FCC to reveal its concerns with AT&T's T-Mobile deal

The communications agency will approve AT&T's request to withdraw its application to acquire T-Mobile USA and nevertheless release a report expressing the issues it had with the deal.

AT&T suffered a minor blow to an already-hobbled campaign to acquire T-Mobile USA today, when the Federal Communications Commission decided that it would share its concerns about the deal.

The FCC plans to release a staff report detailing the concerns, according to The Wall Street Journal. AT&T did, however, win approval from the FCC to withdraw its application for the $39 billion acquisition.

The decision comes after AT&T on Thursday opted to withdraw the application and take a $4 billion charge to cover the possibility that the deal falls apart. The move sparked a bit of legal wrangling over whether the telecommunications giant could do so without the FCC's approval.

AT&T, meanwhile, had been fighting the release of the FCC report, which is expected to shed some light on why FCC Chairman Julius Genachowski pushed to get an administrative review of the deal, indicating a potential objection. The FCC's opposition would come on top of an existing Department of Justice lawsuit filed to block the merger. The trial is scheduled to begin in February.

AT&T and T-Mobile filed a letter to the FCC earlier today, requesting that the FCC report remain confidential. The information could be used in the Justice Department case against AT&T.

AT&T argued that because it was a preliminary report, it would be "improper" to publicly circulate it. It also complained that because the report wasn't made available to the company until today, it has had little chance to respond.

"This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger," said Jim Cicconi, executive vice presdient of external and legislative affairs. "This report is not an order of the FCC and has never been voted on."

A few public-interest groups, however, cheered the release of the report.

"AT&T attempted to forestall release of the staff's detailed findings of fact and law by pulling its application," said Andrew Jay Schwartzman, policy director at Media Access Project. "The public is entitled to know how its money was spent and to know what the FCC staff concluded."

The Wall Street Journal reported that agency officials said last week that they had found that the AT&T deal would "significantly diminish competition" and lead to job losses.

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