DoJ Says "No Ma Cell"; What Happens Next?
[Commentary] In a court fight with AT&T, the odds are in the Department of Justice's favor -- which is why so many companies simply abandon the merger once DoJ has filed to block an acquisition.
If AT&T fights, the Federal Communications Commission is not off the hook with its review of the deal. It needs to make a decision. The most obvious (and most likely) thing for the FCC to do is follow the general shape of DoJ's antitrust complaint and refer for a hearing. Remember, even if AT&T ultimately wins on pure antitrust, the same concerns may make the matter contrary to the public interest under the higher public interest standard. So it seems fairly straightforward that a DoJ complaint = issue of material fact that an administrative law judge (ALJ) would need to consider, and the if AT&T wins on the Antitrust side that is a factor to consider by the ALJ. But this case is unusual because it actually gives rise to the concern that the proposed merger violates Section 314 of the Communications Act. So the FCC has a rare option here. It can decide that the merger is ungrantable as a matter of law and dismiss the Applications. At that point, AT&T can appeal to the D.C. Circuit, a process which will take at least a year, possibly more, and where the agency gets lots of deference for its decision. And, even if AT&T wins its appeal, it gets the right to a hearing on the issue of material fact (does this violate Section 314). My bet is AT&T gives up at that point, or T-Mobile walks away and collects its $6 Billion in spectrum and cash.
Bottom line is that there are really no good options for AT&T at this point. To come back for a victory, AT&T must (a) convince FCC to hold off; while, (b) convincing the court to go ahead despite the FCC being on hold. And then it has to win the case -- which the odds do not favor. At some point, T-Mobile is going to exercise its option and walk. It has $6 billion in cash and spectrum, which will make it a heck of a lot more competitive (or more attractive to a potential buyer). AT&T can delay the inevitable by fighting. But while AT&T still has a theoretical road to victory, I don't think anyone seriously wants to take that bet.
DoJ Says "No Ma Cell"; What Happens Next?