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AT&T/T-Mobile merger flopped despite governor, advocacy support

Despite galvanizing governors and special interest groups, AT&T has given up on owning T-Mobile and its tantalizing prize of broadband spectrum--nine months after shocking the U.S. with news of the proposed buyout.

AT&T, T-Mobile's broken merger

From the outset, it appeared that AT&T had all the political elbow grease it needed to complete its ultimately failed takeover of rival carrier T-Mobile.

Yet pressure from Sprint, the Department of Justice (DOJ), antitrust interests, and finally the Federal Communications Commission (FCC) had AT&T fighting to revise the terms of its buyout proposal. Today, after a nine-month drama of diminishing opportunities to pass the merger, AT&T finally threw in the towel.

Although the deal may have been doomed for some time, early signs pointed to AT&T pocketing T-Mobile's assets. It had the cash ($39 billion, to be precise), the support of T-Mobile parent company Deutsche Telekom, and good friends in the form of lawmakers and policy advocates of all levels.

Here's an overview of some of the most notable supporters (and detractors) of AT&T's acquisition with T-Mobile.

As of June, 76 of approximately 200 democrats in the House of Representatives supported AT&T's annexation of T-Mobile for the sake of hurrying along the carrier's widespread deployment of 4G LTE.

Sprint CEO Dan Hesse was a fervent and vocal agitator against the AT&T and T-Mobile merger. Kent German/CNET

A group of 15 House democrats even went as far as drafting a letter asking President Obama to intercede with the Justice Department on AT&T's behalf.

Back in August, House Representative Lamar Smith (R-Texas) spoke out against anti-merger arguments that told "only one side of the story." Creating jobs and encouraging innovation among a smaller cast of wireless competitors were two benefits Smith cited.

Meanwhile, Sen. Herb Kohl (D-Wis.), leader of the Senate Judiciary Antitrust Subcommittee, spoke out against the merger on the grounds that it would stifle competition. Other lawmakers--like Reps. John Conyers (D-Mich.), Anna Eshoo (D-Calif.), and Ed Markey (D-Mass.)--went on record to question a "troubling backward step" that could lead to "a duopoly in the wireless marketplace."

State governors
27 state governors went on record to support the merger, ranging from Arizona to West Virginia. All wrote letters to the FCC from May to August, 2011 spelling out how consolidating the No. 2 and No. 4 U.S. wireless carriers would benefit their constituents. Most justifications echoed AT&T's own--chiefly fewer dropped calls and expanded network coverage, especially to rural or more tucked-away communities. Again, speedier LTE deployment across the U.S. was another cited perk. (See the chart at the end for the complete list of governors in favor of the merger.)

Attorneys general
The attorneys general of 11 states submitted a joint letter to the FCC on July 27 to cast their lot with AT&T: Arkansas, Alabama, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia, and Wyoming.

Although support was strong in AT&T's favor, as in all levels of politics, there was also a strong current of dissent. In March, New York Attorney General Eric Schneiderman revealed his intentions to review AT&T's proposal with an eye on competition. More recently, on September 16, the attorneys general of California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, and Washington submitted their opposition to the FCC.

These advocacy groups supported AT&T's T-Mobile buyout.
LULAC, GLADD, and the NAACP supported AT&T's T-Mobile buyout. Composition by Jessica Dolcourt/CNET

Advocacy groups
A diverse group of advocacy organizations also took AT&T's side. The Communication Workers of America, a union of telecommunications workers, estimated that buying up T-Mobile would generate 100,000 new jobs. (AT&T estimated that it could create 5,000.) Other groups included the NAACP, GLADD, and the Sierra Club.

Governors in favor

Action taken? Who sent it? Date
Alabama Letter to FCC (All letters are in PDF format) Gov. Robert Bentley (R) June 14
Arizona Letter to FCC Gov. Jan Brewer (R) June 20
Arkansas Letter to FCC Gov. Mike Beebe (D) May 23
Colorado Letter to FCC Gov. John Hickenlooper (D) May 27
Connecticut Letter to FCC Gov. Dannel P. Malloy (D) June 10
Delaware Letter to FCC Gov. Jack Markell (D) June 8
Florida Letter to FCC Gov. Rick Scott (R) June 22
Georgia Letter to FCC Gov. Nathan Deal (R) May 17
Idaho Letter to FCC Gov. C.L. Otter (R) May 17
Iowa Letter to FCC Gov. Terry Branstad (R) May 26
Kentucky Letter to FCC Gov. Steve Beshear (D) May 26
Louisiana Letter to FCC Gov. Bobby Jindal (R) May 19
Maine Letter to FCC Gov. Paul LePage (R) May 19
Maryland Letter to FCC Gov. Martin O'Malley (D) June 20
Michigan Letter to FCC Gov. Rick Snyder (R) May 19
Missouri Letter to FCC Gov. Jay Nixon (D) August 12
Nevada Letter to FCC Gov. Brian Sandoval (R) May 27
North Carolina Letter to FCC Gov. Beverly Perdue (D) May 31
North Dakota Letter to FCC Gov. Jack Dalrymple (R) July 1
Ohio Letter to FCC Gov. John Kasich (R) June 9
Oklahoma Letter to FCC Gov. Mary Fallin (R) May 16
South Carolina Letter to FCC Gov. Nikki Haley (R) May 21
South Dakota Letter to FCC Gov. Dennis Daugaard (R) June 20
Tennessee Letter to FCC Gov. Bill Haslam (R) May 27
Texas Letter to FCC Gov. Rick Perry (R) May 25
Vermont Letter to FCC Gov. Peter Shumlin (D) June 20
West Virginia Letter to FCC Gov. Earl Ray Tomblin (D) June 21