FCC sets wheels in motion to review AT&T/T-Mobile deal

The FCC started laying the procedural groundwork for what is expected to be an extensive review of AT&T's (NYSE:T) bid to purchase T-Mobile USA for $39 billion, and the two companies are expected to formally submit the deal for review later this month.

The FCC released a public notice and protective order that establishes the procedural framework for reviewing the deal. The public notice opens a docket for the proposed transaction, where documents can be filed ahead of AT&T and T-Mobile formally submitting their application to transfer T-Mobile's spectrum licenses to AT&T. The carriers' application is expected to be submitted sometime next week.

Once AT&T and T-Mobile submit their application, any meetings the companies have with the commission's staff will have to be disclosed--the rules require the companies detail the meeting's substance and not merely list the subjects discussed. The FCC also will open up a 180-day window for the public to comment on the proposed transaction.

AT&T's proposed purchase of T-Mobile faces challenges from public interest groups, several state attorneys general and Sprint Nextel (NYSE:S), which has vowed to try and block the deal.

The FCC will review whether the deal complies with all applicable laws and rules, and whether the companies can prove that the deal serves the public interest, convenience and necessity. Specifically, the FCC will have to consider how the deal will impact competition; the agency will analyze specific markets based on a so-called HHI screen--a standard measurement for market concentration--as well as a spectrum screen to determine if one company will have too much spectrum as a result of the deal.

The commission also will conduct its review in coordination with the Department of Justice, which must look over the deal for antitrust concerns.

AT&T and T-Mobile could come to the commission proactively with conditions that might help ease the review of the transaction. However, the FCC also will be able to impose conditions on the deal.

If the FCC finds that the deal does not serve the public interest, it is required to submit the deal to review by a hearing, where an administrative law judge of the FCC will conduct a kind of trial for the deal.

AT&T has said it expects the deal to close within a year. The FCC has given no specific timeframe for when it might rule on the deal.

For more:
- see this FCC public notice (PDF)
- see this FCC order (PDF)

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