Julius Genachowski, chairman of the U.S. Federal Communications Commission (FCC), officially demanded a review of the proposed merger between AT&T and T-Mobile by a federal judge with expertise in administrative law. For the time being, this move effectively stopped the merger in its tracks, according to the New York Times.
The news source reports that this acquisition by AT&T, a deal valued at $39 billion, is seen by many in the FCC as potentially detrimental for various reasons. Commission officials argue that consumers would suffer by having fewer options when choosing a wireless service provider, and that jobs could be lost in the shuffle when the merger is formed.
Before this hearing can take place, the merger must be separately tried in the U.S. District Court in Washington, D.C., where the Department of Justice has filed an antitrust lawsuit against AT&T. After that trial's conclusion, the aforementioned administrative judge will issue a ruling followed by the final decision of the FCC.
AT&T officials, including Larry Solomon, senior vice president for corporate communications, expressed dissatisfaction with the FCC, while consumer protection groups supported the decision.
In early September, less than two hours before the Department of Justice first shot down the merger, AT&T's CEO, Randall Stephenson, stated that he felt confident the deal would earn approval and be finalized by the first quarter of 2012, according to Bloomberg.