SAN FRANCISCO (MarketWatch) — Did AT&T Corp. really think that its 11th-hour offer to bring 5,000 wireless call-center jobs back to the U.S. if its $39 billion purchase of T-Mobile USA was approved would work?

Probably not, but it was worth a shot. A government so hobbled by the lack of jobs created since the financial crisis might consider anything if it could boost payrolls, even allowing a massive mobile telecom deal envisioned by AT&T Inc. T -0.60% and T-Mobile parent Deutsche Telekom AG DTEGY -0.08% DE:DTE -0.20%

The Justice Department on Wednesday sued to block AT&T Inc.’s proposed $39 billion takeover of T-Mobile USA, saying the combination of the second- and fourth-largest U.S. cellphone companies would hurt competition, raise prices.

Alas, the Department of Justice wouldn’t be swayed in this case from its concern that the deal would reduce competition and raise consumer prices. But it will have other chances.

The Obama Administration needs to create millions of new jobs in the next 14 months to ensure re-election. Judging from the leaks so far about the president’s new plan to create jobs — set to be announced next week — it’s not going to be enough.

Corporate America has jobs, or at least the ability to create new ones or bring existing ones back to U.S. shores. But it is concerned about a new recession and has so far been hesitant. These two sides need each other, but neither will budge without a little wink and a nod from the other. So we are set for a year of political and economic extortion on both sides with new U.S. jobs caught in the middle.

A Wall Street Journal story in April reported that the largest U.S. corporations, accounting for a fifth of all American workers, cut 2.9 million U.S. jobs in the 2000s while hiring 2.4 million people overseas, citing data from the U.S. Commerce Department. See WSJ story on foreign hiring.

The piece by David Wessel compared the trend to the 1990s, when U.S. multinational companies hired 4.4 million people in the U.S. and 2.7 million to international jobs. A Bloomberg News piece in the Washington Post last week reported how U.S. corporations try to keep those foreign hiring numbers low profile, especially as they ask for tax breaks from the government to hire more people.

Corporate lobbying is nothing new and politicians are used to these types of tactics. Here in San Francisco this week we’re being told that consumers will likely have to eat the $2 billion cost — through higher energy rates — of updating miles of natural gas pipelines to prevent the type of explosion of an outdated Pacific Gas & Electric pipeline that claimed eight lives in suburban San Bruno, Calif. last year. The level of outrage, given that people actually died because of PG&E Corp.’s PCG -0.59% pipe failure, seems muted, almost as if customers have come to expect that type of remedy.

Politicians, especially in Washington, realize that in many cases they are going to have to play ball with corporations to get the job growth they all need in their constituencies come election time. So if anything, companies maintain the upper hand, even on Wall Street, where jobs are imploding this summer.

Globalization has provided many benefits, but for the next year the benefits of foreign markets and worldwide brand recognition are on the back burner, at least at home. A dangerous bluffing game is escalating with U.S. jobs at stake. But there are opportunities for the corporate CEO who seeks them.

At some point, the economy will start to show more prominent signs of strengthening, and the companies that seize the opportunities now will benefit. The question now — and next week for the President — is whether American job seekers will have to wait until after next November to get a piece of that action.

David Callaway is editor-in-chief of MarketWatch.

Microsoft is reportedly interested in a $19 billion Nokia takeover, according to blog Boy Genius Report, citing one source.

Nokia called the rumor “baseless,” a term reserved for official denials.

The chatter comes as Nokia shares plunged 20% to a new 13-year low early Wednesday after the company said Tuesday that its phone sales have collapsed.

For Nokia, with a market capitalization of $25.6 billion, the $19 billion potential acquisition price represents a painful take-under, but it does lend support to the idea that the stock won’t go to zero.

For Microsoft, Nokia could theoretically put the company in the top three of mobile operating systems behind Google’s(GOOG_) Android and Apple’s(AAPL_) iPhone iOS.

However, it isn’t clear why Microsoft would need to acquire Nokia since it is already committed to the Windows Phone strategy.

Microsoft has shown a sudden interest in acquisitions as the company’s go-nowhere stock languishes and more pressure is put on its CEO Steve Ballmer. Last month, Microsoft agreed to buy Skype, the Net calling shop, for $8.5 billion, sending a clear signal that the tech giant is looking for growth outside its software franchise.

Conceivably, with the addition of Nokia and Skype, Microsoft would be on somewhat similar footing with Apple and Google in terms of having many of the ingredients for smartphone development.

Nokia’s value has plunged dramatically this year as it continues to get outgunned by smartphone rivals at the high end and outsold by low cost phone makers in developing markets.

Nokia is in the middle of a harrowing product transition from its now-obsolete Symbian phones to Microsoft Windows 7 phones, which are due out in numbers next year. In the meantime, Nokia expects profits to vanish and analysts expect its top market share will diminish dramatically, leaving a restart with Windows phones facing a steep uphill climb.

Even still, the $19 billion price tag floated by the Boy Genius report is low, according to quick analysts’ calculations.

Subtracting cash and licensing revenue, Nokia is worth about $14.4 billion before you add the $17.3 billion in annual revenue from its Nokia Siemens networking joint venture, said MKM Partners analyst Tero Kuittinen.

Nokia shares had rebounded to $6.98 from a low of $6.45 earlier Wednesday on deal chatter, but have since fallen 5% to $6.66.

More on NOK
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Microsoft representatives declined to comment.

-Written by Scott Moritz in New York.

To contact this writer, click here: Scott Moritz, or email: scott.moritz@thestreet.com.

LA Times – Satellite television provider Dish Network has emerged as the upcoming owner of Blockbuster Inc. It has agreed to pay $320 million for virtually all the assets of the troubled home-video chain, making it the winner of a bankruptcy auction that began Monday.

Other bidders at the proceedings in a bankruptcy court in New York included billionaire investor Carl Icahn, South Korea’s SK Telecom, and a group of Blockbuster creditors.

In Blockbuster, Dish will get a once-dominant brand that is now struggling, having seen its business deteroriate rapidly in the last several years largely due to fast-growing compeitors such as Redbox and Netflix. Blockuster, saddled with debt, has shut down more than a thousand stores over the last year. It currently operates 1,751 stores in the U.S., compared with 3,425 in 2010.

In a statement, a Dish executive indicated that the satellite television company will use Blockbuster to promote its services and extend its ability to deliver movies, presumably by way of the Internet as the business increasingly goes digital.

“With its more than 1,700 store locations, a highly recognizable brand and multiple methods of delivery, Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network,” said Tom Cullen, executive vice president of sales, marketing and programming for Dish Network. “While Blockbuster’s business faces significant challenges, we look forward to working with its employees to reestablish Blockbuster’s brand as a leader in video entertainment.”

The acquisition, which includes $228 million in cash and still needs court approval, is expected to close by the end of June.

Because it has been in Chapter 11 bankruptcy since September, Blockbuster no longer carries the almost $1 billion in debt that nearly crushed the company last year. Creditors including Icahn had planned to reorganize the home-video chain in Chapter 11 but disagreed over how much cash to infuse it with as sales deteroriated over the holidays, leading to the decision in February to sell Blockbuster’s assets at auction.

WSJ – AMSTERDAM—Deutsche Telekom AG shares soared as much as 16% Monday after the company moved to resolve its most vexing strategic challenge with an agreement to sell T-Mobile USA to AT&T Inc. for $39 billion.

The planned sale of T-Mobile, announced Sunday, would give the German telecommunications company ample means to cut its debt by €13 billion euros ($18.4 billion), commit €5 billion to share buybacks and invest further in its Internet activities, Deutsche Telekom officials said.

More broadly, though, the sale would mark a new phase in DeutscheTelekom’s global ambitions, in which it will likely retrench and expand in Europe instead of looking to the U.S. to help fuel growth. While that shift raises its own set of challenges, analysts said, selling T-Mobile would rid Deutsche Telekom of what had become a strategic albatross.

Shares in Deutsche Telekom closed up €1.08, or 11%, at €10.67 after making their biggest gain in opening trading since the company’s initial public offering in 1996.

“The consensus was that Deutsche Telekom is facing a structural problem in the U.S. and, as such, the disposal addresses that and removes a major obstacle to the equity story,” said Saeed Baradar, analyst at Societe Generale, in a note to investors.

AT&T said it was buying T-Mobile USA from Deutsche Telekom for $39 billion in cash and stock, a move that would create the nation’s largest wireless carrier and shift the competitive landscape of the U.S. industry. Shayndi Raice has details.

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Indeed, Deutsche Telekom has for years grappled with how to fix or unload its U.S. business, as the former cash cow struggled to build a network and subscriber base to match rivals. Deutsche Telekom Chief Financial Officer Timotheus Höttges said on a conference call Monday that the company had been in talks with five different parties over a solution for T-Mobile before the deal with AT&T was confirmed Sunday.

Mr. Hoettges added that Deutsche Telekom doesn’t intend to change its overall acquisition strategy and has no plans to invest in emerging markets in Asia and Africa. That leaves the German telecommunications company with a growth strategy focused largely on burgeoning markets in southern and Eastern Europe, where data and triple-play services, including those that bundle Internet TV, are just starting to take off.

In its home market in Germany, the company plans to invest roughly €10 billion over the next decade in fiber optics, new mobile communications and other technologies. It plans additional investments elsewhere in Europe, where it has activities in Croatia, Hungary and Slovakia, as well as indirect stakes in Greece, Poland, Romania and other parts of southeastern Europe.

AT&T agreed to buy T-Mobile USA for $39 billion in cash and stock, in a deal that combines the No. 2 and No. 4 U.S. wireless carriers. WSJ’s Dennis Berman and Lauren Goode discuss whether the tie-up will pass regulatory scrutiny and who the winners and losers of the deal are.

Although Mr. Hoettges said he expected the T-Mobile USA sale to face some antitrust restrictions in certain markets, he added that he was confident the deal would go through and be completed during the first half of next year.

A decade ago, the company’s move to acquire the then-Voice Stream Wireless for $35 billion was meant to signal Deutsche Telekom’s transition from plodding state-owned bureaucracy to international telecom player.

Instead, the deal became a symbol of the excesses of the telecom boom. In the years that followed, Deutsche Telekom pumped billions into the business to expand the network and add spectrum, but it was often a step behind rivals.

With only one-third the number of wireless subscribers as AT&T and Verizon, T-Mobile couldn’t match the efficiencies of scale of its competitors, a considerable disadvantage in an industry with huge capital costs. A public perception that T-Mobile’s wireless network was inferior and lacked reach proved to be a major handicap at a time when customers are increasingly relying on their cellphones to surf the Internet and stream video.

With T-Mobile squeezed between the top-end of the market and low-cost providers, Deutsche Telekom’s German management began to view a deal as the only viable option.

Deutsche Telekom’s other option for T-Mobile—expanding it through major investment and acquisitions—would have had little support among the company’s big investors, especially the German government, which still holds a roughly 30% stake.

The purchase of Voicestream is widely regarded in Germany as an expensive mistake. Though the German government doesn’t intervene directly in Deutsche Telekom’s affairs, as a shareholder it demands a generous dividend and would likely block any strategic moves that would endanger its annual payout. At more than 8%, Deutsche Telekom’s dividend yield is among the highest of any major German company.

Indeed, in AT&T, Deutsche Telekom has found a partner that gives its risk-averse shareholders what they prize most —stability. “As AT&T’s largest shareholder, we will also profit from their dividend strength,” Mr. Höttges said. The company’s plans to pay down about €13 billion in debt also would reduce its total debt by one-third.

DealB%k – Combining two companies with significant overlap usually leads to howls of protest by employees facing potential job cuts.

But in the case of AT&T’s $39 billion acquisition of T-Mobile, the two cellphone service providers have a somewhat unusual supporter: the Communications Workers of America.

By securing the backing of a prominent union, one with more than 700,000 members, AT&T appears to be shoring up important political backing as it prepares for tough regulatory scrutiny.

In a press release issued on Sunday, the C.W.A. talked up the benefits of the merger, primarily its aim to expand next-generation wireless services coverage to 95 percent of the country. The union has already focused on building out the nation’s broadband wireless network as a key driver of new job growth, having rolled out an initiative called Speed Matters.

“For more than a decade, the United States has continued to drop behind nearly every other developed economy on broadband speed and build out,” Larry Cohen, the C.W.A.’s president, said in a statement. “Today’s announcement of the acquisition of T-Mobile USA by AT&T is a victory for broadband proponents in both the U.S. and Germany.”

The C.W.A. will also have the chance to expand an ongoing effort to unionize T-Mobile USA workers. The group has already partnered with Germany’s ver.di union to create a new group, TU, to represent T-Mobile employees on both sides of the Atlantic.

“Hundreds of TU members in the U.S. will welcome this news since of all the possible partners, AT&T will mean better employment security and a management record of full neutrality toward union membership and a bargaining voice,” Mr. Cohen said in his statement. “For T-Mobile USA workers who want a voice in their workplace, this acquisition can provide a fresh start with T-Mobile management.”

In some ways, the C.W.A.’s support of the deal comes as no surprise. The union generally enjoys a good working relationship with AT&T, representing some 42,000 of the company’s wireless service employees. It also represents a fraction of Verizon Wireless workers.

Candice Johnson, a spokeswoman for the C.W.A., told DealBook that AT&T has already completed about 20 smaller deals, which led to the creation of jobs. Those transactions also offered workers the choice of union representation and collective bargaining rights.

By contrast, C.W.A. has clashed with other wireless companies, arguing that they contract out much of their work. Among these is Sprint Nextel, which also sought a deal with T-Mobile.

Still, there’s at least one prominent group that has come out against the deal: Consumers Union, which publishes Consumer Reports.

“From a consumer’s perspective, it’s difficult to come up with any justification or benefits from letting AT&T swallow up one of its few major competitors,” the group’s policy counsel, Parul P. Desai, said in a statement. She added, “We plan to work very closely with regulators and lawmakers to carefully scrutinize this deal and what it would mean to people’s pocketbooks.”

Here’s the full statement from the C.W.A.’s Mr. Cohen:

For more than a decade, the United States has continued to drop behind nearly every other developed economy on broadband speed and build out. The Federal Communications Commission sounded the alarm more than a year ago with its broadband report, and President Obama in his State of the Union address called for increased efforts to bring the U.S. back to global parity as a key stimulus for economic development.

Today’s announcement of the acquisition of T-Mobile USA by AT&T is a victory for broadband proponents in both the U.S. and Germany. For the U.S., it means that T-Mobile customers will get quick access to the AT&T network, soon to include LTE or data speeds of at least 10 megabits down stream. More important, as part of the deal, AT&T is committing to build out to nearly every part of the U.S. within six years. Both AT&T and T-Mobile use GSM technology so there will be the immediate benefit of shared spectrum. Other reported deals involving T-Mobile would have joined incompatible networks; not only would that have forced a rebuild but would have required new phones for T- Mobile customers.

In Germany, the cash deal will provide investment in parent Deutsche Telekom’s own fiber network, particularly important for DT’s principal owner, the German government.

CWA and ver.di, the largest union in Germany, have partnered to support T-Mobile workers in the U.S., and the global union movement has been a strong supporter of this effort. CWA and ver.di formed a joint union – TU – that represents T-Mobile workers on both sides of the Atlantic. Hundreds of TU members in the U.S. will welcome this news since of all the possible partners, AT&T will mean better employment security and a management record of full neutrality toward union membership and a bargaining voice. For T-Mobile USA workers who want a voice in their workplace, this acquisition can provide a fresh start with T-Mobile management. Some 42,000 ATT mobility employees are union represented.

As with any merger or acquisition involving large entities, oversight issues will be raised. We ask all those involved to balance the inquiry with adequate weight for broadband speed and build out, and employment and workers rights.

WSJ – NEW YORK (Dow Jones) – Shares of Motorola Mobility Holdings Inc. (MMI) and Motorola Solutions Inc. (MSI) rose as Motorola officially split Tuesday into two entities.

The division of Motorola, nearly three years in the making, marks the passing of an 82-year-old corporate icon and creates two more-focused companies. Motorola Mobility consists of its consumer-focused smartphone and set-top box business, while Motorola Solutions focuses on handheld communication devices and public-safety radios.

“This business is all about delivering world-class products into the marketplace, and that’s our focus as we go forward,” Motorola Mobility Chairman and Chief Executive Sanjay Jha said. “This is an important first step.”

Jha’s comments came after ringing the opening bell at the New York Stock Exchange. Greg Brown, president and CEO of Mobility Solutions, will be ringing the closing bell.

Still, there are concerns surrounding the split. Motorola Mobility is now a smaller player going up against bigger and more diversified rivals. It needs to find a way to make its Android-powered phones stand out and it will face increasing competition if, as expected, Apple Inc. (AAPL) lets Verizon Wireless market the iPhone.

Meanwhile, both entities may end up battling each other for corporate business, especially as companies look to replace their handheld communication devices with more powerful smartphones and tablets. Motorola Solutions could also be exposed to municipal budget pressures.

Motorola Mobility shares recently rose 8.9% to $32.93, while shares of Motorola Solutions, which opened lower, gained 1.5% to $37.85. Both entities began trading on the NYSE last month in the form of “when-issued” shares. “When-issued” trading helps investors determine the opening price for the new stocks before an official split.

Motorola’s bet on smartphones powered by Google Inc.’s (GOOG) software is starting to pay off, with the company in October reporting its third-quarter profit soared. Still, Motorola Mobility recorded an operating loss of $50 million through the first nine months of 2010 and $8 billion in sales. Motorola Solutions posted an operating profit of $612 million in the same time period and $5.6 billion in sales.

Jha said Motorola Mobility will about break even in the first quarter, with an operating loss in the mobile devices business offset by a profit in the home business. Motorola Mobility Chief Financial Officer Marc Rothman said the mobile devices business will be profitable for the full year.

A key concern for Motorola Mobility going forward is its relationship with Verizon Wireless, a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD). Motorola has been the main supplier to Verizon’s high-end Droid franchise, the focus of the carrier’s marketing muscle as it competes with the iPhone at AT&T Inc. (T).

That focus could change, especially if the iPhone comes to Verizon, but Jha said Motorola is diversifying to offset heightened competition at Verizon during the first quarter. Motorola is working to launch products with other carriers in the U.S.; China and Latin America will be more significant for the company in 2011 and the company will expand into the tablet market, Jha said.

“We continue to have a good relationship with Verizon and continue to be an important part of that portfolio,” he said. “We feel good that we have a strategy to mitigate some of the effects of the first quarter.”

Jha added that tablets will become “very important” for the company and it will introduce one soon, though he believes smartphones are “meaningfully more important” for Motorola in the long run.

The company plans to unveil details about new products–likely including a tablet–this week at the Consumer Electronics Show in Las Vegas.

Meanwhile, executives say Motorola will make smaller acquisitions to acquire talent, as well as reinvest research and development dollars in new technologies.

“It’s a competitive business and a volatile business, and it’s very important from a balance sheet perspective that we come out very strong,” Rothman said. “We’re going to be conservative and prudent with the cash we have.”

-By Steven Russolillo and Shara Tibken, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com

-Spencer E. Ante contributed to this article.

Forbes – AT&T has agreed to buy spectrum licenses in the 700 MHz frequency band from Qualcomm for $1.925 billion. The licenses are a part of Qualcomm’s FLO TV business, which the company said Monday it expects to shut down in March 2011.

The spectrum currently covers 300 million people nationwide, with 12 MHz going toward coverage of 70 million people in five U.S. metropolitan areas – New York, Boston, Philadelphia, Los Angeles and San Francisco.

Subject to regulatory approvals, the deal is expected to close in the second half of 2011. AT&T ( T – news – people ) says it expects to begin deploying the spectrum, which will “deliver substantial capacity gains” in areas where the coverage extends, which includes areas where iPhone service has been reported to be spotty such as New York and San Francisco, “once compatible handsets and network equipment are developed.”

The 700 MHz band spectrum was left open by television stations in the U.S. as they switched to all-digital over the last five years (Congress voted to require the switch to digital in 2005).

The deal provides an opportunity for AT&T to strengthen its 4G network plans on handheld devices and products like the iPad in areas that may have had customer complaints about coverage issues. Qualcomm ( QCOM – news – people ), which had been using the spectrum to power its FLO TV unit that broadcast live TV to mobile phones and handheld devices, is now looking at a nearly $2 billion deal to replace a program that never really caught on.

Both stocks were trading up in pre-market hours Monday, but lost those gains shortly after the bell. AT&T was down five cents at $29.16 and Qualcomm was down three cents at $49.43.

DALLAS (AP) – AT&T Inc. said Friday it will pay a quarterly dividend of 43 cents per share, up from 42 cents in previous quarters. The company’s board also authorized the repurchase of up to 300 million shares of stock.

The authorization represents approximately 5 percent of outstanding shares and has no expiration date. Based on Thursday’s closing price of $29.23, the buyback would total about $8.8 billion. The timing and nature of share repurchases are subject to market conditions and applicable securities law, the company said.

The dividend will be payable on Feb. 1, 2011, to stockholders of record on Jan. 7.

Shares fell 8 cents to $29.15 in afternoon trading.

Reuters – Sprint Nextel’s (S.N) failure to turn around its wireless subscriber business in a period when investors bet heavily on growth sent its shares down about 9 percent.

The No. 3 U.S. mobile operator promised a better fourth quarter, but did not specify if it would continue to lose subscribers or begin adding more high value, bill-paying customers again.

Helped by the EVO smartphone from HTC Corp (2498.TW), Sprint the No. 3 U.S. mobile operator, posted a third-quarter net loss of 107,000 customers who pay monthly bills compared with analyst expectations for a loss of 173,500 and losses of 801,000 customers a year earlier.

But this was not a big enough change for shareholders who had pushed its shares up 20 percent since late August in the hope this customer segment would start growing again in the third quarter.

“Expectations got ahead of themselves,” said Mizuho analyst Michael Nelson, who saw the results as a “vast improvement” from previous quarters, but he noted it would take Sprint “another couple of quarters to start growing the postpaid base.”

Sprint has struggled to retain customers since its 2005 purchase of Nextel Communications, which operated the iDen network that was incompatible with Sprint’s existing technology and does not support high speed Web surfing.

While the company has sought to address complaints over customer service issues and network problems, including a possible plan to combine the two networks, Sprint is still losing customers it acquired from Nextel.

Its rivals have fared much better.

Verizon Wireless added 584,000 postpaid customers in the third quarter and AT&T Inc (T.N), the No 2 U.S. mobile service and exclusive U.S. provider for Apple Inc’s (AAPL.O) iPhone, added 745,000 subscribers.

SMARTPHONES PRESSURE MARGINS

Like other wireless providers, Sprint is dependent on smartphones and new devices for growth. But it comes at a cost.

Reuters – Cisco Systems Inc (CSCO.O) launched a $599 home version of its TelePresence videoconference system and will begin selling it through Verizon Communications Inc (VZ.N).

Called “umi,” the device will go on sale at Best Buy (BBY.N). Cisco’s website will be available for pre-order from Oct. 6. It comes with a $24.99 monthly fee that affords users unlimited calls, video messaging and video storage, Cisco said in a statement.

Eric Bruno, Verizon’s vice president for consumer product management, said his company plans to be the first U.S. operator to resell the Cisco service, which will require subscribers to pay a monthly service fee.

Consumers will be able to use the service on existing high-definition TV, but will need to buy equipment from Verizon’s website or consumer electronics retailers.

Bruno said Verizon will sell the service to customers of its FiOS television and broadband Internet service.

The executive said the service will appeal to consumers who want a better-quality video service than today’s free Web chat services from rivals such as Skype and Google Inc (GOOG.O).

“Is everybody in the planet going to rush out and buy TelePresence box, no. Will a significant number of people be interested, yes,” Bruno said in a telephone interview.

Cisco’s TelePresence systems used by businesses can cost around $300,000 per unit. They feature high-quality video and sound, with limited delays, making users almost feel like they are meeting in person. (Reporting by Sinead Carew. Editing by Robert MacMillan)

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