Maybe the blocking of the proposed AT & T/T Mobile merger by the US Justice Department is not so surprising after all.

Commentators were surprised because negotiations with the Justice Department were ongoing, and the AT and T lobbying team in Washington was led by the successful and experienced Jim Ciocone who has worked in the Reagan and Bush Administrations. Those were of course Republican regimes and I just wonder if enough adjustment has been made to accommodate the differing negotiation needs of a Democrat-led Administration?

Republican regimes are notoriously business-led and the Justice Department in previous eras will have wanted to align itself with big business – it will have almost had a “belonging” need in this respect. The Democrats will have a different agenda – including a “respect” need for their policy agenda which would be more focused on the outcome for consumers and less on the interests of big business. Given the perilous state of the jobs market there may also have been a “reassurance” need that the merger would not reduce levels of employment through rationalisation.

On the AT & T side the agenda would seem to be driven by an “achievement” need for Chief Executive Randall Stephenson and his Board – perhaps that got in the way of a full perception of what the DOJ actually required. A clue to the fact that there may have been a mismatch in terms of addressing underlying needs is that the disapproval of the deal seems to have happened so suddenly and been such a surprise to commentators.

If one side’s needs are not being met at the “exploration” stage of a negotiation then this often surfaces when “bids” are made, as there is then a big gap between what each side expected from the other. This can often trigger a sudden collapse in negotiations as seems to have happened here, with the DOJ claiming that the proposed acquisition is “fundamentally flawed” and that “none of its competition concerns are being met”. The terminology of one insider, suggesting that the two sides were “talking past each other” may bear out this interpretation of events.

How to get things back on track? Usually when the parties get a stage of the negotiation wrong, they have to go back and revisit it before things can move forward. So, it may be back to the exploration stage for AT and T, this time with a hawk-eye for what the Department of Justice really needs from the negotiation. The alternatives – Court action, or walk away from the deal and pay penalties to T Mobile’s owner (Deutsch Telekom), don’t look too attractive…