AT&T Inc. blasted the Federal Communications Commission on Thursday for compiling what it called an unfair and biased report on what would happen if AT&T were allowed to buy T-Mobile USA.
AT&T agreed in March to buy T-Mobile USA for $39 billion, but the deal has encountered opposition, first from the Justice Department and then from the FCC. Analysts now give it only a slim chance of going through.
The FCC took the unusual step of releasing its analysis of the merger on Tuesday. It found "questions of fact" about AT&T's stated justifications for the merger and dismissed most of AT&T's arguments. It said competition in the industry would suffer if AT&T swallowed T-Mobile, and potentially lead to higher prices for consumers.
AT&T immediately attacked the release of the report, saying it was a draft that had never been voted on by the five-member commission. The "questions of fact" would have been addressed at an administrative hearing that now won't take place, since AT&T has withdrawn its merger application. The company is expected to resubmit the application.
On Thursday, AT&T released a more thorough, combative response to the report. It's an unusual one for a company that spends heavily on lobbying and cultivates close relationships with regulators.
"The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis," the Dallas-based company said.
In a rebuttal, the FCC said its staff "dispassionately" waded through a 200,000-page record to produce an "objective" report.
The FCC report said the merger would threaten fragile competition in the industry, yet AT&T pointed out that it also cites existing competition from Verizon Wireless as a strong motivator for AT&T to build out its new data network, even without the resources it would gain by buying T-Mobile USA.
The FCC report disputed AT&T's claims that the merger would create jobs rather than eliminate them, as is usual for mergers. AT&T says the expansion of wireless broadband will stimulate job creation, and points out that the FCC itself says its own $4.5 billion broadband fund would create half a million jobs over six years. That's counting not just phone-company jobs, but jobs created by the availability of broadband.
"This notion _ that government spending on broadband deployment creates jobs and economic growth, but private investment does not _ makes no sense," AT&T said Thursday.
The war of words is unlikely to affect the outcome of AT&T's quest to buy T-Mobile USA, since the chief hurdle is a suit filed in August by the Justice Department to block the deal.