The Federal Communications Commission officially kicked off its review of AT&T's $39 billion deal to buy T-Mobile on Thursday. The regulator jump-started what is bound to be a complicated process by issuing a public notice before the two companies had even filed their applications; the FCC does this for large, complicated deals like this one so that it can get a head start.
The public notice starts the clock on a 180-day review process, which the FCC can stop midstream at its discretion. It also lays out the legal framework for ex parte discussions related to the merger.
Before AT&T can take over T-Mobile, the sale must be approved by both the FCC and the Department of Justice. That process is likely to take at least a year, the companies said when the deal was announced last month. In a conference call with the press, FCC senior officials said they would coordinate with the DOJ, as they did with the recently completed review of the Comcast and NBC Universal deal.
While the DOJ focuses on the antitrust implications, the FCC will examine whether or not the transaction is in the public interest, a much more fuzzy determination that allows the FCC to look at a number of competitive issues, from how many players are in a market to consumer pricing. The FCC will also look at the broader question of how the transaction might affect future competition in wireless markets, whether it might encourage the development of new or advanced services, and whether the deal is consistent with the FCC's spectrum management goals.
As has been the case with many of these blockbuster deals recently, like Comcast/NBC Universal, NBC Universal, the FCC is likely to impose conditions that AT&T must meet in order to get approval. The conditions can address harms that the FCC identifies or increase the benefits of the transaction, the senior FCC officials said.
With Republicans in control of the House, the FCC's review process, which critics say takes too long and imposes conditions that set de facto public policy, will be under a microscope. Earlier this week, two House Republicans who control powerful subcommittees called for hearings on FCC reform that will take up both issues.