April 20, 2021

DealBook: Dish Network Makes $25.5 Billion Bid for Sprint Nextel

7:41 a.m. | Updated

The pay-TV operator Dish Network said on Monday that it had submitted a $25.5 billion bid for Sprint Nextel.

The move is an attempt to scupper the planned takeover of Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in the American cellphone operator in a complex deal worth about $20 billion.

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Dish Network thinks it can do better. Under the terms of its proposed bid, Dish Network said it was offering a cash-and-stock deal worth about 13 percent more than SoftBank’s bid.

Dish Network values its offer at $7 a share, including $4.76 in cash and the remainder in its shares.The offer is 12.5 percent above Sprint Nextel’s closing share price on Friday.

“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” said Charles W. Ergen, Dish Network’s chairman.

Mr. Ergen said a “Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”

Sprint Nextel

The bid is the latest for the telecommunications industry, as many of the largest companies around the world look to expand through acquisitions.

As part of its offer, Dish Network said it would be able to combine its own existing broadband and TV offerings with Sprint Nextel’s cellphone operations. The proposed takeover would allow the newly united company to compete with rivals like Verizon that are moving into new areas in search of revenue.

As the No. 3 cellphone service provider, with 56 million subscribers nationwide, Sprint Nextel has struggled to catch up with larger rivals. It is expected to face even more competition as the parent company of T-Mobile USA moves closer to a multibillion-dollar agreement to buy MetroPCS.

Dish Network said it would finance the cash component of the takeover through a combination of $17.3 billion in cash and debt financing.

Barclays is advising Dish Network on its proposed bid. Deutsche Bank, the Raine Group and Mizuho Securities are advising SoftBank. Citigroup, Rothschild and UBS are advising Sprint Nextel.

Article source: http://dealbook.nytimes.com/2013/04/15/dish-network-makes-25-5-billion-bid-for-sprint-nextel/?partner=rss&emc=rss

DealBook: Deutsche Telekom Sweetens T-Mobile Bid for MetroPCS

A MetroPCS store in Manhattan.Mary Altaffer/Associated PressA MetroPCS store in Manhattan.

6:07 p.m. | Updated

Deutsche Telekom sweetened a bid by its T-Mobile USA unit for MetroPCS on Wednesday, after running into fierce resistance from shareholders of the target company.

The German telecommunications firm offered to cut the amount of debt that the combined company will bear by about $3.8 billion, and to reduce the interest rate by half a percentage point. It also agreed to extend a lockup period in which the company cannot sell shares in the merged cellphone service provider to 18 months from 6 months.

The move will essentially improve the overall value of the merged entity’s equity. Deutsche Telekom estimates that the lower debt and interest rate will add almost $3 a share in additional value for MetroPCS shareholders.

Under the present terms of the offer, MetroPCS shareholders would be paid about $4.09 a share and receive a 26 percent stake in the combined company.

Deutsche Telekom said that its latest proposal was “best and final.” A vote on the deal, which had been set for Friday, has been rescheduled to April 24.

The move is a win for investors like the hedge funds Paulson Company and P. Schoenfeld Asset Management, who have called for improvements to the original offer. Shares in MetroPCS risen steadily this year, as shareholders expected an improved offer to come, and people involved in the merger have said that the current offer is likely to fail if put to a vote.

Paulson Company and P. Schoenfeld have argued that the T-Mobile bid as it stands would add too much debt and at too high a price. They have called on Deutsche Telekom to reduce the amount of leverage on the combined American telecom.

Proxy advisory firms like Institutional Shareholder Services have largely sided with the hedge funds, putting additional pressure on Deutsche Telekom to consider raising its offer.

P. Schoenfeld said in a statement that it was pleased by the new offer, though it is currently reviewing its terms.

Article source: http://dealbook.nytimes.com/2013/04/10/deutsche-telekom-said-ready-to-sweeten-t-mobile-bid-for-metropcs/?partner=rss&emc=rss

BlackBerry Maker Unveils Its New Line

Analysts, technology reviewers and app developers with advance access to the BlackBerry Z10 and the BlackBerry 10 operating system have said it is the company’s first competitive touch-screen phone. But BlackBerry 10 arrives long after Apple’s iPhone and phones using Google’s Android operating system have come to dominate the smartphone market that the BlackBerry effectively created. According to IDC, BlackBerry now holds just 4.6 percent of that market, about one-tenth of its historic peak.

To emphasize the changes brought by the new operating system, Thorsten Heins, who took over as chief executive a year ago, said the company, known until now as Research In Motion, had adopted BlackBerry as its corporate name. Its Nasdaq trading symbol will become BBRY, and it will trade as BB in Toronto.

In addition to the BlackBerry Z10 phone, there will be a second model, the Q10, that includes one of the line’s signature physical keyboards. Verizon Wireless announced that it would price the Z10 at $200 with a two-year contract. BlackBerry 10 phones will also be carried by ATT, Sprint and T-Mobile.

“Today represents a new day in the history of BlackBerry,” Mr. Heins said. “These BlackBerry 10 devices are absolutely the best typing experiences in the industry.”

BlackBerry said the Z10 would be available in the United States in March and in Canada on Feb. 5.

There were few surprises in the initial portion of Mr. Heins’s presentation at an event in New York. The company began demonstrating the touch-screen phone and operating system in May and also made prototypes available to app developers at the time. In recent weeks, photographs of the final version of the phones have made their way to various American and European technology Web sites.

Physically, the Z10 resembles an iPhone 5 with its corners snipped off.

But unlike its competitors, the Z10 lacks a button to take users back to a home page and relies entirely on users swiping their fingers across the 4.2-inch screen from different directions to summon features or menus.

While the Z10 lacks a physical keyboard, the main attraction of BlackBerrys for many current users, the company said that it had developed software which should alleviate some of the inadequacies of on-screen typing. According to BlackBerry, its software studies users’ common typing mistakes over time and then starts automatically correcting them. It will also build up a list of commonly used words and offer them as suggestions that can be selected with a flick of a finger.

While developing the new operating system, the company took great pains to improve its strained relationship with app developers. The operating system was also designed in a way that allows them to adapt Android apps for BlackBerry 10 by making some relatively minor modifications.

BlackBerry said Wednesday that more than 70,000 BlackBerry 10 apps were now available.

For corporate and government users, BlackBerry 10 server software will allow them to divide employees’ BlackBerry 10 phones into separate work and personal spheres and give I.T. managers complete control over the former.

Article source: http://www.nytimes.com/2013/01/31/technology/blackberry-maker-unveils-its-new-line.html?partner=rss&emc=rss

Bucks Blog: Wednesday Reading: Live as Long as an Olympian

December 18

Tuesday Reading: Beware of Walking and Texting

Beware of walking and texting, a look at the new T-Mobile pricing, a quest for smarter, speedier airport security and other consumer-focused news from The New York Times.

Article source: http://bucks.blogs.nytimes.com/2012/12/19/wednesday-reading-live-as-long-as-an-olympian/?partner=rss&emc=rss

Bucks Blog: Tuesday Reading: Beware of Walking and Texting

December 18

Tuesday Reading: Beware of Walking and Texting

Beware of walking and texting, a look at the new T-Mobile pricing, a quest for smarter, speedier airport security and other consumer-focused news from The New York Times.

Article source: http://bucks.blogs.nytimes.com/2012/12/18/tuesday-reading-beware-of-walking-and-texting/?partner=rss&emc=rss

European Mobile Stocks Fall After Costly Spectrum Auction

BERLIN — Shares of four big European cellphone operators fell Monday after they paid more than twice what investors had been expecting in a spectrum auction in the Netherlands, raising concern that a damaging bidding war could sap the industry.

The Dutch auction began Oct. 31 and ended Friday, raising €3.8 billion, or $4.9 billion, for spectrum that the companies plan to use for high-speed service using Long Term Evolution, or LTE, technology. But analysts warned that the sale, to be followed next year by a much larger spectrum auction in Britain, could herald a new round of expensive infrastructure levies that may hamstring operators at a time when their sales have been stagnating.

The winners were KPN, the former Dutch monopoly; Vodafone, the British mobile group; the German company T-Mobile, and the Swedish operator Tele2.

LTE supports all of the typical high-speed applications including audio and video and Internet surfing, but is much faster, cutting download times and vastly expanding the capacity of existing networks to handle increases in data traffic.

After the bidding, KPN, which is partly owned by the Mexican communications mogul Carlos Slim Helú, canceled its dividend for 2012 and lowered its projected investor payout for 2013 to cover the $1.35 billion the company spent in the auction.

On Monday, the first day of stock trading after the auction’s completion, shares of KPN fell by as much as 14 percent in Amsterdam, the steepest drop in more than a decade. Shares of Vodafone were down 2.6 percent in London through mid-afternoon trading.

Shares of Deutsche Telekom, the parent company of T-Mobile, fell 1 percent in Frankfurt, and shares of Tele2 declined 3.5 percent in Stockholm.

“The money raised in the Dutch auction was a lot more than investors were expecting,” said Phil Kendall, an analyst at Strategy Analytics in Milton Keynes, England. “The concern now is that the sums will now be so great the technology will be unprofitable.”

Mr. Kendall said mobile operators were eager to obtain extra spectrum because extensive bandwidth had become increasingly critical amid the explosion of mobile Internet data, which is testing the capacity of some carriers’ grids and causing overloading.

“Really, for many operators, the only way they will be able to differentiate themselves from other operators is by having enough spectrum to manage the demand on their services,” Mr. Kendall said. “That is why there is such intense interest in buying more frequency.”

More radio spectrum, or wireless network capacity, is crucial to delivering the high speeds advertised in LTE, which theoretically can produce download rates of up to 300 megabits per second on a wireless connection. Such speeds and the expanded capacity of the networks are considered essential to support the rapid expansion of the wireless Internet, as well as the increasing use of mobile grids for robotic communication between devices.

Speeds on the first generation of LTE networks activated in Germany, South Korea, Sweden and the United States have averaged much less, generally 10 to 25 megabits per second, in part because operators do not have enough spectrum to exploit the technology’s full potential.

The Dutch auction also raised the specter of another costly round of infrastructure fees on the cellphone industry similar to those in 1999 and 2000, when operators paid billions for the first European 3G mobile licenses.

Investors were concerned that the Dutch prices could set a precedent for auctions planned in Britain and perhaps Poland next year, as well as others that will be held across Europe over the next five years as bandwidth is freed up and sold by national governments to wireless carriers. Germany, which held its latest spectrum auction in 2010, has indicated that it may hold another in 2016.

Those license sales in 1999 and 2000, engineered by cash-strapped governments in most cases to extract the maximum amount of money from mobile operators, led to large profit write-downs by operators including Vodafone and Telefónica, which owns the O2 carrier in Europe.

With completion of the Dutch auction, the focus will now shift to Britain, where the telecommunications regulator is planning to begin its spectrum auction in January.

All four British mobile network operators are expected to bid: Everything Everywhere, the venture of Deutsche Telekom and France Telecom; Vodafone; O2 U.K.; and 3, a unit of Hutchison Whampoa. The former landline monopoly, BT, has not ruled out a potential bid, which could further raise the stakes.

Matthew Howett, an analyst at Ovum, a research firm in London, said the British auction could raise £2 billion to £4 billion, or $3.2 billion to $6.5 billion.

“The £2 billion to £4 billion range that is widely touted is based on similar auctions elsewhere in Europe,” Mr. Howett said. “There is nothing to suggest that the U.K. should be any different. It’s possibly the most competitive market in Europe and all existing operators will want to make sure they walk away with spectrum to feed the almost insatiable appetite we in the U.K. now have for data.”

Article source: http://www.nytimes.com/2012/12/18/technology/european-mobile-stocks-fall-after-costly-spectrum-auction.html?partner=rss&emc=rss

DealBook: Sprint Offers $2.1 Billion for Clearwire and Its Spectrum

Masayoshi Son, left, the founder of SoftBank, and Daniel Hesse, Sprint's head, announcing their deal in October.Yuriko Nakao/ReutersMasayoshi Son, left, the founder of SoftBank, and Daniel Hesse, Sprint’s head, announcing their deal in October.

9:19 p.m. | Updated

With the help of a deep-pocketed new partner, Sprint Nextel is ready to spend money to shore up the future of its wireless network.

The telecommunications company offered on Thursday to buy out the part of Clearwire, the wireless network operator, that it doesn’t already own for $2.1 billion. The bid values Clearwire at about $4 billion.

Sprint agreed less than two months ago to sell a majority stake in itself to SoftBank, a major Japanese cellphone service provider.

Under the terms of its proposal, Sprint will pay $2.90 a share for Clearwire, according to a regulatory filing. Sprint, which already owns 51.7 percent of Clearwire, needs the approval of both SoftBank and a substantial portion of Clearwire’s minority shareholders.

Clearwire said in a regulatory filing on Thursday that its board had formed a special committee to consider Sprint’s offer.

Shares in Clearwire have slumped more than 85 percent since they began trading over five years ago. But they leapt nearly 15 percent on Thursday, to $3.16. That suggests that investors believe a higher offer may be forthcoming.

The Sprint offer could benefit both companies. For Sprint, buying all of Clearwire would lock up spectrum that Sprint could use to build out its newest data network.

Long the No. 3 cellphone service provider in the country behind Verizon Wireless and ATT, Sprint has moved aggressively to bolster its position within a consolidating industry. Sprint’s deal with SoftBank gives it a well-heeled partner willing to infuse $20.1 billion into the company.

The Clearwire deal could also help fend off a newly revitalized T-Mobile USA, which has announced plans to merge with the smaller MetroPCS.

A deal would also give Clearwire, which has struggled for much of its existence, some much-needed cash — up to $800 million — after paying off some of its heavy debt obligations. The company reported having $1.2 billion in cash as of Sept. 30, which it expected to last about a year.

Formed with much promise as a next-generation wireless service provider, Clearwire has instead flailed after betting on WiMax, a high-speed wireless data standard that failed to gain traction.

A union of Sprint and Clearwire had long been expected. Soon after the SoftBank deal was announced, both Daniel R. Hesse, Sprint’s chief executive, and Masayoshi Son, SoftBank’s founder, intimated that acquisitions were in Sprint’s future.

“This is a scale game,” Mr. Hesse said in an interview in October.

Clearwire’s shares rose immediately after the SoftBank investment was announced, fueling speculation about a bid from Sprint. A few days later, Sprint increased its holdings in Clearwire, buying shares from Craig O. McCaw’s Eagle River Holdings. The transaction gave Sprint a majority stake in Clearwire.

Sprint is working to build out a Long Term Evolution, or LTE, network that can support the latest smartphones like the iPhone 5. Clearwire owns spectrum that is similar to the radio band that SoftBank uses, potentially creating a path for devices that can be used in both the United States and Japan.

And while Sprint has long been the biggest stakeholder in Clearwire, it hasn’t been able to exert full control over one of its most important partners.

Some of Clearwire’s smaller shareholders, including the investment firms Mount Kellett Capital Management and Crest Financial, have cautioned the company against selling out to Sprint for too low a price.

Mount Kellett has suggested that Clearwire consider selling a portion of its spare spectrum to other telecommunications companies, like ATT or T-Mobile. And Crest Financial said on Thursday that it was willing to take steps as drastic as petitioning government regulators to block Sprint’s deal with SoftBank, in an effort to win a higher price.

An analyst at BTIG Research, Walter Piecyk, estimated that Sprint would need to pay at least $5 a share to secure Clearwire.

But Sprint already has a fair amount of leverage over its smaller partner. It already controls a majority of Clearwire’s voting shares and is its biggest customer. And having posted a string of losses, Clearwire is running out of cash to keep itself afloat.

Sprint has already been in discussions with its major partners in Clearwire — a group that includes the cable operators Comcast and Bright House as well as the chip maker Intel — to convince them that its bid represents a big premium over Clearwire’s October trading position. It is also betting that those companies are eager to shed a losing investment.

Together, they control more than 12 percent of the total votes in Clearwire. Winning them over would put Sprint significantly closer to the roughly 75 percent of the vote it will need to buy control of the company.

A version of this article appeared in print on 12/14/2012, on page B6 of the NewYork edition with the headline: Sprint Offers $2.1 Billion for Clearwire and Its Spectrum.

Article source: http://dealbook.nytimes.com/2012/12/13/sprint-looks-to-buy-remaining-stake-in-clearwire-for-2-1-billion/?partner=rss&emc=rss

DealBook: AT&T’s 11th-Hour Plan to Save Its Deal With T-Mobile

Randall Stephenson, chairman of ATT, knew it would not be easy to persuade regulators to approve the T-Mobile deal.Andrew Harrer/Bloomberg NewsRandall Stephenson, chairman of ATT, knew it would not be easy to persuade regulators to approve the T-Mobile deal.

About an hour after ATT announced its $39 billion acquisition of T-Mobile in March on a Sunday afternoon, I got a call at home. It was Randall L. Stephenson, ATT’s chairman and chief executive. Mr. Stephenson, an affable man with a wry sense of humor, knew he would face a battle persuading regulators the deal should be approved. And with me.

As I peppered him with questions about why the government would possibly allow the No. 2 and No. 4 telephone carriers to merge — a textbook example of creating a duopoly between ATT and Verizon if there ever was one — he deftly stood his ground. He was convinced the deal would happen.

“When you get to the facts, this is a deal that gets approved,” he insisted, rattling off a list of high-price bankers and lawyers who he said agreed with his assessment.

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By now you know what has happened: the deal is on the verge of collapse with ATT disclosing on Thanksgiving — perhaps the best sign a company is revealing lousy news — that it was withdrawing the deal’s application to the Federal Communications Commission, and perhaps more eye-opening, that it planned to take a $4 billion charge against earnings to account for the deal’s enormous breakup fee, perhaps the biggest fee ever paid for a failed transaction. The Justice Department is already suing to block the deal.

But ATT has been secretly working on an audacious 11th-hour deal to salvage the transaction: ATT is knee-deep in talks with Leap Wireless, a second-tier but growing wireless player, to sell it a big piece of T-Mobile’s customer accounts and some of its wireless spectrum, according to people involved in the negotiations.

ATT hopes such a deal would placate the Justice Department enough for it to drop its opposition to ATT’s acquisition of T-Mobile, these people said, or at least to strengthen ATT’s hand if it goes to trial. The deal would make Leap the fourth-largest wireless carrier in the nation, but it would allow ATT to retain enough of T-Mobile’s valuable wireless spectrum, which it says it badly needs to provide the kind of next-generation service that its customers expect, these people said.

If the Leap deal sounds a bit like a Hail Mary pass, that is because it is.

It is just as questionable as ATT’s original deal to merge with T-Mobile. Even with creating a new No. 4 player, it does little to change the duopoly that would be created as a result of the deal, making ATT and Verizon clear favorites, while leaving Sprint, Leap and MetroPCS far behind; in particular, Leap and MetroPCS would probably still be without enough spectrum or cash flow to be truly competitive. A spokesman for ATT declined to comment. A spokesman for Leap did not return a call.

Putting aside the antitrust laws, ATT clearly missed the shifting mood in Washington. While regulators have become more permissive about large transactions, ATT’s analysis ignored the growing opposition to big business represented by the Occupy Wall Street movement and the tonal change, fairly or not, by President Obama.

That’s not to say that ATT and its army of advisers did not thoroughly think through pressing ahead with the T-Mobile deal. ATT was so convinced the deal would be completed, even with significant divestitures — which Mr. Stephenson hinted might be necessary from the very beginning — that it agreed to pay that whopping breakup fee and hand over wireless spectrum to T-Mobile, too. (Kudos to the board of T-Mobile’s parent, Deutsche Telekom, for demanding the outsize breakup fee.)

ATT’s decision to acquire T-Mobile — paying almost twice its estimated value — was a coldly calculated play for spectrum. According to one participant in a board meeting, a banker advised the company that the risk of losing the deal and paying the breakup fee was worth taking because it would also probably distract Sprint and make T-Mobile a lesser competitor. Of course, that calculus may sound self-serving: the bankers traditionally are paid only if the deal is consummated, so for the banker the risk is always worth taking.

According to Thomson Reuters and Freeman Consulting, ATT’s advisers — Greenhill Company, Evercore Partners and JPMorgan Chase — will make $18 million to $36 million each if the deal goes through. T-Mobile’s advisers, Deutsche Bank, Credit Suisse, Morgan Stanley and Citigroup, still stand to make a sizable sum even if the deal fails as a result of the breakup fee.

But the advisers that ATT’s board were listening to most intently were the lawyers who would be on the front lines of the battle: Arnold Porter and Crowell Moring, which worked the antitrust strategy in Washington. (Sullivan Cromwell worked on the deal mechanics.)

Those firms all charge by the hour, so the cynic — or skeptic — might suggest they had every incentive to push the deal ahead.

According to people involved in the decision-making process, the lawyers put the chances of success at 60 to 70 percent.

For ATT’s board, that was a chance worth taking. The question they now must ask themselves: would they use those lawyers again?

Article source: http://feeds.nytimes.com/click.phdo?i=561ee83d99bedba163d296ef43eca1d2

DealBook: AT&T Spars With F.C.C. Over Withdrawal of T-Mobile Deal

Nothing is easy when it comes to ATT‘s proposed $39 billion takeover of T-Mobile USA — apparently not even when it comes to withdrawing the deal from the government approval process.

ATT’s top internal lawyer, Wayne Watts, said in a statement on Friday that the telecommunications giant should be allowed to withdraw the deal from consideration by the Federal Communications Commission without needing permission from the regulator.

Because ATT withdrew its application for approval before F.C.C. commissioners voted on a proposal by the agency’s chairman, Julius Genachowski, earlier this week to move the case to an administrative law judge, the company should be allowed to pull its submission, Mr. Watts said.

ATT withdrew its application for approval in the early morning hours of Thanksgiving, but said it planned to resubmit the deal for the agency’s consideration at a later date.

The F.C.C. has indicated that its options include granting ATT’s withdrawal, but potentially with prejudice, meaning that the company could not refile for approval later, or moving ahead with the administrative law case.

“We have every right to withdraw our merger from the F.C.C., and the F.C.C. has no right to stop us,” he said. “Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”

An F.C.C. representative was not immediately available for comment on Friday evening.

The statement highlights ATT’s growing combativeness as the T-Mobile deal founders amid government opposition. The F.C.C.’s push to hold a hearing on the deal follows a lawsuit by the Justice Department and several state attorneys general seeking to block the transaction.

ATT announced early on Thursday that it planned to record a $4 billion charge in its fourth quarter in case the deal collapses, the company’s biggest acknowledgment yet that the merger is in peril. The charge would cover a majority of a break-up fee owed to T-Mobile’s parent company, Deutsche Telekom, if the transaction fell apart because of regulatory opposition.

Yet the withdrawal of its F.C.C. application signals a hail-Mary legal strategy. ATT is hoping to settle the Justice Department’s claim — or win in court — and use that victory to strong-arm the F.C.C. into approving the merger.

ATT is still exploring ways to settle with the Justice Department, including by selling off assets. But the company has indicated that it is also prepared to do battle in federal district court in Washington, District of Columbia when that trial begins in February.

Mr. Watts’s full statement is below:

Yesterday ATT withdrew its application with the F.C.C. for approval of our merger with T-Mobile. We took the required actions, announced this publicly, and filed securities disclosures accordingly. We believe the record will show that we withdrew our merger application before the F.C.C. voted on the chairman’s proposed hearing designation order.

It has since been reported that the F.C.C. must approve this withdrawal. This is not accurate. The F.C.C.’s own rules give us this right and provide that the F.C.C. “will” grant any such withdrawal. Further, this has been the F.C.C.’s own consistent interpretation of its rules.

We have every right to withdraw our merger from the F.C.C., and the F.C.C. has no right to stop us. Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.

Article source: http://feeds.nytimes.com/click.phdo?i=64d7fbb90e5200238aeb495dac543909

AT&T and T-Mobile Withdraw F.C.C. Merger Application

Deutsche Telekom, the parent of T-Mobile, and ATT said in a joint statement that they still intended to pursue the $39 billion merger and would prepare for a federal antitrust lawsuit that is seeking to block the deal. But the companies also said that ATT planned to take a $4 billion charge against earnings to reflect the potential breakup fees that ATT would have to pay Deutsche Telekom if the deal failed to go through.

The actions followed the decision this week by Julius Genachowski, the F.C.C. chairman, that the merger did not meet the commission’s standard for approval. Mr. Genachowski sent other commissioners a proposed order to refer the case to an administrative law judge, the first step toward a commission move to block the deal, which would combine the second- and fourth-largest cellphone carriers in the United States.

The application withdrawal appears in part meant to prevent the F.C.C. from making public ATT and T-Mobile records about the potential effects of the merger, records that could then be used by the Justice Department in the antitrust trial.

The companies have maintained publicly that the deal would not lessen competition and that it would create jobs in the United States. But the Justice Department has said that the merger would severely restrict competition, and F.C.C. officials have said that ATT’s confidential filings indicate the merger would eliminate jobs.

The withdrawal of the F.C.C. application “is a tacit acknowledgment by ATT that this story is all but over,” said Craig Moffett, an analyst at Sanford C. Bernstein. “The fat lady hasn’t started singing yet, but she’s holding the mike, and the band is about to play.”

The efforts by the Justice Department’s antitrust division and the F.C.C. to block the merger reflect a reinvigoration of federal efforts to rein in excessive business practices after a prolonged period of deregulation that preceded the 2008 financial crisis.

President Obama came into office pledging to take a harder look at the antitrust implications of proposed mergers, but the Justice Department was criticized by consumer groups in its first year for appearing hesitant to follow through on that promise.

Similarly, the F.C.C. drew rebukes for its approval last year of the merger between Comcast and NBC Universal, which critics claimed would concentrate too much power over both television content and its transmission to consumers.

The move this week to conduct a hearing on the cellphone deal was the first time the F.C.C. had done so on a merger since the 2002 proposed alliance between Echostar and Direct TV, which ultimately was scrapped.

In the current case, however, ATT has noted that expansion of the nation’s Internet infrastructure is one of Mr. Obama’s top goals to help rebuild the economy, and the F.C.C. itself has predicted that its recent initiative to expand broadband Internet access to rural areas would create hundreds of thousands of jobs.

Consumer groups, which generally have opposed the merger, said this week’s combined actions indicated that the deal was falling apart.

“The chances that ATT will take over T-Mobile are almost gone,” Gigi B. Sohn, president of the consumer group Public Knowledge, said in a statement. “While you can never count out ATT entirely, the fact that they pulled their F.C.C. application speaks volumes about the company’s lack of confidence” in getting approval.

Deutsche Telekom, based in Germany, said in a statement that the withdrawal “is being undertaken by both companies to consolidate their strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice. As soon as practical, Deutsche Telekom and ATT intend to seek necessary F.C.C. approval.”

ATT issued its own statement saying that the companies were taking this step “to facilitate the consideration of all options at the F.C.C.,” as well as to consider other options.

Edward Wyatt reported from Washington and Jenna Wortham from New York.

Article source: http://feeds.nytimes.com/click.phdo?i=60a538e015aca5dcfe192eb1b2c53970