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AT&T's merger with T-Mobile teeters

week in review AT&T earmarks $4 billion for merger breakup fee, while Facebook phone rumors resurface. Also: Pepper-spray cop meme.

week in review In the face of regulatory resistance, AT&T appears to be bracing for the end of its intended $39 billion merger with T-Mobile.

AT&T said this week that it will take a $4 billion accounting charge in the fourth quarter to cover a breakup fee to T-Mobile should the deal fail to gain regulatory approval. AT&T and T-Mobile parent Deutsche Telecom also said they've withdrawn their pending approval applications to the Federal Communications Commission "to facilitate the consideration of all options at the FCC and to focus [the companies'] continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending before the United States District Court...or alternate means."

The move comes as the chairman of the FCC said he doesn't believe that AT&T's proposed $39 billion deal to acquire T-Mobile USA is in the public interest. And he's asking the other four commissioners to approve an administrative hearing, in which AT&T would have to prove otherwise.

In a briefing with reporters, FCC officials said that their evaluation of the deal found that the merger between AT&T and T-Mobile would create an "unprecedented" level of concentration in the wireless market. Officials went on to say that it was impossible to see how the deal could serve the public interest.

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