Cheshire Cat Photo Blog(...said the Cat: 'we're all mad here....')

AT&T is calling off the deal to acquire T-Mobile for $39 billion and will pay a $4 billion pre-tax charge as part of the breakup fee. AT&T’s news release cited the opposition of the Department of Justice (DOJ) and the Federal Communications Commision as the reasons for canceling the deal. DOJ and FCC had said that the acquisition would result in less competition in the wireless industry and perhaps higher prices for consumers.

AT&T said that the acquisition would have provided a short-term workaround to the bandwidth shortage.

“The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage,” the company said in its statement.  “In the absence of such steps, customers will be harmed and needed investment will be stifled.”

More good news occurred earlier, on last Thursday, when a California Public Utilities Commission administrative judge, Jessica Hecht, eliminated an upcoming deadline in the investigation of how the proposed acquisition would affect California consumers, in anticipation of the announcement of AT&T abandoning the deal.

Op-ed pieces applauded the cancellation of the deal, calling the cancellation “… an important win not just for a competitive marketplace but also for newly reinvigorated regulatory agencies that, for the first time in a long time, have ruled that bigger isn’t always better when it comes to telecom services.” One noted, with regard to AT&T’s assertion that the deal was the best way for customers to enjoy faster data speeds and fewer dropped calls:

“That pitch unraveled in August when AT&T acknowledged to the FCC that it would cost about $3.8 billion to increase its own network to cover 97% of the country. In other words, it could achieve the same goals for customers at a fraction of the cost of climbing into bed with T-Mobile.”

As for CNET, Roger Cheng jumped in with a “What’s a T-Mobile to do?” piece that highlights some of his comments from an earlier post.

As for me, I’ve learned not to rejoice too much. When evil collapses in one place, as with the death of Kim Jong-Il, it is always quick to spring up somewhere else, or even in the same place.

We should learn to be as quick to enjoy the small victories that come along.

-Bill at

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