Wireless Merger Has Steep Path to Approval

At first glance, there’s ample reason to believe that AT&T’s proposed $39 billion acquisition of T-Mobile could be dead on arrival in Washington.

After all, the deal would remove a nationwide wireless competitor from the marketplace and reduce the number of major national carriers from four to three. As a result, the transaction is expected to trigger close scrutiny from both the Federal Communications Commission and the Justice Department, and will be the focus of Senate and House hearings. But despite the hurdles, experts agree that there is a path for the companies to win approval of the merger. The Obama administration has been advocating many of the goals that AT&T says would result from the deal, such as faster rollout of advanced 4G wireless technology and more efficient use of spectrum resources. With the White House stepping up its outreach to the business sector and emphasizing the importance of spurring innovation, it might be difficult to justify blocking the transaction, analysts said.

“On its face, it’s a very, very heavy lift,” said Jeffrey Silva, a telecom analyst with Medley Global Advisors. Nevertheless, regulators might be wooed by AT&T’s promises of billions of dollars in infrastructure investments, job creation, and nationwide, next-generation broadband service, he noted.