@jbtaylor on tech

On the afternoon of Dec. 19, AT&T announced that it was abandoning its bid to takeover T-Mobile from Deutsche Telekom.

The companies involved no doubt read what Judge Huvelle said about their arguments before her court. Just 10 days earlier, on Dec. 9, the judge eviscerated the lawyers representing AT&T, T-Mobile and Deutsche Telekom. On five separate instances, the judge called their arguments "presumptous" and she accused the attorneys of attempting to "use" the court. "The landscape has changed," Huvelle said.

It was a devastating day for AT&T and friends.

And AT&T would just as soon pretend it never happened.

So that's exactly what the company did. In its statement announcing the news of the failed merger, AT&T's CEO blamed the FCC and the Justice Department for a problem which Judge Huvelle said was "self-made". And then predictably, AT&T's friends at conservative think tanks and editorial pages chimed in to inject President Obama into the debate.

Nonsense.

AT&T, DT and T-Mobile could go back to court in January and argue that the DOJ and FCC were wrong on the law. But they knew that was a losing battle. Their own documents contradicted every claim in their endless press releases.

It was just easier to say that they were beat up by overzealous regulators appointed by a liberal President who disregards the law.

Give me break.

This was never about politics. It was about consumers, competition and antitrust law. That's why a bi-partisan group of state attorneys general joined with the Justice Department in filing suit to block the deal.

Not that AT&T didn't try to make it all about politics. They touted the political support of governors and members of Congress and civic groups, nearly all of whom had received cash from the company. And AT&T loved to tout the political support of state attorneys general who opted not to participate in the National Association of Attorneys General task force which investigated the deal.

Each of these AGs, who didn't investigate the proposed transaction, yet endorsed it, also were getting campaign cash from AT&T.

There is certainly an argument worth having about the role of regulators in telecom policy. But in this case, AT&T's bid to takeover T-Mobile was not stopped by the FCC or the Justice Department or state attorneys general, or rivals Sprint or C Spire, or the legions of consumer advocates or the tens of thousands of consumers who protested this stinker of a deal from day 1.

It was stopped by Deutsche Telekom and AT&T, who walked out of court, unwilling to face further scrutiny not from a regulator whom they rail against, but scrutiny from a Federal judge, who found their legal arguments unconvincing.

p.s. Please remember that this is my personal blog and does not necessarily reflect the views of my employer.

Yesterday's status conference for the Justice Department's antitrust case against AT&T, Deutsche Telekom and T-Mobile should have been a snoozer. For weeks I had told media not to bother to attend as I expected several hours of discussion about pre-trial procedures and planning. Chatter about how many witnesses will be called and when depositions would be held don't make for good news stories in my view.

"Come in February when the actual trial begins," I said.

But that changed when AT&T and Deutsche Telekom attorneys decided to yank their merger applications from the FCC at 2:30 in the morning on Thanksgiving Day.

The attorneys didn't anticipate that the FCC would release to the public its report on the investigation into the proposed transaction. The report made it clear that no matter how you slice it, the proposed takeover of T-Mobile is anti-competitive and not in the public interest.

Never mind, said AT&T. The report is a draft. It's a preliminary report. It has no weight of law. It's unprecedented to have released such a report.

None of that was true, of course.

But AT&T told media that it had decided to focus on beating the Justice Department and state attorney generals in court. Then, the theory went, they would go to the FCC and say, "See, there's nothing anti-competitive about our mega-merger. Approve it please."

Well, yesterday Judge Ellen Segal Huvelle was having none of that. She had read the FCC report and told AT&T's attorney who urged her to ignore it, that, "It was fairly negative, sir."

Talk about an understatement.

Then, for the next hour or so, she eviscerated lawyers from AT&T and Deutsche Telekom, repeatedly telling them that their position was, "presumptuous" and at one point, she said, "I think you're flatly wrong on the law."

My favorite part was when the AT&T lawyer was complaining about how unfair it was that the judge was reconsidering the expedited schedule which set the trial for February.

Pointing out that it was AT&T and Deutsche Telekom who pulled their application from the FCC, an action which prompted her to reconsider the February trial date, Judge Huvelle said, "your problem is self-made."

At that point, AT&T's lawyer said, "Let's forget about the FCC for a moment" -- which prompted the entire courtroom to burst into laughter.

I'm told by a reporter that during the laughter, Judge Huvelle said, "I'm not forgetting about the FCC."

And that, ladies and gentlemen, is now the biggest problem facing AT&T, Deutsche Telekom and T-Mobile.

Next week, on Dec. 15, the parties are back in court to argue a motion from the Justice Department which would essentially put the case on hold until AT&T and Deutsche Telekom file a new merger application at the FCC. The judge indicated that she would like to have an FCC official appear in court next week, but it is not clear if the FCC will send a representative.

While attorneys will also argue some pre-trial motions related to the Sprint and C Spire Wireless antitrust suits against AT&T, Deutsche Telekom and T-Mobile, I think the most interesting part of the day will be to hear how AT&T plans to convince a skeptical judge that she should, "forget about the FCC."

p.s. Please remember that this is my personal blog and does not necessarily reflect the views of my employer.

The last few days in the fight over AT&T's bid to takeover T-Mobile have been a blur, but today stood out. Because today, on behalf of consumers everywhere, the Federal Communications Commission struck what perhaps may be a fatal, knock out blow against AT&T's Ma Cell ambitions.

The Commission granted AT&T's and Deutsche Telekom's request to withdraw their AT&T/T-Mobile merger application from further agency consideration, but not before releasing the results of the agency's eight month long investigation into the transaction. The report's conclusions are devastating and inescapable.

And here's the rub: there's nothing in the report which would lead any objective reader to conclude that the FCC will react any differently if or when AT&T and Deutsche Telekom come back for a second attempt at FCC approval, a step the companies indicated the would take later, assuming they are successful against the Justice Department at trial next year.

Significantly, three out of four sitting FCC commissioners (Genachowski, Copps and Clyburn) issued formal statements endorsing today's Commission action, indicating that had AT&T and Deutsche Telekom not sought to yank their merger application on Thanksgiving Day, the Commission would have voted to move the matter to an Administrative Law Judge, a prelude to an inevitable official agency rejection.

But that's not even the best part. The best part is that now, with the report's release, the public, the financial analysts, investors and the Boards of both AT&T and Deutsche Telekom will see that the FCC doesn't accept any of the companies' main arguments surrounding the transaction. Most importantly, Judge Ellen Segal Huvelle, the judge trying the Justice Department's case against AT&T will see the report. I fully expect that Justice Department will introduce the report and other items in the FCC's merger docket as evidence at trial next year. Judge's tend to give a great deal of weight to the opinion of independent expert regulatory agencies.

We'll see what happens next. AT&T has 6 billion reasons to drag this out well into next year, so this is not over yet.

That's why I don't think the proverbial fat lady is singing, but I do think I hear her warming up.

p.s. Please remember that this is my personal blog and does not necessarily reflect the views of my employer.

In what has to have been one of their worst PR moves of the last 8 months, AT&T and Deutsche Telekom announced at 2:30 a.m. ET on Thanksgiving morning that they, in the companies' words, on Nov. 23, "withdrew, without prejudice" their pending application to transfer T-Mobile USA's spectrum licenses to AT&T.

The move meant reporters in the U.S. who have been covering the story woke up to the fact that their competitors in Europe had the scoop. It also meant that they spend all of Thanksgiving Day dealing with AT&T's turkey of announcement, rather than spend it with their families.

And let me tell you, reporters are fuming.

Judge Huvelle has set a scheduling conference for 9:30 a.m. Dec. 9, 2011 in Federal Court in Washington, D.C.

Sprint's Susan Z. Haller, vice president -- Litigation, issued the following statement to media:

“This evening, Judge Ellen Segal Huvelle decided that the antitrust complaints filed by Sprint and C Spire Wireless against AT&T, Deutsche Telekom and T-Mobile can go forward. Both Sprint and C Spire have demonstrated to the Court that they would be injured if the AT&T’s proposed takeover of T-Mobile were completed.

By allowing Sprint and C Spire Wireless to move forward with these lawsuits, the Court has ensured we receive a fair hearing. Along with the Justice Department and a bi-partisan group of Attorneys General from seven states and Puerto Rico, Sprint has concluded that the transaction would give AT&T the ability to raise prices, thwart competition, stymie innovation, diminish service quality and stifle choice for millions of American consumers.

We are pleased that the Court has given us the chance to continue fighting to preserve competition on behalf of consumers and the wireless industry.”