AT&T thought its muscular lobbying operation would ensure regulatory approval of its deal to buy T-Mobile, but it’s not working out that way. FCC Chairman Julius Genachowski moved to block the merger yesterday, giving the government a second chance to break up the sale should an antitrust suit from the Justice Department fail, the Washington Post reports. It’s a surprising move, because the FCC hasn’t tried to block a merger since 2002.
The FCC will hold a hearing on the motion after the Justice Department brings its case to court in February. While the Justice Department can only consider whether the deal would harm competition, the FCC can also consider whether the deal will eliminate jobs—Genachowski contends that it will, but AT&T says it will do the reverse. Should either effort break the deal, AT&T will be up a proverbial creek, obligated to pay T-Mobile $3 billion in cash and hand over part of its wireless spectrum. (Read more AT&T stories.)