California regulators announced on Friday that the state may open a formal examination of AT&T Inc's proposed $39 billion purchase of T-Mobile USA. If the motion becomes a reality, it could delay or add conditions to approval of the deal. If AT&T and T-Mobile actually get their deal to go through, it would make for the largest U.S. mobile phone service.
To complete the deal AT&T needs approval from the U.S. Department of Justice and the U.S. Federal Communications Commission, the telecommunications regulator. State regulators can block a merger within their state and it looks as if California will be the first on the block to propose a block.
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The California Public Utilities Commission told its staff, in a meeting on Thursday, to open a proceeding to gather information about the merger for the state regulator to consider at its next voting meeting on June 9, according to an article on Reuters.
The commission said it wants information about the merger proposal "in light of relevant state law and public policies." Considering the state of California has a massive pull throughout the country, a rejection could sabotage the AT&T/T-Mobile deal like no other. The article also says that AT&T has notified California, Arizona, Hawaii, West Virginia and Louisiana about the deal. Louisiana has already said it would investigate. Sprint had asked West Virginia, California and Louisiana to review the deal.
Hopefully, if the deal goes through, the brands will maintain its integrity and not raise prices because they’ve become such a powerful force in the market.