AT&T was caught off guard by the release of a FCC staff report that took issue with claims made by AT&T that the acquisition of T-Mobile would bring about certain benefits, including increasing the amount spectrum available to the carrier, the repatriation of 5,000 call center jobs, and the creation of hundreds of thousands of indirect jobs.
AT&T took immediate issue with the release of the report. Jim Cicconi, AT&T Senior Executive Vice President-External and Legislative Affairs, stated that “The FCC has recognized that it is required by its own rules to dismiss our merger application. This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger. This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.”
The move by the FCC to release its draft report raises another issue, that being whether the decision was motivated by politics versus regulatory necessity. Releasing a report that has not been challenged by a hearing process gives the impression that the FCC has been biased against the transaction for some time. Did AT&T ever have a chance?
Also, did the public ever have a chance? There is no evidence that the report has been released to the public for review and comment. Given information being presented in the media, it is not too far a leap to conclude that the Justice Department is aware of the findings and that this knowledge may result in reducing the likelihood of a settlement.
In short, what did the FCC hope to gain by releasing the report?