It’s  official, and not the least bit surprising at this point: AT&T has ended its attempt to acquire T-Mobile USA.  It’s not happy about it, either: 

The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage.  In the absence of such steps, customers will be harmed and needed investment will be stifled.

 
AT&T’s agreement with T-Mobile parent Deutsche Telekom requires it to fork over $4 billion in penalties, which probably doesn’t make AT&T any less cranky.I’m glad that the merger didn’t happen, simply because I don’t want to see AT&T and Verizon share a wireless-industry duopoly. The continued existence of T-Mobile USA in some form–it may well be bought out by someone else–helps prevent that eventuality. I wonder what AT&T’s backup plan is, and whether we’ll even remember this non-merger five or ten years from now?

The FCC doesn’t like the looks of AT&T’s proposed acquisition of T-Mobile’s US operations. Paid Content’s Tom Krazit reports:  

During a media call Tuesday afternoon FCC representatives (who insisted on remaining anonymous) said that Chairman Julius Genachowski has asked fellow commissioners to review a proposal that the merger be subject to a hearing after finding aspects of the proposed deal that don’t line up with the public interest. One representative called the merger a unique concentration in market power in almost every single one of the top 100 local markets in the U.S., and also said that AT&T’s claims that the merger will allow more Americans access to 4G wireless (AT&T’s primary selling point) and create new jobs did not hold water.

If the hearing happens, it’ll only begin after the Department of Justice concludes a trial over the proposed merger that isn’t due to start until February. So it could be a long, long time until the deal gets a definitive yay or nay–and you’ve got to wonder at what point AT&T and T-Mobile decide that it’s best to give up and begin the rest of their lives as competitors. (AT&T wants T-Mobile so it can beef up its 4G, but it must have a backup plan, and it can’t postpone it forever.) 
 
For me, the prospect of the merger has always been pretty simple. Smaller wireless companies, like T-Mobile, Sprint, and regionals like MetroPCS and Cricket have lower prices and more creative plans. The two giants, AT&T and Verizon Wireless, have higher prices and less flexibility. I don’t see any scenario under which removing one smaller player from the equation improves things for consumers–and that’s why I’ll be happy if the merger falls apart, as it’s now looking like it will.

The Justice Department is suing to prevent AT&T’s takeover of T-Mobile’s U.S. arm. The move doesn’t kill the deal, but it does increase the chances that it won’t go through or will be approved only with further concessions on AT&T’s part.

I’m not an expert on the economics of telecommunications competition. But I keep coming back to this: The two wireless companies that have been the most aggressive on pricing and the most creative with plans have been T-Mobile and Sprint. The (relatively) small players, not the giants. Is that a coincidence? What are the chances that eliminating one of them would lead to lower prices and more options?

Hey, jt might be just about to be gobbled up by AT&T, but that sure isn’t stopping T-Mobile from sticking it to the big guys. As part of a push for its 4G services, the carrier is offering credits of to $300 on the trade-in of a competitor’s device.

There are a few requirements: you need to be a new customer (obviously), and the device needs to be fully functional and in good condition — free of either water or corrosion damage. In order to trade the device in, the consumer needs to visit a retail location.

In partnership with The Wireless Source, representatives have a list of values for current devices. The payment for the device comes in the form of a mailed check, so the savings on a T-Mobile device aren’t instant, infortunately unfortunately.

T-Mobile’s deal certainly seems good, but I think I’d echo most people’s concerns that one would have to wait for a mailed check rather than instant payment much like Radio Shack has begun to do. What happens if The Wireless Source doesn’t think the device is in good enough condition? Do you get it back? We really don’t have an answer to that.

[Hat Tip: TMoNews]

Contests aren’t something I’d normally report on, but T-Mobile’s “Battle for E3” contest strikes me as newsworthy.

Entrants must upload a 15-second video to T-Mobile’s Facebook page, explaining why they are ultimate gamers and should therefore be chosen as an E3 “correspondent” for the company (i.e., play lots of video games before they’re released). The top prize, aside from the trip to Los Angeles, includes LG’s G2x Android phone.

Without reading into this too much, I think it’s interesting that a wireless carrier is taking such a keen interest in E3. This, combined with other signs, make me think smartphones could finally have a strong showing at the trade show.

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It appears that T-Mobile, AT&T, and Verizon’s ambitious plans to create a mobile payment service may not happen, at least the way they’re hoping. The Wall Street Journal reported Wednesday that the carriers may now decide to partner with credit card companies instead to make the network happen.

Originally, the service (called “Isis”) was to bypass the traditional credit card companies altogether: charges would appear directly on consumer’s cellular phone bills. The abrupt 180 may be due to ensuring Isis has any chance of success — leveraging the power of Visa and MasterCard could go a long way.

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The Justice Department has sent a second round of questions on the proposed merger of AT&T and T-Mobile to the two companies, sources told Bloomberg on Tuesday. In addition, so-called “civil investigative demands” have also been sent to the companies’ competitors, in an attempt to measure the mergers possible effects.

With these actions, the merger review now has no timetable for completion — which means AT&T and T-Mobile’s stated goal to get the review completed within a year could be in serious jeopardy. It also highlights the complexity of the situation, and how difficult it might be for the deal to win approval.

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Wireless carrier T-Mobile is no stranger to VoIP, having experimented with it for a time through its now defunct Hotspot@Home service, which ended last year. Well, it’s trying again, but this time bringing the technology to social networking site Facebook.

Called Bobsled by T-Mobile (don’t ask, I have no clue why they settled on this name), the application for both PC and Mac gives users the capability to place free VoIP calls between Facebook friends, including integration with the Facebook chat system. The application is free to all Facebook users and is not exclusive to subscriber’s of T-Mobile’s wireless services.

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My friend Lance Ulanoff of PCMag.com has a nice interview up with Marty Cooper, who invented the cell phone 38 years ago. Cooper may be living history, but he’s also very much up to date on where his creation is going. He carries a Verizon Thunderbolt 4G phone, and he doesn’t like the idea of the AT&T-T-Mobile merger one bit…

At last week’s CTIA Wireless conference, Sprint CEO Dan Hesse was somewhat subdued about the proposed merger of AT&T and T-Mobile US–he said that his opinion didn’t matter. But now Sprint has formally come out in opposition to the deal, in a press release that uses the dreaded M-word: Ma Bell.

I spent the last few days at the CTIA Wireless show in Orlando, and the big news at the show wasn’t big news from the show. It was, of course, the proposed merger of AT&T and T-Mobile US. Everyone at the conference seemed to still be processing it in their minds–and I decided to ask my friends over at Twitter (where I’m @harrymccracken) for their takes as of right now.

What are your thoughts on the prospect of AT&T and T-Mobile merging? (I might quote you on Technologizer.)—
Harry McCracken (@harrymccracken) March 24, 2011

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Here at the CTIA Wireless show in Orlando, Sprint CEO Dan Hesse says that with the planned summer launch of HTC’s 3D EVO and 4G EVO tablet, Sprint will have 22 4G devices, more than any of its rivals. Verizon says it will bring its 4G LTE network to 147 markets by year’s end, while AT&T is simultaneously building out its HSPA network while preparing to launch its LTE network later this year.

No question, 4G is the next mobile battleground for what shapes up to be a smaller field of national carriers. But at a day of sessions on the subject (sponsored by Fierce Wireless, which among other things publishes a first-rate daily newsletter on the wireless industry), the dominant theme seemed to be that the carriers may not be ready to deal with the enormous bandwidth demands their fast devices and networks will inevitably produce.

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What merger? T-Mobile is doing exactly what it promised — moving on regardless of Sunday’s merger news. Data junkies will salivate at this one: the carrier has announced the first cities to get its 42Mbps network upgrade.

Now do you understand why AT&T wanted the carrier so much?

New York City, Las Vegas, and Orlando would be the first cities to see the high-speed service. Chicago will follow soon after along with the Long Island, NY and northern New Jersey. These speed boosts would “theoretically” double maximum speeds in these areas, and it expects by mid year to have increased speeds in about 25 markets covering some 140 million people.

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Bloomberg’s Serena Saitto and Jeffrey McCracken give the lowdown on the AT&T and T-Mobile deal: Sprint was a player — along with 3 (!) other parties other than AT&T — but just couldn’t afford what Deutsche Telekom wanted. Apparently, the breakup fee is what sealed the deal.

The Googlephone. It’s a concept that sometimes sounds an exciting taste of the future, and sometimes sounds like it’s already fizzled. And today, it’s back to being exciting: Google has announced that there will be a Sprint 4G version of its fine Nexus S phone–and that it will give consumers all the goodness of Google voice without making them switch their phone numbers. That’ll make it the first true native Google Voice phone.

The news would be noteworthy whenever it came down, but the timing is fascinating. It came down hours after AT&T agreed to acquire T-Mobile–there latter being the carrier that partnered with Google for the Nexus One and original Nexus S, and the only national carrier other than Sprint that counts as a scrappy underdog. Sprint needs good news; Google needs a wireless partner that isn’t T-Mobile and that doesn’t insist on acting like an 800-pound gorilla. Short of Google buying a phone carrier, there are all kinds of interesting things it could do with Sprint if the two companies agreed to let Google take the sort of dominant role that Apple took with the iPhone but which otherwise just doesn’t happen.

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Bruce Gottlieb–until recently an advisor to the chairman of the FCC–has some smart analysis on the implications of AT&T’s plan to buy T-Mobile US over at The Atlantic.