AT&T pulls T-Mobile application from FCC but vows to press ahead

Avoiding a standoff with the Federal Communications Commission, for now, AT&T and T-Mobile USA parent company Deutsche Telekom say they have withdrawn their FCC application for approval of AT&T’s proposed $39 billion acquisition of the Bellevue-based wireless company.

The announcement, on Thanksgiving holiday in the U.S., comes two days after FCC chairman Julius Genachowski signaled his opposition to the deal by calling for an administrative hearing to review it.

Foreshadowing the potential unraveling of the deal, AT&T also said it expects to recognize a charge of $4 billion in the fourth quarter “to reflect the potential break up fees due Deutsche Telekom in the event the transaction does not receive regulatory approval.”

However, the companies said they aren’t giving up on the possibility of still making the deal happen.

AT&T Inc. and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T and are taking this step to facilitate the consideration of all options at the FCC and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice either through the litigation pending before the United States District Court for the District of Columbia, Case No. 1:11-cv-01560 (ESH) or alternate means.  As soon as practical, AT&T Inc. and Deutsche Telekom AG intend to seek the necessary FCC approval.

The U.S. Justice Department in August sued to block the deal, saying that “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.”

Previously on GeekWire: How Carly screwed up AT&T’s $39 billion T-Mobile acquisition