AT&T's Critics on Deal Growing

Opposition is steadily growing to AT&T Inc.'s proposed $39 billion takeover of T-Mobile USA, as competitors, state regulators and elected officials have come out in recent days expressing concerns about the acquisition from Deutsche Telekom AG.

The views add to pressure on a combination—of the second- and fourth-largest wireless carriers in the US -- that has already raised serious initial concerns at the Justice Department, which is worried it will hurt competition, according to people familiar with the matter. The opponents are squared off against rural constituencies, organized labor and a number of governors who support the transaction. The developments have firmed up battle lines and are challenging AT&T's assertion that the deal will get done -- as the Justice Department and Federal Communications Commission regulators that hold sway over the deal ramp up their reviews. "AT&T opened with such a tightly controlled and well orchestrated launch, they controlled the story line for awhile," said Rebecca Arbogast, an analyst with Stifel Nicholas. "Now we are seeing some say, 'Wait a minute, is this really the market structure we want in the US?' "

AT&T's lead lobbyist, Jim Cicconi, said opposition to the deal is still far outweighed by its supporters. Eleven state governors have filed letters of support with the FCC, and organized labor has largely come out in favor of the deal, he said. "Opposition is not growing," Cicconi said. "If anything, it seems fairly confined to the usual people and the usual organizations and does not seem to be growing beyond that."