US wireless carrier AT&T's proposed $39 billion acquisition of T-Mobile USA is expected to run into a lot of legal and antitrust hurdles before the US Justice Department and the Federal Communications Commission approves it.
An FCC official commented that the organisation will not 'rubber stamp' the deal and AT&T faces a 'steep climb' before it can get the approval, according to a report on The Wall Street Journal. FCC officials have been known to give such warnings before, but usually ends up approving the deal in the end.
AT&T could be barred from acquiring the Deutsche Telekom subsidiary if the government investigation determines that the deal would harm competition.
Reports out of Washington confirm that it could be a year before the AT&T and T-Mobile deal is given the nod from regulators. US authorities are expected to study the market impact of the acquisition which includes determining its affect on competition, consumer choices and prices.
Meanwhile, AT&T rival Sprint has claimed that the merger will combine the second and the fourth largest wireless carriers, forming a company three times the size of Sprint. It is evident that rivals will try everything in their power to stop the acquisition but AT&T is known for its political clout in Washington and its team of highly competent lawyers.