The U.S. Federal Communications Commission's staff has found AT&T's proposed $39 billion acquisition of rival T-Mobile USA to be contrary to the public interest, with officials there saying the deal would result in the largest single concentration in the U.S. mobile market in history.
The FCC, in a draft order released Tuesday,, echoing a similar conclusion in August by the U.S. Department of Justice. The FCC is now required to send the merger request to a hearing before an administrative law judge, where AT&T and T-Mobile USA will have the opportunity to argue against the FCC's conclusion, FCC officials said.
The merger would result in unprecedented concentration of market power in the mobile market, FCC officials said in a press briefing in which they spoke under the condition they not be named.
At the same time, the FCC approved, with conditions, AT&T's application to purchase $1.9 billion worth of spectrum in the lower 700MHz band from Qualcomm. The 12MHz of Qualcomm spectrum would cover 300 million U.S. residents, including 70 million people in New York, Boston, Philadelphia, Los Angeles and San Francisco.
FCC officials said they found no evidence that AT&T would roll out its 4G mobile broadband service faster if it was allowed to buy T-Mobile, as the company has suggested. The FCC's staff also rejected AT&T promises saying the merger would lead to tens of thousands of new jobs. FCC officials instead said it would be likely to lead to "massive" layoffs as the two companies cut duplicative jobs.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is email@example.com.