AT&T Will Not Buy T-Mobileby Andrew Cunningham on December 19, 2011 5:00 PM EST
AT&T has dropped its plans for a proposed $39 billion buyout of T-Mobile, citing interference from the FCC and the U.S. Department of Justice, the latter of which filed to block the merger back in August. AT&T will pay Deutsche Telekom, T-Mobile's parent company, $4 billion in recompense, and will enter into a "mutually beneficial roaming agreement" with the company at an unspecified future date.
AT&T will continue to invest in its network through a series of smaller deals, and calls on the FCC to approve its standing request to purchase unused Qualcomm spectrum - Verizon has taken similar steps to buy wireless spectrum from other companies in a series of smaller transactions, rather than buying out its competitors outright. AT&T also claims that regulatory interference is hindering its ability to meet its customers' needs, and calls on legislators to both "enact legislation to meet our nation's longer-term spectrum needs" and get out of the way so that "companies are allowed to react quickly to customer needs and market forces."
While AT&T says that the buyout's dissolution is bad for consumers, the government sees things differently - when the DoJ filed to block the AT&T merger, it said that T-Mobile represented an important competitive force in the cellular market, and its purchase would make it next to impossible for Sprint, the U.S.'s third-largest carrier, to compete with Verizon and AT&T.