If AT&T Prevails at Trial, It Faces Battle With FCC

Even if AT&T Inc. wins its court fight with the Justice Department over its bid to acquire Deutsche Telekom AG's T-Mobile USA for $39 billion, the deal could still be torpedoed by the Federal Communications Commission, which has shown little liking for the combination.

The Justice Department, which filed suit Wednesday in federal court to block the acquisition, and the FCC are separate agencies with different standards for assessing mergers. But the two worked together as the Justice Department prepared its suit, and the FCC has never approved a deal that the Justice Department rejected, according to FCC officials. "It's a DOJ decision, but there was a lot of input from [FCC Chairman Julius] Genachowski's team," an FCC official said. Chairman Genachowski also released a statement saying that while the FCC was still conducting its review, he had "serious concerns" about how competition would be affected by the deal, which would combine two of the four nationwide cellphone companies. While the Justice Department focuses on competition issues, the FCC looks more broadly at whether mergers are in the public interest. That standard is more subjective, and it has allowed the agency to seek wide-ranging merger concessions in the past, such as multiyear price caps for consumers or access to networks for competitors. Analysts, meanwhile, were skeptical that the merger could go through.