FCC Restarts Informal 180-Day Clock on AT&T/T-Mobile Review

The bureau paused the clock July 20, citing “new models” submitted by AT&T to bolster its arguments on the efficiencies made possible by the deal, weighed against the potential anti-competitive effects. “Since our original correspondence, AT&T has submitted the models and subsequently updated one of them,” said a letter from the bureau to AT&T (http://xrl.us/bmbmr7). “We have had several meetings with AT&T regarding the models and have posed a number of detailed questions concerning their construction and the assumptions they contain. We have now received AT&T’s answers to our specific questions as well as AT&T’s confirmation that it believes our record is complete with respect to the models."

"The engineering and economic models we have provided the Commission confirm the extensive capacity gains and corresponding consumer benefits that the combination of AT&T’s and T-Mobile’s complementary assets will produce,” said AT&T Senior Vice President Bob Quinn.

The development likely signals a quick review by the FCC, said MF Global analyst Paul Gallant. “The commission seems to be keeping up the aggressive pace it set early on,” he said. “Comcast-NBC took about a year, and I suspect this one will beat that.” Medley Global Advisors analyst Jeff Silva said it would be “foolhardy to read too much one way or the other” into the restart of the clock. “We simply do not know how the FCC will process and integrate into its review supplemental data, information and analyses supplied by AT&T over the past month or so,” Silva said. “Perhaps the most you can conclude from the stopping and restarting of the clock is the FCC (and by extension the Justice Department) is intensely scrutinizing the transaction, carefully weighing potential costs and benefits of the deal and in doing so not necessarily taking at face value merger benefits asserted by AT&T. The commission, through recent information requests, appears to be pressing AT&T to further justify (with supporting data and documentation) why the acquisition of T-Mobile is necessary. But such queries in and of themselves do not portend any particular outcome."

"Let the games begin,” said Andrew Schwartzman, senior vice president of the Media Access Project. “I haven’t looked at the confidential versions of the new data yet, but I hope that the filings are more complete than before, so we, everyone, can make their case, pro and con. We want the FCC to decide this promptly on the merits."

Public Knowledge Legal Director Harold Feld said restarting the clock could be a negative development for AT&T. “The commission has decided AT&T has nothing more to say. I don’t read that as a good thing for AT&T, particularly given the tenor of the last month of ex partes,” Feld said in an e-mail. “AT&T’s apparent suggestion that the only reason the FCC would restart the clock is to get to yes is wishful thinking/spin."

AT&T shouldn’t get any more chances to submit a revised economic model to the FCC, said Free Press Research Director Derek Turner. “No matter how many tries AT&T gets, however, nothing can change the fact that the case for this merger is unraveling,” Turner said. “Free Press and others have consistently demonstrated the substantial flaws in the prior models, and all the evidence shows AT&T does not need to take over T-Mobile to compete fairly in the wireless marketplace."

"I am not surprised that the FCC started the clock again, they will probably stop and start it again when the AT&T numbers do not match up with their statements,” said Rural Cellular Association President Steve Berry.