AT&T is Overdue
via flickr.com
Under FCC rules, when companies merge their applications are deemed complete at the time of submission. That's one reason why when AT&T submitted a new economic model four and half months into this FCC's review of the company's proposed takeover of T-Mobile, the Commission stopped its informal merger review clock.
- AT&T could have submitted this model in the original application it gave the FCC, but it failed to do to so.
- It also never mentioned the model in any of the "reply comments" the company filed in June and July.
- AT&T's CEO never brought it up in his testimony before a Senate or House hearing on the T-Mobile.
- And none of AT&T's attorneys ever mentioned it in any of their hundreds of meetings with the FCC, that is until one meeting in July.
And five days after first learning of this new economic model, the FCC decided to stop the informal merger review clock. In their letter to AT&T, the Commission's attorney makes it very clear that the FCC will take all the time it needs to review the new model and that it will give other parties all the time they need to do the same.
The FCC did make it very clear that they expected this new economic model to be submitted to the Commission by July 25.
AT&T very smartly submitted the new model at around 7:30 p.m. that night, just hours before President Obama and Speaker of the House John Boehner were to address the nation on the debt ceiling crisis matter. (That was smart on AT&T's part, because it minimized media attention.)
Yesterday, I was amused to see AT&T's PR team alert media to a Sprint FCC filing criticizing the economic model and asking the Commission to disregard it. Here's the thing -- no reporter would have ever heard about Sprint's filing had AT&T not brought it to their attention.
Yet on the same day that AT&T is calling Sprint "desperate" for pointing out that AT&T is breaking FCC rules, AT&T is still tinkering with the economic model that was due to the FCC on July 25.
In an FCC filing late yesterday, AT&T notified the FCC it was providing, "updated inputs". In still another filing yesterday, AT&T offers an "updated economic analysis" to the Commission.
So why didn't AT&T offer this economic model and its companion engineering model in April when it submitted its original application? Why, when the FCC asked for it on July 25, is AT&T still revising their submission? Why is this economic model secret? For the most part, AT&T's original application to takeover T-Mobile was an open book -- sure there were some parts redacted -- but there were actually hundreds of pages available to the public. If AT&T is now relying upon this economic model to justify this transction is in the public interest, why can't the public see it and decide for itself?
Now we have this new economic model submitted in the middle of the regulatory review and even after the FCC asks for it, AT&T is still modifying it almost a month later.
All of this makes me think that the silver bullet of this new economic model isn't convincing the FCC (or for that matter -- the DOJ) any more than the original application did.
After all, if the original application was doing the job and had convinced regulators that the T-Mobile takeover was a good deal for consumers, why would AT&T ever have brought up the idea of a new economic model as part of its effort to justify the transaction?
Seems to me, AT&T should just save us all a lot of trouble and pull the plug on this deal rather than dig the hole its stuck in any deeper. If they pay Deutshe Telekom the $6 billion break up fee and they invest the $3.8 billion they need to spend to build out 4G to 97 percent of Americans, they would achieve everything they've promised with the T-Mobile takeover, but they'd save about $30 billions of shareholders' money.
