AT&T DROPS BID TO ACQUIRE T-MOBILE

AT&T says it is ending its $39 billion bid to buy T-Mobile USA after facing fierce government objections. AT&T's purchase of T-Mobile from Deutsche Telekom of Germany would have made it the largest cellphone company in the U.S. AT&T is currently the country's second-largest wireless carrier, while T-Mobile is the fourth-largest.
The Justice Department sued to block the merger on Aug. 31, saying it would reduce competition and lead to higher prices. Last month, the companies withdrew their application to the Federal Communications Commission after its chairman also opposed the deal.

It is unclear if AT&T will still have to pay T-Mobile the exhorbitant break up fee or not. Also in question is the rumor about AT&T and T-Mobile creating a joint venture.

AT&T TO THROTTLE TOP DATA USERS

AT&T has stated they will begin to throttle the top 5% of data users down to 2G (whatever that is) speeds. Users will be notified via text message. The text message states "Your data usage is among the top 5 percent of users. Data speeds for the rest of your current bill cycle may be reduced.”

It’s unknown how much data you must consume to make it into the 5 percent affected by the throttling; however, AT&T has made it clear in the past that this move should only effect jailbreakers on unlimited plans who are using tethering hacks to get around subscribing to AT&T’s official tethering plan.

AT&T RANKS WORST CARRIER IN CUSTOMER SATISFACTION FOR SECOND STRAIGHT YEAR

AT&T has again received the lowest rating in Consumer Reports’ annual wireless carrier customer satisfaction survey. Verizon Wireless won the top spot and its customers were most satisfied with its data service and staff knowledge. Verizon was followed by Sprint and T-Mobile USA. “Our survey indicates that subscribers to prepaid and smaller standard-service providers are happiest overall with their cell-phone service,” Consumer Reports electronics editor Paul Reynolds said. “However, these carriers aren’t for everyone. Some are only regional, and prepaid carriers tend to offer few or no smart phones. The major carriers are still leading options for many consumers, and we found they ranged widely in how well they satisfied their customers.” Consumer Reports surveyed 66,000 of its subscribers and included standard and no-contract wireless customers across 22 metropolitan areas.

AT&T WITHDRAWS T-MOBILE MERGER APPLICATION FROM FCC

The Federal Communications Commission on Tuesday granted AT&T permission to withdraw its application to purchase T-Mobile USA for $39 billion. Two public policy groups, Public Knowledge and Media Access Project asked the FCC to publish its documents relating to the deal and to prevent AT&T from rescinding its application, although it appears it’s too late for that to happen. AT&T announced its intention to withdraw its application to purchase T-Mobile USA on November 24th when it explained that it was going to instead focus on a lawsuit brought against it by the Department of Justice. That case is expected to kick off in February. Should AT&T win, it is likely the wireless carrier will re-file its application with the FCC and begin its acquisition process all over again.

FCC RELEASES PUBLIC REPORT ON AT&T/T-MOBILE MERGER; NOT GOOD NEWS FOR AT&T

The Federal Communications Commission released a 109-page report on Tuesday evening that provides a great deal of insight into what the government agency thought of AT&T’s planned acquisition of T-Mobile USA. However, AT&T believes it is questionable exactly why the government agency decided to release the report since, hours before the report was released, AT&T successfully withdrew its merger application. The FCC said that the acquisition would give AT&T a “unilateral incentive” to increase its prices, which could have had an echo effect on the industry should Sprint and Verizon Wireless follow suit, The Wall Street Journal said. Read on for more.

AT&T promised the deal would create thousands of jobs and that it would bring back 5,000 call center jobs from overseas. The Communications Workers of America also argued the merger could create as much as 96,000 jobs for Americans. Even still, the FCC argued in the report that the acquisition would “result in a net loss of direct jobs.” As one might imagine, AT&T isn’t pleased with the FCC’s decision to release the report.

“The FCC has recognized that it is required by its own rules to dismiss our merger application,” AT&T senior executive vice president of external and legislative affairs Jim Cicconi said. “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.”

AT&T WILLING TO MAKE HUGE CONCESSIONS TO ACQUIRE T-MOBILE'S USA ASSETS

AT&T may propose to divest as much as 40% of T-Mobile USA’s assets in an effort to win approval from the Department of Justice in an upcoming lawsuit against the government agency. The DOJ sued to block the merger on August 31st, when it said “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.” AT&T is planning to divest a lower percentage of spectrum and a higher share of T-Mobile USA’s customers, Bloomberg said Monday. The divestiture may not be enough to add balance to the market, however. “It’s unlikely that the DOJ would allow a big competitor like Verizon to purchase the assets,” Macquarie Securities analyst Kevin Smithen told Bloomberg, which means AT&T may need to rely on smaller regional carriers to pick up the customers and spectrum.

“[DOJ] guidelines require that any settlement or remedy replace the market power T-Mobile currently brings to the marketplace,” Sprint’s spokesperson for public policy John Taylor wrote on his personal blog. “Any new entity would have to create a nationwide network comparable to T-Mobile’s, which covers 97% of America… [and] offer exclusive handsets, just as T-Mobile does each year. AT&T would have to divest enough T-Mobile customers to ensure that any new entity or purchaser of the assets would have the same market share T-Mobile enjoys.”

Wall Street isn’t so sure the divestiture will help AT&T’s cause, either. “Realistically, AT&T is going to take its chances in court in February,” Sanford C. Bernstein analyst Craig Moffet said. “It’s all or nothing.”

On November 24th, AT&T withdrew its original application from the FCC to acquire T-Mobile USA and said it will instead focus on its lawsuit with the Department of Justice, which kicks off in February, before it reapplies for the FCC’s approval of the acquisition.

AT&T/T-MOBILE DEAL WILL CLOSE LATER THAN EXPECTED

AT&T has pushed back the date it expects to close the books on its planned merger with T-Mobile and spectrum purchase from Qualcomm, The Wall Street Journal reported on Friday. The carrier had originally planned to close both acquisitions by March of 2012, although it now expects the required approvals to take as much as three months longer to gain. The carrier now says the deal should be approved by the end of the first half next year. AT&T recently ran into speed bumps with both deals. In August the Federal Communications Commission announced that it would review both AT&T’s spectrum purchase from Qualcomm and its merger with T-Mobile USA at the same time. Later that month, the U.S. government sued AT&T in an effort to block the T-Mobile acquisition. AT&T has argued that the T-Mobile purchase will provide jobs and improve wireless service for Americans. It also responded to the FCC lawsuit, saying it will “vigorously contest [the] matter in court.”

AT&T 4G LTE COMING TO NEW YORK SOON

Speaking during the Mashable Media Summit on Friday, AT&T’s senior vice president of communications Larry Solomon confirmed that AT&T will activate its 4G LTE network in New York City “very soon.” AT&T’s 4G LTE network is currently live in Atlanta, Chicacgo, Dallas-Forth Worth, Houston and San Antonio, and the carrier plans to activate the network in Athens, Boston, Baltimore and Washington, D.C. on Sunday, November 6th.

METROPCS IN TALKS TO ACQUIRE POST AT&T/T-MOBILE MERGER ASSETS

The likelihood of a successful acquisition of T-Mobile by AT&T may largely depend on what the latter is willing to give up. The largest GSM carrier in the US may need to throw a few assets overboard in order to satisfy the Department of Justice, and has reportedly been Rethinking Possible by engaging in discussions with several parties interested in scooping up the leftovers. According to Bloomberg, MetroPCS appears to be the frontrunner in the talks, and plans to meet with the Justice Department (alongside AT&T, of course) in the next two weeks to determine if the strategy will appease the regulating body. No guarantees here, of course: it seems like a lot of assets would have to change hands for MetroPCS -- a regional carrier with roughly nine million subscribers -- to be considered a large enough competitor to assuage the government's concerns here. We can't imagine the Feds would be satisfied with any small offering, considering the Department's filed a lawsuit against Ma Bell to block the merger.

FCC SAYS AT&T HAS FAILED TO SHOW HOW T-MOBILE MERGER WILL CREATE JOBS

Rick Kaplan, chief of the Federal Communication Commission’s Wireless Telecommunications Bureau, sent a letter to AT&T on Thursday asking the carrier to clarify just how the proposed merger with T-Mobile USA will add jobs in the United States. “Our review of the information currently in our record suggests that AT&T’s responses on this issue remain incomplete,” Kaplan said. The FCC is giving AT&T until October 31st to address fully “all plans, analyses and reports discussing the creation or loss of jobs” if the merger is approved. AT&T must also disclose how many T-Mobile USA jobs will be eliminated and show how the merger will affect employment inside and outside of the United States during the next five years. AT&T CEO Randall L. Stephenson argued earlier this year that the proposed merger would be a “net job grower” in the United States. On August 31st, AT&T promised to bring 5,000 jobs back to the United States if the merger is approved, which was the same day the U.S. government filed a lawsuit in opposition of the deal.

VERIZON CEO STICKS UP FOR AT&T'S ACQUISITION OF T-MOBILE

Verizon Communications chief executive Lowell McAdam has gone on record in suggesting that the company’s biggest rival, AT&T, should be allowed to complete its proposed $39 billion acquisition of T-Mobile USA. “That match had to occur,” McAdam said at an investor conference on Wednesday, warning that the government has no choice but to allow such mergers unless it can focus on getting telcos the increased spectrum they need to operate. He continued, “We need to be very thoughtful on what the impacts would be to the overall industry if this is a way to regulate the industry without actually passing regulation.” Read on for more.

“I have taken the position that the AT&T merger with T-Mobile was kind of like gravity,” McAdam told investors. “It had to occur, because you had a company with a T-Mobile that had the spectrum but didn’t have the capital to build it out. AT&T needed the spectrum, they didn’t have it in order to take care of their customers, and so that match had to occur.” The CEO continued, noting that he has told the Federal Communications Commission and other government officials that blocking AT&T’s acquisition of T-Mobile without providing a solution to the current spectrum crunch will ultimately harm American consumers.

AT&T TO FINALLY LAUNCH FIRST SET OF4G MARKETS

During the Bank of America Merrill Lynch Media, Entertainment & Communications conference on Thursday, AT&T’s chief financial officer John Stephens said that AT&T will activate its 4G LTE network in its first five markets on Sunday, FierceWireless reported. The network has been active as part of a soft launch in the AT&T’s five markets, which include Atlanta, Chicago, Dallas, Houston and San Antonio.

Reports have shown a 4g tablet achieving download speeds around 22Mbps and screenshots of a 4G modem achieving 13Mbps download speeds in Chicago. In addition, the same modem reaching speeds up to 25Mbps in Atlanta. Of course all these have been on unloaded systems, so actual speeds may vary. AT&T hopes to activate its network in 15 total markets and launch its first LTE smartphone by the end of the year.

AT&T TO MAKE CONCESSIONS TO GET T-MOBILE

Now that the US government has moved to block its merger with T-Mobile, AT&T is gearing up for a long and potentially pricey legal battle with the Department of Justice. According to Reuters, however, the provider is also working on a settlement offer, in the hopes of bypassing the courtroom altogether. Sources close to the matter say AT&T will soon present its proposal to antitrust regulators, who are concerned that the company's purchase of T-Mobile may hinder market competition. Details on the proposal remain vague, though it will likely include promises to keep T-Mobile's low-cost data and calling plans, along with pledges to sell off some of its own assets. But some insiders say the carrier may have to sell up to 25 percent of T-Mobile's business in order to put regulators' minds at ease. AT&T has yet to comment on the report, though one of Reuters' sources claims that its lawyers are "pretty determined that they can find a solution, and they are pretty confident."

AT&T PROMISES TO BRING BACK 5,000 JOBS TO US IF GOVERNMENT APPROVES T-MOBILE MERGER

AT&T said on Wednesday that it promises to bring 5,000 of its outsourced call center jobs back to the United States if its proposed $39 billion acquisition of T-Mobile USA is approved by the FCC. AT&T also promised that it will not layoff any AT&T or T-Mobile call center employee who is employed at the time of the merger. In addition, AT&T will invest $8 billion in its U.S. infrastructure and the Economic Policy Institute has suggested that move could provide up to 96,000 new jobs. AT&T made its announcement hours before the United States Justice Department filed a lawsuit in an attempt to block the merger. “AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the Justice Department said. AT&T responded and said that “there was no indication” from the DOJ that a lawsuit was being contemplated. “We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court,” AT&T Senior Executive Vice President and General Counsel Wayne Watts said, noting that AT&T will continue to fight for the merger’s approval.

US GOVERNMENT FILES ANTI-TRUST SUIT AGAINST AT&T/T-MOBILE MERGER

The U.S. government sued to block AT&T Inc. (T)’s proposed $39 billion acquisition of T-Mobile USA Inc., saying the deal would “substantially lessen competition” in the wireless market. AT&T shares fell as much as 5 percent.

In the complaint filed today in federal court in Washington, the U.S. is seeking a declaration that Dallas-based AT&T’s takeover of T-Mobile, a unit of Deutsche Telekom AG (DTE), would violate U.S. antitrust law. The U.S. also asked for a court order blocking any arrangement implementing the deal. “AT&T’s elimination of T-Mobile as an independent, low- priced rival would remove a significant competitive force from the market,” the U.S. said in its filing.

Should regulators reject the deal, which would create the biggest U.S. wireless carrier, AT&T would have to pay Deutsche Telekom $3 billion in cash. It would also provide T-Mobile USA with wireless spectrum in some regions and reduced charges for calls into AT&T’s network, for a total package valued at as much as $7 billion, Deutsche Telekom said this month

RUMOR: AT&T VP SAYS iPHONE 5 LAUNCHING EARLY OCTOBER

According to a high-level AT&T source an AT&T Vice President has confirmed to several employees that the iPhone 5 is slated to launch in early October. Additionally, the VP communicated the following to a group of managers: “Expect things to get really, really busy in the next 35-50 days, so prepare your teams accordingly.” Apple is widely expected to announce the iPhone 5 in a late September event with a release set for early October.

RUMOR: SPRINT IN TALKS TO ACQUIRE CLEARWIRE

Bloomberg is reporting Clearwire is currently in talks to sell its business to Sprint, and perhaps secure the funding it so desperately needs for a network build out. According to several insider sources, the third place wireless carrier's considering a joint investment (amongst other options) with Comcast, Cablevision and Cox, that would give the cablers a bundled high-speed, wireless broadband competitive advantage, and Sprint an LTE boost in its battle against AT&T and Verizon's rival 4G networks.

None of the players in this rumored takeover have yet to comment on the purported transaction, although the business gossip has had quite an uplifting effect on Clearwire's shares.

VERIZON WIRELESS 4G LTE NOW AVAILABLE TO HALF OF US POPULATION; AT&T NOT SO MUCH

Verizon Wireless on Thursday announced that its lightning fast 4G LTE network now covers more than half of the U.S. population. We have repeatedly called Verizon’s LTE network the fastest cellular network we’ve ever used, and the fact that the carrier has been able to roll it out so quickly with only a few hiccups is nothing short of impressive. ”In eight short months we’ve introduced our 4G LTE network to more than half of the U.S. population, while continuing to offer the nation’s most reliable 3G network coast to coast,” said David Small, chief technical officer of Verizon Wireless, in a statement. “This matters to millions of Americans because they can take advantage of faster 4G LTE speeds both at home and when they travel throughout the country – today and in many more markets to come this year. Each new market and expansion is significant as it brings us closer to delivering on the promise to bring our 4G LTE network to more than 185 million Americans by the end of 2011.”

AT&T on the other hand has just started deploying its LTE in a limited number of markets.

AT&T DROPS MESSAGING PLAN OPTIONS FROM TWO TO ONE

Confirmed by multiple sources and just recently AT&T, the wireless carrier is trimming its individual messaging packages from two to one on August 21st. The Messaging Unlimited plan for $20, which means the $10 bundle that offers 1000 messages is being retired.

If you aren't keen to do much communicating within 160 characters, you'll be left with no other choice besides the pay-per-message option at twenty cents each (thirty cents for MMS). Fortunately, the Family Unlimited Messaging is left unscathed, continuing to offer all-you-can-eat texts for $30.

LEAKED: AT&T LETTER DAMAGES AT&T CASE FOR T-MOBILE ACQUISITION

Yesterday a partially-redacted document briefly appeared on the FCC website --accidentally posted by a law firm working for AT&T on the $39 billion T-Mobile deal (somewhere there's a paralegal looking for work today). While AT&T engaged in damage control telling reporters that the document contained no new information a careful review of the doc shows that's simply not true. Data in the letter undermines AT&T's primary justification for the massive deal, while highlighting how AT&T is willing to pay a huge premium simply to reduce competition and keep T-Mobile out of Sprint's hands.

While AT&T is busy telling regulators the deal will increase network investment by $8 billion, out of the other side of their mouth AT&T has been telling investors the deal will reduce investment by $10 billion over 6 years. Based on historical averages T-Mobile would have invested $18 billion during that time frame, which means an overall reduction in investment.

For the first time the letter pegs the cost of bringing AT&T's LTE coverage from 80% to 97% at $3.8 billion -- quite a cost difference from the $39 billion price tag on the T-Mobile deal. The push for 97% coverage apparently came from AT&T marketing, who was well aware that leaving LTE investment at 80% would leave them at a competitive disadvantage to Verizon. Marketing likely didn't want a repeat of the Luke Wilson map fiasco of a few years back, when Verizon made AT&T look foolish for poor 3G coverage.

The letter also notes that AT&T's supposed decision to "not" build out LTE to 97% was cemented during the first week of January, yet public documents (pdf) indicate that at the same time AT&T was already considering buying T-Mobile, having proposed the deal to Deutsche Telekom on January 15. In the letter, AT&T tries to make it seem like the decision to hold off on that 17% LTE expansion was based on costs. Yet the fact the company was willing to shell out $39 billion one week later, combined with AT&T's track record with these kinds of tactics, suggests AT&T executives knew that 80-97% expansion promise would be a useful carrot on a stick for politicians.

The reality appears to be that AT&T is giving Deutsche Telekom $39 billion primarily to reduce market competition. That price tag eliminates T-Mobile entirely -- and makes Sprint (and by proxy new LTE partner LightSquared and current partner Clearwire) more susceptible to failure in the face of 80% AT&T/Verizon market domination.

Regardless of the motivation behind rejecting 97% LTE deployment, the letter proves AT&T's claim they need T-Mobile to improve LTE coverage from 80-97% simply isn't true. That's a huge problem for AT&T, since nearly every politician and non-profit that has voiced support for the merger did so based largely on this buildout promise. It's also a problem when it comes to the DOJ review, since proof that AT&T could complete their LTE build for far less than the cost of this deal means the deal doesn't meet the DOJ's standard for merger-specific benefits. [Broadband Reports]