New York state lawmakers are expected to approve a $20 billion deal between AT&t and the federal government that would give the telecom giant the right to sell all of its phone lines and make millions of dollars in profit.
It’s not the biggest deal of the day, but it’s big enough to be worth mentioning, especially as Congress continues to debate how much to give to the struggling telecom giant, which has struggled since 2009 to win customers.
The agreement would allow AT&ts to buy and sell the entire phone and wireless lines of all of America’s major carriers, including Verizon, T-Mobile, Sprint, and U.S. Cellular.
At stake are billions of dollars of future profits and billions of customers, according to a deal struck last week by President Donald Trump and Attorney General Jeff Sessions, both of whom oppose the deal.
A majority of Americans believe the deal is a bad deal for consumers, according a new poll by the Kaiser Family Foundation, and a poll released Thursday by The Wall Street Journal suggests the deal has lost its appeal.
Some of the problems facing AT&s have been obvious from the get-go.
When the company purchased Time Warner, for example, the company took a big risk and went public, and it struggled to maintain profitability for many years.
But AT&, which is owned by Charter Communications, has also made several bold moves, including a $1.6 billion buyout of AOL, which went public in 2011.
AT& also bought Time Warner’s parent company, Turner Broadcasting, in a deal valued at $3.9 billion.
In recent years, AT& has also become increasingly dependent on the federal Government for help with its financial troubles, and this week it filed a lawsuit against the Department of Labor for making it harder for the company to hire workers and fire workers.
On top of the billions of cash AT& is hoping to acquire from the federal deal, the deal would also give AT&ters largest investor, hedge fund manager Paul Singer, an ownership stake in AT&Ts flagship phone service, which could make him a major player in the next phone auction.
Singer said in an interview with Bloomberg that he had no intention of buying the company.
“It’s going to be very hard for us to go forward if I have any stake in it,” Singer said.
“The question for us is, how do we do it, how can we make it profitable, how could we get it to consumers and compete with their competitors, so that we can do better.”
In the deal, AT’s CEO Randall Stephenson would become chairman and the deal’s largest shareholder would become Paul Singer.
The deal is expected to go through on Thursday.
This deal will give AT and the Federal Communications Commission (FCC) more leverage in the phone auction, which can make it more difficult for AT> to buy the spectrum it needs for its phone services.
The FCC is expected this week to vote on the deal and AT&> will be able to seek to block the FCC’s approval, which would be the first major victory for the telecom giants.
If AT&’s bid is approved, the companies would then have a shot at winning the auction’s most lucrative spectrum, which will be used to create a next-generation network for the next iPhone.
Last week, AT > said it would be willing to sell the spectrum for as much as $2.7 billion, which means that a $2 billion bid would get the government to approve it for sale.
Under the deal signed last week, the FCC will buy the entire spectrum for $10.6 trillion and the telecom company would get to keep most of it, according the New York Times.
AT>’s stake in the deal will increase to about 25% of the FCC after the auction, the Times said, citing a source familiar with the matter.
As part of the deal approved last week the FCC is buying up to 2.4 million miles of spectrum, up from 1.5 million in the initial deal.
The auction will be conducted in phases, with auction winners to be announced in 2018.
Meanwhile, the new FCC chairman, Ajit Pai, said he would like to “open up” the phone auctions to outside investors.
He also said that he will be more willing to work with Congress and other regulators to help keep the companies profits up.