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Posted at 11:48 AM ET, 04/14/2011

FCC begins review of AT&T bid to buy T-Mobile

The Federal Communications Commission said Thursday that it has opened its review of AT&T’s proposal to buy T-Mobile for $39 billion.

The agency issued a public notice that begins the long regulatory process by allowing companies and outsiders to weigh in on the deal.

In a conference call with reporters, the FCC said its job is to look at whether the merger is in the public interest, which includes an analysis of whether it would harm competition now or in the long run.

It has specific tests to determine if the deal would consolidate too much spectrum in the hands of one company in any given market. It will also consider how the deal affects consumers by analzying the number of providers available and the revenue generated by carriers after the union.

Consumers Union and other public interest groups warn that prices for wireless users will go up by as much as $50 a month if the deal goes through. T-Mobile has been a low-cost national alternative to industry leaders Verizon Wireless and AT&T.

The FCC said it will also evaluate whether the deal fits into the agency’s spectrum managements and if the transaction makes it more difficult to expand communications services.

The FCC did not offer a timeline for the merger review. Indeed, AT&T and T-Mobile haven’t officially submitted their application for regulatory review at the agency but plan to do so on April 21.

The wireless deal will be a key test for an agency that approved the merger of Comcast and NBC Universal earlier this year.

The FCC has a broader scope for its merger analysis compared with the Justice Department, which will evaluate how the deal applies to antitrust laws. That leeway allows the FCC to impose many types of conditions, if it approves the merger.

Consumer groups and competitor Sprint Nextel want the FCC and Justice to block the deal — which would be the first rejection of a communications industry merger during the Obama administration.

Related stories:

Reading the tea leaves: FCC chief hints at lack of competition in AT&T deal

AT&T executive Q&A on merger

By  |  11:48 AM ET, 04/14/2011

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