FCC slams AT&T/T-Mobile merger proposal

AT&T's proposed $39 billion merger with T-Moble is in jeopardy. On Tuesday, the Federal Communications Commission confirmed that it has allowed AT&T to formally withdraw its application to the FCC for the T-Mobile merger. However, the FCC wasn't done. It also issued a over 100 page report that was highly critical of the merger proposal.

In the report, the FCC gave a thumbs down to the idea of merging AT&T and T-Mobile, claiming that if it were to go through. " ... significant harms to competition are likely to result, primarily in the form of increased prices for consumers, reduced incentives for innovation and decreased consumer choice."

AT&T offered up its own statement on the FCC report, saying, "This report is not an order of the FCC and has never been voted on.  It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place.  It has no force or effect under law, which raises questions as to why the FCC would choose to release it.  The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper."

Meanwhile, Reuters reports that AT&T is making what may be a last ditch effort to save the merger with T-Mobile. Citing unnamed sources, the report states that AT&T could sell off T-Mobile's customer base and most of its wireless spectrum over to smaller rival Leap Wireless.

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