AT&T Threatens to Sue FCC If Agency Ignores T-Mobile Pullout

AT&T Inc. (T) said it plans to sue the Federal Communications Commission if the agency doesn’t let the company withdraw its application to buy a smaller rival for $39 billion.

The FCC is obligated by its own rules to honor AT&T’s move to rescind its application to acquire T-Mobile USA Inc., Wayne Watts, general counsel for AT&T, said today in a blog entry.

“We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us,” Watts said in the entry on the company’s public policy blog. “Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”

AT&T and T-Mobile parent Deutsche Telekom AG withdrew their FCC applications yesterday after agency Chairman Julius Genachowski asked fellow commissioners on Nov. 22 to send the deal to a hearing, signaling an attempt to scuttle the merger.

The Justice Department already has sued to block the transaction as anticompetitive, with a U.S. district court trial set to commence in February.

AT&T’s move is “a request” that the FCC “will consider,” agency spokeswoman Tammy Sun said in an e-mailed statement yesterday. Sun referred a reporter today to that statement and declined to comment further.

The FCC should publish the order that would send the merger to a hearing, Harold Feld, legal director of Washington-based advocacy group Public Knowledge that opposes the merger, said in an e-mailed statement yesterday.

“It is sure to contain conclusions that AT&T would like to keep quiet,” Feld said.

‘You’re Done’

With AT&T’s withdrawal, the FCC could dismiss the application with prejudice, Feld said. The effect would be to tell AT&T, “‘You’re done. Don’t come back to us with anything like this again,’” he said.

FCC staff members said during a Nov. 22 conference call that they had concluded the deal would diminish competition and lead to job losses. The agency didn’t find evidence that the deal would significantly speed broadband deployment, according to the FCC staff, who spoke under ground rules that forbade identification.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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