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AT&T: We're Still Mad AT&T: We're Still Mad

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AT&T: We're Still Mad

January 26, 2012

It's been a month since its bid to buy T-Mobile USA went south, and AT&T made clear Thursday that it hasn't forgotten the Federal Communications Commission's role in the deal's demise.

The two sides clashed Thursday after AT&T Chairman and CEO Randall Stephenson complained that the FCC is taking too long and using inconsistent standards to decide spectrum transactions and other deals.

"This industry continues to see just explosive mobile broadband growth and it's providing one of the few bright spots in the U.S. economy. But I think we all understand this growth cannot continue without more spectrum being cleared and brought to market," Stephenson said on a conference call Thursday morning to discuss the company's earnings report. "Despite all the speeches from the FCC, we are all still waiting. The last significant spectrum auction was nearly five years ago now and this FCC has made it abundantly clear that they will not allow significant [merger and acquisition] to help bridge their delays in freeing up new spectrum."

AT&T reported a $6.7 billion loss in the last quarter of 2011 in large part because of the break-up fee it must pay after its bid to buy T-Mobile failed. The company dropped its bid for T-Mobile last month after both the Justice Department and the FCC objected to the deal.

Stephenson complained on Thursday that the FCC used differing sets of standards related to how much spectrum AT&T can hold in each market for evaluating its bid for T-Mobile and in its recently cleared purchase of a swath of spectrum from Qualcomm.

"We are literally sitting here in a situation where we don't know how much spectrum we are allowed to hold...who we are allowed to do business with, and so forth," he said.

The FCC fired back Thursday afternoon noting that the commission has approved more than 150 commercial mobile transactions in the last year, including AT&T's Qualcomm deal.

"Unfortunately, these facts were completely ignored in the conference call," FCC spokesman Neil Grace said in a statement. On the AT&T-T-Mobile deal, Grace added that, "The DOJ and FCC staffs concluded that this action would violate the antitrust laws and result in higher prices for consumers, and less innovation and investment in the marketplace. Those conclusions surely disappointed AT&T executives, but they followed directly from the facts and the law."

It wasn't always this way between the telecom operator and its regulator. Just over a year ago, AT&T was among the few broadband providers to endorse the FCC's controversial open Internet order. Then again both sides got something out of it. For AT&T, the order's most controversial provisions did not apply to the growing wireless broadband market. At the same time, the FCC gained the support of one of the biggest broadband providers in the country.

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