The FCC has decided to call a formal hearing to review AT&T's proposed takeover of T-Mobile USA. FCC chairman Julius Genachowski is preparing a formal request for the administrative hearing, which would likely start after the Department of Justice's case against the merger, scheduled to being in February. An FCC official told the Wall Street Journal that the regulator has reached a conclusion similar to the DoJ, finding that the combination would "significantly diminish competition." FCC officials questioned AT&T's statements that the merger would benefit consumers and allow the company to expand mobile broadband services across the country faster. They also said confidential documents filed at the agency didn't support AT&T's contention that the deal would create nearly 100,000 jobs. An FCC official said the combination would instead "lead to massive job losses." AT&T called the action disappointing. "It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs," said senior vice president Larry Solomon. He added, "We are reviewing all options." The merger agreement requires AT&T to secure all necessary approvals to close the deal by 20 September, though the companies could agree to extend the deadline. At the FCC hearing, an administrative judge would make a recommendation on the deal after hearing evidence from both sides. The deal would then go to the FCC's commissioners for approval. To win its case in federal court, the Justice Department must show that the proposed merger would substantially lessen competition. The FCC must show only that the merger would be against the "public interest." The last time the FCC sent a major deal for an administrative hearing was in 2002 with the proposed merger of satellite TV providers EchoStar and DirecTV. The companies eventually pulled the deal. Separately, Genachowski circulated a proposal to approve AT&T's proposed USD 1.9 billion deal to acquire some spectrum rights from Qualcomm. FCC officials declined to discuss conditions that might apply to the deal.
