Public policy groups accuse AT&T of merger ‘gamesmanship,’ call for release of FCC docs

[Corey]

Putting it simply, AT&T’s planned purchase of T-Mobile USA is beginning to sound like a game of chess (with a sprinkle of politics, of course). Public Knowledge and Media Access Project requested Tuesday that the Federal Communications Commission release documents related to AT&T’s planned $39 billion acquisition of T-Mobile USA. The two public policy groups argue that “the public deserves for the Commission’s determinations to see the light of day.” AT&T recently withdrew its acquisition application from the FCC to focus on a lawsuit brought against the merger by the Department of Justice. The organizations believe AT&T pulled its application so that it can “seek a favorable decision” in federal court and then use that ruling to win the FCC’s approval. Read on for more.

Despite that viewpoint, there are several experts who believe AT&T will have to put everything on the table to win its case against the Justice Department, and a recent report suggested AT&T will offer to divest 40% of T-Mobile USA in an effort to win its case against the DOJ.

“This type of litigation gamesmanship wastes the resources of both the Commission and the federal court system,” Media Access Project and Public Knowledge said in a joint statement on Tuesday. “The Commission’s application dismissal rules are not designed to indulge this kind of behavior, and the Commission is well within its authority to protect the integrity of its procedures, deny the request, and move forward with its evidentiary investigation.”

The two groups argued that AT&T is “exhausting” limited resources and said it would be against public interest for AT&T to re-file with the FCC after its opponents, such as Sprint, have already spent valuable resources trying to fight the deal. The full joint press release follows below.

Public Knowledge and Media Access Project Accuse AT&T Of ‘Gamesmanship’ On Merger Application; Call For Release of FCC Order

November 28, 2011

Public Knowledge (PK) and Media Access Project (MAP) said today that AT&T and T-Mobile were engaging in “litigation gamesmanship” in the companies’ attempt to withdraw their merger application from the Federal Communications Commission (FCC).

In a filing with the FCC, the groups also said that the Commission’s order designating the transaction for a formal hearing should be released because “the public deserves for the Commission’s determinations to see the light of day.”

The filing is here.

The companies have said they have said the FCC has no authority to act on their withdrawal.  PK and MAP disagree.

The companies have said publicly they aren’t withdrawing their application because they are reconfiguring their business deal, but “rather because they intend to seek a favorable decision in federal court, which the companies can then use to pressure the Commission to approve the merge,” according to the filing from PK and MAP.

The groups added:  “This type of litigation gamesmanship wastes the resources of both the Commission and the federal court system. The Commission’s application dismissal rules are not designed to indulge this kind of behavior, and the Commission is well within its authority to protect the integrity of its procedures, deny the request, and move forward with its evidentiary investigation.”

“AT&T must not be allowed to triumph through use of its bottomless war chest when the facts are so clearly against it. To allow AT&T to exhaust the far more limited resources of public interest opponents by withdrawing the application at the end of the process, only so that it can refile under more favorable conditions after its opponents have spent their resources, is clearly contrary to the public interest,” PK and MAP said.

FCC rules not only allow the Commission wide latitude to determine what to do with the withdrawal application, they also allow the Commission to make public the voluminous order setting the takeover for a formal evidentiary hearing, PK and MAP said. They suggested that the Commission could issue an order releasing the FCC’s study of market conditions contained in the hearing order while at the same time requiring any future merger filings at the FCC from the companies be automatically designated for hearing while incorporating all of the evidence already filed.

 

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