding steadfastly against the acquisition, the GSM carrier's chances of success appear to be slimming significantly. Head past the break to see AT&T and Sprint's reactions to the news.

AT&T's statement:

The FCC's action today is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both. At this time, we are reviewing all options.

Sprint's statement:

As Chairman Genachowski said in August when the Justice Department filed its antitrust lawsuit against AT&T, the record before the FCC presented, "serious concerns about the impact of the proposed transaction on competition." That record is complete and more than justifies moving this matter to an Administrative Law Judge for a hearing. We appreciate Chairman Genachowski's leadership on this issue and look forward to the FCC moving quickly to adopt a strong hearing designation order.