FCC Permits AT&T & T-Mobile to Withdraw Merger Application (Updated)

The two companies asked to withdraw their application for a merger on Thanksgiving, but consumer groups had wanted to speak out against it

The Federal Communications Commission announced Tuesday that it will allow AT&T and Deutsche Telekom to withdraw their application for AT&T's acquisition of T-Mobile, ending a week of speculation about the future of the case.

While this does not reverse the likely failure of the deal, the move prevents a potential legal spat between the FCC and AT&T.

The two companies asked to withdraw their application last week after FCC Chairman Julius Genachowski said that the deal was not in the public interest. The FCC said it would consider the withdrawal, while AT&T threatened to sue if the FCC prevented it.

Also read: AT&T, T-Mobile Merger in Jeopardy, FCC Application Withdrawn

Consumer groups were irate because they had wanted to voice their objections to the deal, which would combine two of the four largest wireless services providers in the country. They filed a petition on Monday asking the FCC to continue with its plans to send the case to an administrative judge for an hearing.

"Our review of this merger has had a clear focus: fostering a competitive market that drives innovation, promotes investment, encourages job creation, and protects consumers," Genachowsk said in a statement. "These goals will remain the focus if any future merger application is filed.”

AT&T hasn't given up on the merger yet. A judgment of the $39 billion deal, which most analysts believe is unlikely to receive approval, will now come first from a lawsuit involving the Department of Justice. The DOJ suit is set to begin in February.

Also read: AT&T's T-Mobile Deal: Could the Election Tip the Scales Again? (Updated)

The FCC will still circulate some of its findings given that AT&T continues to pursue the union. That is not what AT&T and Deustche Telekom want to hear since many thought one of the reasons they withdrew the application was to prevent some of that analysis from becoming public.

The FCC said it was releasing the analysis because it would be "unfair to the parties and participants [...] who have invested significant time and resources" not to do so. It is also doing so for the sake fo trasnparency and because the analysis "remains highly relevant."

A government official said that those findings include the calculation that the deal would hurt competition in 99 of the 100 top markets in the country and would grant AT&T too large a percentage of spectrum in 274 market areas (covering 66 percent of the country's population).