'Unlikely' AT&T deal gets Verizon's approval, as long as there's no regulation

The more that AT&T's proposed $39 billion purchase of T-Mobile is perceived as unlikely, the more interesting the deal becomes.

While many believed investigations into the deal were little more than political posturing, the suit filed by the Justice Department to block it has changed minds. Analysts now expect the deal has less than a 50% chance of being completed, with some analysts putting that expectation as low as 20%, the Financial Times has found.

AT&T, however, remains positive about the outcome. Earlier this month, it pushed back the expected closing date on the deal, though very much still expecting it to happen (CP: AT&T expects T-Mobile purchase to happen, just later). And speaking at a Morgan Stanley conference in Barcelona last week, Glenn Lurie, president of emerging devices at AT&T, said he "fully expects" the deal to go through.

Sprint, which as the current number-three carrier would be dwarfed by number-two AT&T purchasing number-four T-Mobile, has been strenuously opposed to the deal. It insists that the deal would do everything from reverse two decades' worth of government policy to costing a number of Americans their jobs (Unfiltered: AT&T wonders why Sprint wants T-Mobile to stay free and single).

In September, however, speaking at a Goldman Sachs event, Sprint CEO Dan Hesse, softened on his position, saying that Sprint is "not better or more ethical or moral than any other company," and that AT&T's executives are just serving the company's shareholders. Sprint, he added, was in the fortunate position of having its shareholders' interests aligned with those of the public.

Also at last week's Morgan Stanley event (is there something in investment houses' water?), Verizon CFO Fran Shammo offered a gentler position on the AT&T deal, suggesting the carrier isn't so much worried about losing the number-one spot to a combined AT&T/T-Mobile, as it is about new regulation.

"We've been very silent on this one," Shammo said in response to an audience member question, according to an event transcript from Verizon. The reason Verizon has been silent he said:

...is that there needs to be consolidation. As long as there's consolidation without regulation, we don't have an objection to it. So as long as there's no contingencies or something that would come through that a regulator thinks that they can regulate [what] we don't think they can, then we'll be okay with it.

Should AT&T be allowed to go through with the purchase, an expected contingency is that it will have to sell off some spectrum, which could benefit Sprint and even Verizon.

Speaking about Verizon's expanding LTE network at the event, Shammo said that it's still only in the beginning stages, and that Verizon has enough spectrum to last it through at least 2015. The next-generation of LTE, coming at the end of 2012, he added, will help the matter, as it's able to improve spectrum efficiency.