AT&T's proposed $39 billion purchase of T-Mobile is facing increasing headwinds. On Tuesday, the FCC announced that chairman Julius Genachowski will float a draft order calling for an administrative law judge to review the deal.
This action is being read as a sign that the Federal Communications Commission will shoot down the merger.
The agency typically makes such referrals in cases where it cannot find a public benefit to a deal, or if it has a lot of questions about it.
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An FCC official said Tuesday that the agency’s staff found the T-Mobile deal would significantly diminish competition and would lead to a concentration of ownership previously unseen in the wireless industry. The commission also found the purchase could lead to substantial layoffs once the companies merge.
The FCC has reviewed 200,000 pages of documents and has convened 100 meetings with stakeholders and 30 with the applicants themselves.
Also on Tuesday, the FCC announced that Genachowski would issue an additional draft order calling for conditional approval of AT&T’s $1.9 billion acquisition of some of Qualcomm’s spectrum licenses.
The FCC merged consideration of the T-Mobile and Qualcomm deals in August.
The Department of Justice's anti-trust case against the T-Mobile deal will be heard in February. The administrative law judge’s review would not occur until after those hearings are concluded.
In 2002, EchoStar and DirecTV decided to fold their proposed merger after the FCC ordered a similar review.
