Merger aftermath: Everywhere AT&T loses, Verizon wins

Verizon Wireless couldn’t have asked for a better outcome to the AT&T/T-Mobile saga. Not only did its biggest rival fail to leapfrog Verizon in size, but AT&T wasted nearly a year’s worth of lobbying resources in the attempt. Where AT&T failed to pick up more 4G spectrum through a controversial merger, Verizon took the easier route toward building its 4G holdings, buying up licenses from cable companies. Most importantly, from Verizon’s perspective, AT&T/T-Mobile fizzled out with a whimper rather than imploding with a bang, resulting in no new regulations on the wireless industry and no Federal Communications Commission or federal court decisions to impede Verizon’s future consolidation ambitions.

Verizon’s official position on AT&T-Mo was that it remained unopposed to the merger as long as it imposed no new regulations or conditions on wireless operators. That was a pipe dream, and Verizon knew it. Any merger the size of the AT&T deal would surely have resulted in divestitures in multiple markets, along with restrictions on how and where AT&T used its new spectrum. And any conditions imposed on AT&T would have applied to Verizon when and if it sought to buy a competitor or more spectrum in the future. Verizon was hoping the minimize the damage, and it got its wish. The deal never got to a vote before Federal Communications Commission and never saw an official court date in the U.S. Department of Justice’s antitrust lawsuit. Of course, the failure of AT&T-Mo likely means any deal of such scale is out of the question for the foreseeable future. If Verizon had any ambition on making a bid on Sprint, those hopes are now dead, though an acquisition of a MetroPCS or Leap Wireless might still be possible. But given Verizon’s actions in the last few weeks it’s unlikely it was ever entertaining the possibility of buying Sprint or any other operator.