This morning, AT&T issued a formal statement on the withdrawal of its application from the FCC regarding its merger with T-Mobile. The company had previously agreed to pay a $4 billion pre-tax charge in the case that its $39 billion takeover of T-Mobile failed to go through, $3 billion of which would go to Deutsche Telekom’s T-Mobile and another $1 billion going to the book value of spectrum access. Yesterday, on Thanksgiving Day here in the U.S., AT&T released a statement announcing its intention to withdraw its request from the FCC.
Today’s statement is meant to clear up misconceptions around its withdrawal request, namely that the FCC must approve it.
According to Wayne Watts, AT&T Senior Executive VP and General Counsel:
“Yesterday AT&T withdrew its application with the FCC for approval of our merger with T-Mobile. We took the required actions, announced this publicly, and filed securities disclosures accordingly. We believe the record will show that we withdrew our merger application before the FCC voted on the chairman’s proposed hearing designation order. It has since been reported that the FCC must approve this withdrawal. This is not accurate. The FCC’s own rules give us this right and provide that the FCC ‘will’ grant any such withdrawal. Further, this has been the FCC’s own consistent interpretation of its rules. We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”
In its previous statement, AT&T said that it still intends to seek the necessary FCC approval, so today’s clarification on whether or not the FCC needs to approve this request seems to be a message directly to the media.
The press had reported that when the FCC said it would begin further investigation of the merger application, AT&T pulled its request. Now, AT&T is making it clear that it withdrew its request before the FCC made the ruling that would have sent it over to an administrative law judge for review.
It seems that AT&T doesn’t want to see its request reviewed by the administrative law judge, so it was better for them to pull the request, regroup and resubmit the request instead of getting this one denied.