The FCC stalled its informal 180-day shot clock for the review of AT&T's buyout of T-Mobile USA yesterday after the wireless operator changed the economic models it used to justify the deal to regulators.
"Within the past week, AT&T has indicated that, since filing its public interest statement supporting its proposed acquisition of T-Mobile and its opposition comments to various petitions to deny the merger, it has developed new models upon which it now relies," Rick Kaplan, head of the FCC's Wireless Telecommunications Bureau, said in a Wednesday letter to AT&T representatives at Arnold & Porter. "Indeed, AT&T is now expressly relying on these models to bolster its arguments concerning the size of the efficiencies made possible by the merger as weighed against the potential anti-competitive effects."
The FCC's 180-day clock serves as a self-imposed deadline to keep its review of major transactions moving forward.
The move to stop the clock could effectively stall the agency's review of the deal by putting decisions on hold until the agency is presented with further evidence.
The FCC will restart the clock "once the new evidence has been provided to us in a format and with sufficient explanation and back-up information to enable us, and third parties entitled to have access to the information, to adequately evaluate it."
AT&T will not disclose its reworked argument for the deal until July 25.
An AT&T spokesman said the company was "not surprised" the FCC decided to take more time to review the deal.
"AT&T has developed additional economic evidence that further confirms the tremendous efficiencies and consumer benefits resulting from this transaction," the spokesman said in an e-mailed statement. "Because this information, which we will submit next week, is detailed, we are not surprised that the FCC will take the time it needs to thoroughly understand our submission."
The operator maintained that the deal will not "adversely impact the timeframe for approval of our transaction." AT&T has said it expects the acquisition to close early next year despite intense opposition to the deal from consumer advocates and many of its competitors.
The FCC's decision to stall its timeline for the deal came after AT&T disclosed at a workshop last week with its economists, the FCC and the Justice Department that it would use new economic models to support approval of the deal.
The transcript of that workshop remains confidential.
"Given your express reliance on these new models, we have stopped the Commission's informal 180-day clock until we have the information required to evaluate these models," Kaplan wrote. "We believe this is necessary to allow sufficient time not only for the Commission to evaluate and test this new evidence, but also for third parties to have an opportunity to provide feedback to the Commission on the contents and construction of the yet-unseen models."