AT&T Pulls FCC Application For T-Mobile Merger

Two days after the FCC announced it intends to hold a rare administrative hearing on AT&T’s proposed purchase of T-Mobile USA, the folks at the Death Star have decided to pull their merger application to the regulator, at least until the end of its legal battle with the Dept. of Justice.

Additionally, AT&T has announced that it is setting aside $4 billion ($3 billion in cash and $1 billion in spectrum) to cover the penalties it would have to pay T-Mobile parent company Deutsche Telekom if the deal falls through.

Here’s the explanation from Darth Vader’s desk:

AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending… or alternate means.

The DOJ trial is currently slated to start in mid-February. If the deal survives that process, AT&T says it will then revisit getting approval from the FCC.

Earlier this week, the FCC declared its intention to hold an administrative hearing, essentially a trial wherein AT&T would need to prove that the merger is in the public interest, at the conclusion of the DOJ trial.