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FCC Chair Defends Release of Draft AT&T–T-Mobile Report

FCC Chairman Julius Genachowski indicated Wednesday that
the FCC did not release a staff report detailing its objections to the
AT&T–T-Mobile deal to reduce the deal's chances at the Justice Department,
but because it was always meant to be public and to release it was only fair to
all parties. AT&T has argued the release of the draft report was improper.

The report, which was released even though the FCC
withdrew the merger application at AT&T's request, questioned the premise
that AT&T's upgrade of its mobile wireless service would create jobs. A
reporter asked the chairman at a press conference after the FCC's public
meeting Wednesday whether that presumed job creation wasn't also part of the
FCC's presumption in pushing for a national broadband plan and spectrum

Genachowski said they were two different situations. One
was a horizontal merger with billions of dollars of claimed efficiencies, and
the other modernization of programs to get broadband to millions of people who
don't already have it. FCC staffers in a briefing on the report the day before
had also made the point that there was a difference between job claims from
simply boosting speeds and ones from going from no broadband to broadband.

Asked whether the FCC released the report as a way to
decrease the odds that the deal would be approved by Justice, Genachowski said
that the report was released because it had been "developed for public
release in an important matter that remains highly relevant." He pointed
out that AT&T had signaled it planned to re-file the application at a later
date. "The FCC still has the responsibility ultimately to approve any
transaction," he said. "The reasons to release it were fairness to
all the parties that have participated in the proceeding, and transparency."

Genachowski said he would not speculate on what might
happen next with the deal.

AT&T has taken issue with the release of the report,
arguing that its withdrawal of the application should have ended the FCC's

"The FCC has recognized that it is required by its own
rules to dismiss our merger application. This makes all the more troubling
their decision to nonetheless release a preliminary staff report on the
merger," said AT&T senior EVP Jim Cicconi in a statement Tuesday after
the report was published online. "This report is not an order of the FCC
and has never been voted on.  It is simply a staff draft that raises
questions of fact that were to be addressed in an administrative hearing, a
hearing which will not now take place.  It has no force or effect under
law, which raises questions as to why the FCC would choose to release it. The
draft report has also not been made available to AT&T prior to today, so we
have had no opportunity to address or rebut its claims, which makes its release
all the more improper. "