AT&T gave up on its effort to gain Federal Communications Commission approval for its merger with T-Mobile, at least for now, the telecom giant announced on Thursday.
AT&T said it is withdrawing its request to transfer T-Mobile's wireless licenses while it tries to fight off a Justice Department lawsuit blocking AT&T from buying T-Mobile's other assets from its parent company Deutsche Telekom. Deutsche Telekom is also withdrawing their application.
"AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom's U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice," AT&T said in a statement. The company said it is still trying to resolve the matter through other means as well.
AT&T says it plans to seek FCC approval again "as soon as practical."
The move comes two days after FCC Chairman Julius Genachowski circulated a draft order, which, if approved, would have referred the case to an administrative law judge.
That was widely seen as a major blow to AT&T's chances at the agency.
As a result of withdrawing its application, AT&T told investors it could lose as much as $4 billion in break up fees to Deutsche Telekom.
Critics of the deal said AT&T will be hard pressed to ever gain approval in the future.
"After today's actions, the chances that AT&T will take over T-Mobile are almost gone," Public Knowledge's Gigi Sohn said in a statement.
Andrew Schwartzman, senior vice president at the Media Access Project, called the decision an act of desperation in an attempt to prevent the FCC from holding a hearing.
"This turkey is too big to be hidden by releasing it on Thanksgiving," he said in a statement. "Withdrawal of the FCC applications should be seen for what it is: a concession that the deal would create a duopoly in the national wireless market that will result in higher prices and reduced choice in handsets."
In calling for an administrative hearing, the FCC said AT&T's claims of new jobs didn't stand up to scrutiny.