AT&T's Merger Trial Balloon Quickly Deflating

[Commentary] There was a notable hissing sound emanating from Capitol Hill at the end of last week. It was the air being let out of AT&T’s trial balloon, “The Inevitable.”

Thanks to some aggressive questioning from the Senate Antitrust Subcommittee, particularly Chairman Herb Kohl (D-WI) and Sens Amy Klobuchar (D-MN) and Al Franken (D-MN), it quickly became clear that there are lots of problems to the $39 billion takeover of T-Mobile that AT&T either hadn't counted on, didn't want to deal with or thought would simply be overlooked.

AT&T has said repeatedly it expects the deal to be approved, and hasn't yet mentioned any conditions. Granted, it is early in the process, but telling everyone what is expected is part of creating that air of inevitability to intimidating to legislators and agency staff that will have to make the call. Adding to the environment, financial and industry analysts have said since the deal was announced on March 20 that it would be approved, albeit with some conditions. That meme, based on the performance of the Antitrust Division in big, high-profile media/telecom cases, has infiltrated much of the thinking and writing about the deal. As the hearing demonstrated, and as some reporters are starting to pick up, AT&T’s deal is not a foregone conclusion, and in fact the company still has a lot of explaining to do in order to justify wiping out the fourth-largest national wireless carrier.