Update on the AT&T/T-Mobile Merger

Law Seminars International TeleBriefing – 
Colleen Boothby.  

On March 20, 2011, AT&T, Inc., entered into a stock purchase agreement with Deutsche Telekom AG for the acquisition of Deutsche Telekom’s T-Mobile USA subsidiary in exchange for approximately $39 billion in cash and stock. According to press reports, the acquisition would solve AT&T’s potential spectrum exhaustion problem while extending its 4G LTE deployment to 95% of the U.S. population (including T-Mobile’s 34 million subscribers).

Surprisingly, on August 31, 2011, the U.S. Department of Justice (DOJ) filed a complaint against AT&T with the U.S. District Court for the District of Columbia seeking to enjoin the merger, alleging that the proposed acquisition of T-Mobile would substantially lessen competition and likely raise prices.

Both AT&T and Deutsche Telekom have announced their disappointment with the DOJ action and their intention to vigorously contest it. The DOJ has apparently indicated that it remains open to continued discussions with the parties. Meanwhile, the FCC, whose approval is also required for the merger, has suggested that it too had concerns with the merger. Importantly, in the event that the stock purchase agreement is terminated because of failure to obtain regulatory approval, AT&T may become obligated to pay a “break up” fee of some $3 billion in cash, as well as transferring certain AWS spectrum to (and entering into a roaming agreement with) Deutsche Telekom.

Much is at stake, both for the parties and for the rest of the mobile industry. In this 90-minute TeleBriefing, our distinguished panel of experts will assess the proposed acquisition, evaluate the likely outcomes, and address the various practical implications for industry.

What Was Discussed

• Federal agency involvement in US Telecom Merger Review: DOJ vs. FTC vs. FCC — which agency does what
• Differing agency review standards: DOJ (Clayton Act) and FCC (Section “214” and Wireless License Transfer Approval)
• The potential for judicial review of agency action
• The grounds for appeal (e.g., Oracle v. PeopleSoft)
• The possibility for resolution by way of a negotiated compromise (consent decree)
• What the FCC is likely to do in light of the DOJ complaint
• Implications for the parties (and for industry) if the acquisition is blocked
• What comes next: likely outcomes, and their implications for the mobile industry

Agenda
Tuesday, September 20, 2011
10:00 am Pacific, 1:00pm Eastern
Introduction & Transaction Overview

Walt Sapronov, Esq., Moderator
Sapronov & Associates, P.C. / Atlanta, GA

Industry Assessment

Scott Cleland, President
Precursor LLC / Washington, DC

Enterprise Customer Perspective

Colleen Boothby, Esq.
Levine Blaszak Block & Boothby LLP / Washington, DC

Antitrust Issues

David F. Smutny, Esq.
Orrick Herrington & Sutcliffe LLP / Washington, DC

11:30 am Pacific, 2:30 pm Eastern
Q & A (for up to 30 minutes)

Our Distinguished Panel
Walt Sapronov, a partner at Sapronov & Associates, P.C., has represented clients in telecommunications transactions and regulation for over 30 years. He has been named in the “International Who’s Who of Telecom Lawyers”. His experience includes representation of mobile service providers and institutional investors in telecommunications control transfers, finance, and regulatory approvals for M&A transactions.

Colleen Boothby is a partner in the firm of Levine, Blaszak, Block & Boothby, LLP, where she advises enterprise customers and IT providers on a wide variety of regulatory, business, and litigation matters. She joined the firm after ten years at the FCC and has represented numerous companies (including IBM, Microsoft, First Data, and GE Capital Communication Services) and associations (including the Ad Hoc Telecommunications Users Committee, the Internet Access Coalition, the Clearing House, the High Tech Broadband Coalition, and the Information Technology Industry Council ) in state and federal matters.

Scott Cleland is President of Precursor LLC, a Fortune 500 research consultancy focused on the future of Internet competition, privacy, security, property rights, innovation and algorithmic markets. Mr. Cleland is author of the book: Search & Destroy: Why You Can’t Trust Google Inc. As a Forbes contributor, he writes the Tech Capitalist blog. Mr. Cleland also authors the widely-read www.PrecursorBlog.com; publishes www.GoogleMonitor.com; and serves as Chairman of www.NetCompetition.org, a pro-competition e-forum supported by broadband interests. Eight Congressional subcommittees have sought Mr. Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent telecom analyst. He has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily.

David F. Smutny is a partner at Orrick Herrington & Sutcliffe LLP and a member of the firm’s Antitrust and Competition Group. Mr. Smutny has extensive experience in antitrust litigation, counseling and government investigations. He has practiced antitrust law since 1990, and his work has spanned a variety of industries including: telecommunications, media, computer software, petroleum refining and distribution, healthcare, biotechnology/pharmaceutical, defense procurement, advertising, banking and securities.