Light Reading Mobile has reported on the effects the acquisition could have on 4G build out, the carriers' competitors and the two companies involved. And increasingly, regulators all the way up to the Federal Communications Commission (FCC) are outlining the potential repercussions as well.
One concern being aired this week is that President Obama's plans to make US$27.8 billion from wireless spectrum auctions spanning the next decade will be sidelined if the acquisition goes through, since AT&T believes it can get access to spectrum more quickly than the government can make it available.
Of course, the concern voiced loudest by the duo's smaller competitors is that competition will suffer, causing rural players to go out of business and consumers to pay the price. Credit Suisse told the International Business Times Thursday that it's predicting a Sprint Corp. (NYSE: S)/LightSquared Long Term Evolution (LTE) build partnership within the month.
"So expect a Lightsquared/Sprint/Clearwire deal, then expect AT&T to use it as a justification as to why the T-Mobile deal should go through…see, the sector is fiercely competitive!" Broadband Reports editor Karl Bode Tweeted Thursday.
A House Judiciary subcommittee is expected to hold a hearing by June to study the acquisition's potential effects. Meanwhile, more Attorney Generals are speaking up against it, the latest coming from New York and Connecticut.
Because of the escalating scrutiny, a Strategy Analytics Inc. report predicts the deal will take at least a year and a half to close, which is longer than AT&T's expected 12-month window. The acquisition must pass muster first in the House and Senate, then through state regulatory and Attorney General inquiries, in the Federal Trade Commission , the U.S. Department of Justice and, finally, the FCC.
AT&T, for its part, is not worried about the acquisition passing muster at the regulatory level as AT&T CEO Ralph Stephenson tells Thomson Reuters in the following video:
The FCC is also set to vote today on the roaming rates that big guys like AT&T and Verizon Wireless have to offer to their competitors. CNet notes that this issue will be much more significant when/if AT&T owns more than 80 percent of the market.
Given the terms of AT&T's deal with T-Mobile, including that it must hand over $3 billion and spectrum to T-Mobile if it doesn't pass, the carrier is confident that its acquisition will get through the regulatory roadblocks with ease. But each day brings new challenges to the merger and new voices of dissent. It clearly won't be an open-and-shut case. Read more reasons why below:
- AT&T & T-Mobile's Goliath Crushes the Davids
- AT&T Could Drop 40% of T-Mobile
- Sprint Plans to Fight the AT&T/T-Mobile Deal
- AT&T/T-Mobile: Riddled With Regulatory Risk
- CTIA 2011: AT&T & T-Mobile: Net Neutrality Concerns
— Sarah Reedy, Senior Reporter, Light Reading Mobile