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The FCC staff study of the AT&T/T-Mobile merger proposal found substantial questions of fact and misstatements by AT&T regarding the effect the merger would have on competition in the wireless market (pdf report). The Verge summarizes the report’s skeptical findings.

The FCC released the 109-page staff report (pdf), in a highly unusual move. The report details the effects of the merger on competition, the public interest, and wireless broadband deployment. The report concludes the deal would cause huge job losses and eliminate a key wireless competitor.

AT&T’s Jim Cicconi, senior VP of external and legislative affairs calls the release of FCC staff’s draft report “troubling” & “improper.”

“This report is not an order of the FCC and has never been voted on,” wrote Jim Cicconi in a blog post. “It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing

Last week, FCC Chairman Julius Genachowski asked the other commissioners to vote with him to designate the case to an administrative hearing in the agency’s effort to try to block the deal. The FCC referred it to an administrative law judge because the FCC’s had doubts about the veracity of some of AT&T’s assertions.

On Thanksgiving, before the commissioners had cast their vote on the hearing, AT&T and T-Mobile requested to withdraw their application.

Today, the Federal Communications Commission told the press that it has accepted the request of AT&T and Deutsche Telekom to withdraw their transfer of T-Mobile’s spectrum licenses to AT&T (pdf).

According to EWeek, AT&T may refile the application.

Meanwhile, AT&T and T-Mobile USA are apparently mulling whether to create a network-sharing joint venture in the event the merger falls apart, according to the Wall Street Journal.

If the T-Mobile merger IS toast and T-Mobile pulls out, then AT&T needs cable’s near nation-wide AWS spectrum, purchased but unused by their holding company, SpectrumCo.

AT&T’s existing (but unused) AWS spectrum, bought under their Cingular brand in 2006, could be combined with cable’s (SpectrumCo) AWS frequencies. Those frequencies, combined with “700 MHz carrier aggregation” could be AT&T’s plan “B” if the T-Mobile merge doesn’t go though.

AT&T might get competition from T-Mobile. T-Mobile has a nationwide AWS network. AT&T doesn’t. T-Mobile could utilize cable’s spectrum in a heartbeat. AT&T, a cable competitor, would have to build a nationwide AWS network from scratch.

Alternatively, T-Mobile and Dish Networks together could provide over 60 MHz of 2 GHz LTE spectrum (without GPS issues), nationwide. It would enable 700 MHz streaming media or a “carrier aggregated” LTE service using T-Mobile’s AWS or Dish’s 2 GHz spectrum. Wholesale partners could include Apple, Amazon, Google, Microsoft or Facebook.

Randall Stephenson, chairman of AT&T, created a merger plan that was long on hubris and short on value. Justice said what an army of sycophants could not.

Some analysts say there is now a 10 percent chance that AT&T will be able to consummate its merger. As Information Week says, What A Waste.

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