FCC Issues Orders in Advance of AT&T/T-Mobile Filing

AT&T and T-Mobile are expected to formally seek FCC approval in a filing “around” April 21. The protective order would clear the way for AT&T to submit confidential information when it makes its filing. Industry opposition is likely to become louder and more aggressive after AT&T files at the commission, industry officials say. The transaction was announced on March 20.

FCC officials said Thursday no decision has been made on whether to seek broader information on the state of the industry from other carriers, as regulators have in a few past mergers. Officials also declined to comment on when a review may be complete. In 2004, the Justice Department asked for a huge amount of information from other carriers on the individual customers they serve, as DOJ expanded its investigation of AT&T Wireless’ buy of Cingular. A wireless industry attorney said DOJ, which has subpoena power, takes the lead in requesting such information that is then made available to the FCC.

Also still under review is the level of spectrum in each market that will be used as “screen” or “soft cap” as regulators perform a market-by-market analysis. The FCC pays extra attention to markets where holdings are above the screen. The level tends to change as additional spectrum comes online, FCC officials told reporters during a media briefing on Thursday. The ground rules were that they could not be identified by name. In a 2010 order approving the transfer of licenses from Verizon Wireless to AT&T, the commission used a complicated formula starting at 95 MHz or more of PCS, SMR, and 700 MHz spectrum, in markets where neither Broadband Radio Service nor AWS-1 spectrum is available.

The protective order released Thursday is similar to orders issued prior to the filing of merger documents in the Cingular Wireless-AT&T and Verizon-MCI acquisitions, an FCC official said. The agency declared the ex parte status of the XM-Sirius transaction before it was filed at the agency.

Sprint Nextel reiterated its opposition to the deal, in a written statement Thursday. “We are confident the DOJ and FCC will evaluate this acquisition on its merits and conclude that it must be blocked to prevent the creation of a duopoly in the wireless industry that would stifle innovation and investment, limit choice for consumers and create leverage to raise prices,” said Vonya McCann, senior vice president.

"A combined AT&T and T-Mobile means a wireless market dominated by two companies -- AT&T and Verizon -- with little incentive to offer lower rates or better service, leaving consumers hanging in the balance,” said Parul Desai, policy counsel at Consumers Union. “Our concern is if T-Mobile is out of the wireless market, many consumers who really need a low-cost carrier will have even fewer options for national service."

AT&T Vice President Joan Marsh countered with a defense of the transaction, in a posting on the company’s blog. “The result of the combination will be extraordinary: the denser network of cell sites will drive capacity improvements and speed gains; spectral efficiencies will be gained by the combinations of two 2G networks into one, including less spectrum used for call set up and control, and more opportunities to migrate bands to support mobile broadband services,” she wrote. Marsh emphasized that the industry will continue to need more spectrum: “We will continue to work for enactment of spectrum reform legislation, including incentive auction authority for the FCC.”