A New Speedbump in Road to AT&T, T-Mobile Approval

Public interest groups ask FCC to consider two deals together

One way to kill AT&T's $39 billion deal to acquire T-Mobile is to make AT&T, which will become the country's clear number one wireless provider when the deal closes, look even bigger and badder. In an attempt to do just that, five public interest groups joined together to fire off a letter to the Federal Communications Commission Wednesday, in which they ask that the regulator combine its review of the T-Mobile deal with a separate review of AT&T's plan to buy $1.9 billion worth of wireless spectrum from Qualcomm.

"As with other mergers, the competitive impact of the two transactions in combination may be even greater than the impact of each separately," the groups say in the letter, which was written by Free Press counsel Chris Riley and co-signed by Consumers Union, Media Access Project, New America Foundation, and Public Knowledge. The groups, which had previously filed in opposition to the Qualcomm spectrum deal, arguing that AT&T already has disproportionate market power, claim that the effect of the combined deals would be to stifle competition and innovation and harm consumers.

The request is an unusual one, said Andy Schwartzman, MAP's president. But, he argues, the situation itself is unusual too. "This is probably the first time you've had two transactions of such size going on at the same time," he said.

Though it seems logical that the FCC, which proceeds docket-by-docket, would consider Qualcomm when it looks at the AT&T and T-Mobile merger, the groups want to make sure the FCC gives it more than a cursory look.

"Unless someone officially asks for it, [the FCC] might not take into account the Qualcomm deal when they review AT&T and T-Mobile," said Art Brodsky, spokesman for Public Knowledge. "We'd hate to make the assumption."

It's not all that likely that the FCC will consider the two transactions together. But if it does, it would undoubtedly make what will already be a complicated process even more complicated, drawing out what is already expected to be a yearlong review.

"We are now at day 77 of the 180-day shot clock [on Qualcomm], and we urge the commission to expeditiously grant our application," an AT&T spokeswoman told Adweek. "These are two completely separate proceedings and should remain so."