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The AT&T T-Mobile Deal Is Officially Dead
After Historic Consumer, Industry and Regulatory Opposition
by Karl Bode 06:29PM Monday Dec 19 2011
AT&T today finally acknowledged the obvious: their highly controversial plan to acquire T-Mobile for $38 billion is officially dead. The deal, hugely unpopular among consumers and consumer advocates, faced increasingly steep opposition from regulators who weren't buying AT&T's claimed merger benefits. That's because said claims, ranging from increased broadband coverage to job creation, were repeatedly proven false by even fleeting examination of AT&T's own documents and publicly available data.

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"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry," AT&T said in a statement release to the press this afternoon. "It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately," said the company.

AT&T's nodding in part at their still-pending effort to acquire Qualcomm's FLO TV spectrum, a deal the company last week insisted they'd walk away from if too many conditions are placed on the spectrum involved. AT&T will now have to pay T-Mobile owner Deutsche Telekom a $4 billion break up fee, which AT&T recently acknowledged will be closer to $1.4 billion after a tax write off.

How did AT&T's effort implode? The deal was simply so bad even a pay-to-play government with an addiction to AT&T cash struggled to justify approving it. At a time when job creation is at a political premium, there was simply no real data proving AT&T and CWA's bunk claim that the deal was a huge job creator. Meanwhile, claims that the deal would improve AT&T's LTE coverage were destroyed by an accidental leak by AT&T's own attorney last summer.

AT&T's own hubris also played a major role in the destruction of the deal. As the biggest U.S. corporate campaign contributor since 1989 AT&T had grown used to getting what they wanted. As a result AT&T grew pampered and oblivious, and as the Washington Post recently noted, couldn't see how their disinformation and PR campaign to get the deal approved (which included paying everyone from cattle ranchers to ballooning associations to blither their support) was rubbing regulators the wrong way.

Granted the deal was also destroyed thanks to an incredible groundswell of unprecedented public opposition. Just as we saw in recent (though possibly temporary) consumer victories over metered billing in both the U.S. and Canada, consumers are still capable of making a difference, even when the political deck is overwhelmingly stacked against them.


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