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.

Source: AT&T

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  • danjw - Monday, December 19, 2011 - link

    Bah, T-Mobile is owned by Deutsche Telekom AG. So there is only one T-Mobile share holder. Now Deutsche Telekom AG shareholders may not be happy, but what does that have to do with competition in the US mobile phone service market? T-Mobile is struggling because Deutsche Telekom AG, doesn't want to put anymore money into it. But with the AT&T roaming agreement and this money, they may be able to improve their service enough to compete. That assumes that Deutsche Telekom AG, doesn't decide to keep the money.
  • danjw - Monday, December 19, 2011 - link

    One more thought, AT&T messed this up when they were caught lying to congress. They probably lost lots of supporters there. They told them that they needed the bandwidth to speedup their LTE roll out. But, then it came out they were slowing it down to justify the deal.
  • Wolfpup - Thursday, December 22, 2011 - link

    Sprint and T-Mobile seem to be competing fine.

    Neither is small, and I have no idea why people keep leaving Sprint out of Verizon/AT&T comparisons, when Verizon's only got like a third more subscribers.

    I don't even know if that counts Boost and Virgin or not, because if it doesn't Sprint might be about the same size.
  • Wolfpup - Thursday, December 22, 2011 - link

    Oh, and at least where I am, Sprint's coverage is way better than AT&Ts, though U.S. Cellular which is fifth place has far better coverage than anyone else.
  • gevorg - Monday, December 19, 2011 - link

    That $4 billion recompense could have been used to improve AT&T's 3G/LTE infrastructure.
  • DigitalFreak - Monday, December 19, 2011 - link

    Hence the reason this was never about "the network". It's always been about removing a competitor from the market.
  • Andrew.a.cunningham - Monday, December 19, 2011 - link

    By the same token, AT&T now has $35 billion it can use to improve its network now that it isn't buying T-Mobile. :-)
  • Hrel - Monday, December 19, 2011 - link

    Wow, I thought this would be one of the first comments. But hopefully Sprint and Tmobile will now merge or at least build a partnership; that way they could actually compete with Verizon/ATT. Sprint's prices (specifically Virgin Mobile which is the same thing) make ATT/Verizon look downright criminal. Then you consider the 19/month wifi oriented mobile carrier, I forget the name of right now.

    If the third and fourth place mobile carriers merged they'd gain a larger customer base, stronger network, more spectrum. I see this as the only logical next step. Most importantly I want to see strong competition in the market to drive down these INSANE 100+/month cell phone bills. I don't care how much you surf the internet, text or call people. Anything over 50/month per person is absolute ROBERY!!!!
  • claytontullos - Tuesday, December 20, 2011 - link

    Sprint and Tmobile have incompatible technologies.

    Verizon and Sprint have similar tech.
    ATT and Tmobile have similar tech.
  • dcollins - Tuesday, December 20, 2011 - link

    Everyone but Sprint is moving to LTE and even Sprint is headed there in the long term.

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