How AT&T Completely $#!@ed Up The T-Mobile Acquisition

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AT&T’s plan to gobble up the fourth largest carrier in America is, for all intents and purposes, dead. After the Department of Justice moved to block the deal, AT&T began to back out of the deal.

So here’s a question. How does one of the biggest companies on Earth, with more lobbyists and politicians in its pocket than you can count, find itself incapable of closing a merger deal with a fourth-rate carrier, even after spending millions on campaign contributions, kickbacks and lobbying?

The simple answer? AT&T done $%!@ed up.

A fantastic piece today by The Washington Post explains just how AT&T screwed up the deal, but here’s the gist.

When AT&T first announced it wanted to buy T-Mobile, they did what they usually do: they put their lobbyists to work, while reminding politicians and interest groups that they’d contributed to that they really wanted this deal to happen. In fact, because the T-Mobile deal was so huge, AT&T literally threw every resource they had at their disposal to convince people that an AT&T-Mobile wasn’t just an okay deal, but good for consumers.

Hysterically, it was AT&T’s full frontal PR assault that ended up kicking the deal’s teeth in:

The letters from third-party groups raised eyebrows at government agencies and on the Hill, where people began wondering why groups with no obvious ties to broadband were writing in. News reports emerged showing that many of the groups had financial ties to AT&T.

Then there were the ads that staff members at the FCC said they couldn’t avoid when they opened a newspaper, fired up their iPads or watched TV – all touting the merger’s ability to put thousands of Americans to work. But who had ever heard of a big company merger creating rather than destroying jobs?

And then, just for good measure, AT&T ended up accidentally providing evidence that it was lying and that the T-Mobile merger wasn’t necessary to expand their beleaguered broadband network.

Incredulous staff members at the FCC also sent a harshly worded letter in the fall saying the company had “produced almost nothing” to prove its job claims. Their skepticism grew when an AT&T lawyer accidentally uploaded internal documents to the agency’s Web site that showed the company was planning to expand its broadband network even if the merger didn’t go through.

In other words, AT&T will now likely have to pay a $4 billion breakup fee now that the deal has gone south because they were not only lying about the merits of the deal, but they protested so much after they lied that everyone knew they had to be hiding something. Nice one, guys.

[via Gizmodo]