The FCC did end up allowing AT&T to withdraw its application for approval of The Megadeal, avoiding a threatened lawsuit from AT&T in the process. But the commission also issued a 109-page report on the proposed acquisition, ripping it apart eight ways from Sunday.

From the Wall Street Journal:

In the report, the FCC found that the loss of an independent T-Mobile would give AT&T a "unilateral incentive" to raise prices and provide incentives for rivals Verizon Wireless and Sprint to follow suit. The staff also expressed doubts that smaller regional carriers could replace T-Mobile and offset consolidation in the wireless market.

The agency said it found little evidence to back up AT&T's position that the deal would lead to improved wireless network quality, because it said AT&T didn't provide data necessary to verify its assertions.

The FCC staff also dismissed AT&T's statements that it needed T-Mobile's spectrum to build out its next-generation wireless network across most of the U.S

It’s another blow in a continuing flood of blows that AT&T has received about the deal. AT&T has pointed out that the report has no legal bearing but nonetheless when you have the two major agencies from whom you need to get approval (FCC and DOJ) publicly going to great effort to slam your proposal, it’s just not looking good.

Also, remember all that talk about how AT&T would sell off some of its coverage areas to smaller providers like Leap Wireless? Well it seems that no one would be able to afford to pay what AT&T would need to get for them. 

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