AT&T Drops Its Pursuit Of Rival Carrier T-Mobile

Wireless giant AT&T reportedly spent $40 million in ads alone to convince legislators, regulators and subscribers that its proposed merger with T-Mobile would be good for consumers and would create jobs. But the Justice Department filed suit to block the merger and then, the Federal Communications Commission came out against the deal.

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And a high-profile defeat for AT&T. The company has dropped its pursuit of rival T-Mobile.

As NPR's Joel Rose reports, AT&T failed to persuade regulators that the proposed merger would be good for consumers.

JOEL ROSE, BYLINE: When the $39 billion deal was first announced in March, AT&T said it needed T-Mobile's assets, especially its wireless spectrum, to satisfy its customers' growing hunger for data. CEO Randall Stephenson gave a number of interviews predicting that regulators would eventually sign off on the merger of the second and fourth biggest carriers in the wireless industry.

RANDALL STEPHENSON: So it's a very competitive marketplace. It's competitive before we do this transaction. It will be competitive after we do this transaction. So we're fairly confident this will get approved.

ROSE: Just in case, AT&T spent almost $40 million on advertising for the deal, and millions more lobbying for it. AT&T claimed the merger would create jobs, but critics weren't convinced.

Craig Aaron is president of the public interest group, Free Press.

CRAIG AARON: AT&T thought that they could get this deal done no matter what because of their political clout. But in the end, this was a deal that was going to cost jobs, not create them. It was going to leave people with less competition, not more competition.

ROSE: That's how regulators seemed to see it. In August, the Department of Justice sued to stop the deal; a few months later, the Federal Communications Commission signaled it would also move to block it, releasing a report that said the merger would likely lead to higher prices for consumers. So AT&T finally gave up. It will pay a $4 billion charge for walking away. Joel Rose, NPR News, New York.

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