AT&T/T-Mobile Proposed Merger Faces Another Road Block

Federal Communications Commission Chairman Julius Genachowski has recommended that the FCC Commissioners send the proposal to an agency judge for a hearing. This type of referral is generally reserved for proposed mergers that do not demonstrate that they are in the public interest. The hearing is essentially an internal trial within the agency. Many believe that the act of referring a proposed merger such as this to an agency hearing is akin to sending the message that the merger should not be approved. It also provides the proponent of the merger the opportunity to gracefully withdraw its proposal. Such was the case for the last FCC hearing referral in 2002 when the FCC challenged Echostar's proposal to acquire competitor Direc TV. Echostar withdrew its proposed acquisition upon referral to the agency hearing. While AT&T seems to want to continue to press on, it faces significant hurdles including an antitrust lawsuit brought by the Justice Department which is scheduled for trial for February, 2012.