AT&T deal to acquire T-Mobile may find FCC approval difficult

An FCC official told the Wall Street Journal that AT&T's effort to acquire T-Mobile may face steep resistance to gain approval from the regulatory body. The comments echo similar concerns of some on the left who are leery of less competition in the wireless market.

"There's no way the chairman's office rubber-stamps this transaction," the source said, declining to be named in the story. "It will be a steep climb to say the least." That said, the FCC has done little to block recent blockbuster mergers -- most notably Sirius and XM Satellite Radio's $13 billion merger in 2007.

Consumer advocates at the time criticized the deal, noting that post merger there would effectively be no competition in the nascent satellite radio market. The FCC approved the merger the following year, only being forced to make programming and price concessions, as well as pay fines related to either's use of their terrestrial repeaters with proper licensing.

While officials at the nation's communications regulator seem to be ready to discuss the possible merits of the merger, it should be noted that the FCC hasn't even begun any formal inquiry into the deal's merits. The WSJ did not specify in what capacity its source serves, so it is hard to judge whether this person's opinion would have much pull in any final decision.

The FCC is widely expected to approve rules however shortly that would require larger operators to allow roaming on their networks by smaller carriers at reasonable rates. The action could put the smaller carriers on a more even keel with its bigger competitors, which could also increase competition in the wireless space.

Any review is widely expected to take at least a year if not longer. The Justice Department will also need to give its approval as well, meaning approval if it happens could be a long ways off.

"We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction," an AT&T spokesperson told the WSJ. "We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish."