What Went Wrong For AT&T

[Commentary] AT&T hasn’t yet formally surrendered in its campaign to pay $39 billion for T-Mobile, and may not for a while. Its top officials are still making provocative, pugnacious pronouncements, whinging about its unfair treatment at the hands of regulators, while repeating arguments that have all but been discredited and dispensing other irrelevancies. It’s obvious to most observers that AT&T’s attempt to take over T-Mobile is all but dead. The post-mortems are starting and the question being asked is: what went wrong for AT&T? There is a two-part answer: 1. nothing 2. everything.

One problem for AT&T is that this deal was like trying to play football in a swimming pool. It doesn’t matter what plays you call, or what players you have. It’s just not going to work as well as being on a field. This takeover was just too blatantly anticompetitive and the supporting reasoning and facts were just too thin for the normal set of plays to work correctly, no matter how well executed. AT&T wanted to take out one of its three national wireless competitors, a company which had 33 million customers and employed about 40,000 people. It was that simple and inescapable fact at the heart of the matter that made it so difficult for policymakers to swallow. The other problem is that the Antitrust Division was starting to feel more bold, going to court to block more deals. And Federal Communications Commission Chairman Julius Genachowski was being pushed to put on his man pants both legs at a time.