FCC Commissioner Michael Copps confirmed in a C-SPAN interview that he is not happy with AT&T’s proposed acquisition of T-Mobile USA. The FCC regulator is concerned about the amount of power and influence this merged company would have over the wireless industry in the US. This merger would take 80% of the cellular industry and place it in the hands of two companies – AT&T/T-Mobile and Verizon Wireless. Smaller companies like Sprint, Cellular One and U.S. Cellular may find it difficult to compete against such overwhelming odds. In Copps’ opinion, the merger will be even more difficult to approve than the Comcast-NBC Universal merger which Copps voted against, but was approved by the FCC as a whole.
To go ahead with the acquisition, AT&T needs the approval of both the FCC and the Department of Justice. Public statements by AT&T suggest the carrier is optimistic the deal will be approved, but may require the company to surrender customers and spectrum. Such divestitures are common when two wireless carriers merge as it makes difficult-to-acquire resources available to other carriers and ideally helps to stimulate competition in local markets. AT&T expects this deal to close within the year, but it has a rocky road ahead of it. The wireless carrier will have to respond to objections from other carriers such as Sprint as well as skepticism from within the government regulatory bodies themselves.