AT&T, T-Mobile tie up faces obstacles


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AT&T ( T ) offered to purchase Deustche Telekom's T-Mobile unit in the United States for $39 billion last week, but they'll have to convince a lot of skeptics first.

Many consumers are wary of the tie-up, which will reduce competition in a U.S. mobile market already characterized by a lack of choice. The merger will also face scrutiny from the Federal Communications Commission, according to the Wall Street Journal

There's no way the chairman's office rubber-stamps this transaction. It will be a steep climb to say the least," an unnamed official at the FCC official told the financial paper on Wednesday.

Several aspects complicate the acquisition. For one, AT&T and T-Mobile both emplo ythe GSM mobile standard, in contrast to the CDMA protocol employed by Verizon ( VZ ) and Sprint ( S ). The consolidation would bring every major GSM carrier under a single umbrella, forcing essentially every customer who wants a GSM phone to sign with the new combined provider.

Together, AT&T and T-Mobile would bring nearly 130 million subscribers under a single umbrella, making it the largest wireless service provider in the United States by far. Internet freedom advocates have already started raising issues tied to net neutrality and the potential prioritizing of data under new wireless plans.

The FCC "should reconsider its decision to largely exempt wireless broadband from its net neutrality Order," writes Matthew Lasar for Ars Technica.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Business , Economy , Technology , US Markets
Referenced Stocks: S , T , VZ

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