FCC Restarts ‘Shot Clock’ on AT&T, T-Mobile Merger, Could Be Approved as Early as December

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The tables have turned again in the Federal Communications Commission’s so-far topsy-turvy review process of the proposed $39 billion AT&T merger with T-Mobile, this time in AT&T’s favor.

This morning, the FCC’s Wireless Telecommunications Bureau restarted the 180-day-long “shot clock” on the review process at day 83, meaning that under its own informal deadline, the agency will have 97 days to approve or sideline the proposal, by December 1, 2011. FCC sources said that a decision would likely come much sooner.

The agency had previously frozen the informal clock on July 20, seeking new models AT&T promised would support its argument that the combined wireless network would be more efficient for customers and at the same time, not anti-competitive.

Now the FCC says it has received and analyzed AT&T’s new models and found nothing objectionable or problematic.

In a public letter to AT&T’s top lawyer Richard L. Rosen, Wireless Telecommunications Bureau Chief Rick Kaplan outlines the government’s rationale for restarting the clock, advising AT&T not to submit any new data until the review is complete:

Since our original correspondence, AT&T has submitted the models and subsequently updated one of them. 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…

…Our understanding is that, unless specifically prompted by a request from the Commission or the Department of Justice, AT&T will not be submitting any further revisions to the models.

And yet, on Wednesday the FCC published a letter from a legal staffer asking AT&T for more information on its claim that it would need to merge with T-Mobile in order to have enough benefits-to-cost to roll out its next generation, LTE network. According to FCC sources, the two letters are completely distinct and do not affect the shot clock restart.

On August 12, TPM obtained an improperly redacted merger filing by AT&T that indicated the company wasn’t willing to spend the $3.8 billion necessary to expand LTE coverage to 97% of the country unless the merger was approved, in which case, it would spend 10 times as much.

Some opponents hoped the filing would derail AT&T’s arguments for the merger, but based on Friday’s FCC decision, that doesn’t appear to be the case.

Indeed, AT&T wholeheartedly embraced the restart of the shot clock. According to an emailed statement, AT&T Senior Vice President Robert Quinn said:

“We are pleased that the FCC has restarted the clock and we are confident that the Commission will move expeditiously to complete its review of our merger with T-Mobile. 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. Once approved, this merger will unleash billions of dollars in badly needed investment and will create many thousands of well-paying jobs.”

Of course, not everyone agrees with that line of thought, or even with the review process as it has been conducted by the FCC thus far, with some in government and tech arguing for greater transparency on the impact the merger will have on consumers.

But the signs in Washington are pointing towards approval. If approved, the combined companies, currently the second (AT&T) and fourth (T-Mobile) largest wireless carriers, would surpass Verizon to become the largest in the nation with 130 million subscribers. Sprint, currently the third-largest carrier, would be the immediate loser, having to contend with two wireless behemoths for customers and spectrum.

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