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Will the FCC approve AT&T's acquisition of T-Mobile?

The FCC is reviewing AT&T's proposed acquisition of T-Mobile U.S. Will the commission OK the deal? Wireless expert Mike Jude offers a two-part answer.

The FCC is reviewing the proposed AT&T/T-Mobile acquisition. Is it likely to approve this merger?

Yes, the FCC will approve the acquisition of T-Mobile U.S. by AT&T. There are two reasons why.

In the first place, the FCC has been in the process of adopting new net neutrality regulations that would place broadband delivery in the realm of common carriage. Its initial take was that wireless broadband would likely be exempt from most of the new regulations. Now, however, the AT&T move gives the FCC the perfect opportunity to demand concessions from a major wireless player that will likely be accepted. This will, by default, give the FCC what it wants: regulatory authority over broadband, regardless of delivery modality.

Second, AT&T is relatively bandwidth-limited compared to its primary competitors in the 4G market, Sprint and Verizon. By approving the deal, the FCC can reasonably ensure effective competition in the Long Term Evolution (LTE) space. Although Sprint, for one, is very much against anything that would significantly increase AT&T's market power, its technology focus has been on WiMAX, not LTE. After arguing the merits of WiMAX for so long, it would be perceived as slightly disingenuous for Sprint to argue that enabling more complete LTE coverage would threaten it significantly.

Bottom line: After dragging AT&T through the regulatory approval process for a while to soften it up, the FCC will exact some important concessions and then approve the deal.

This was last published in April 2011

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