AT&T Buy of T-Mobile, Qualcomm Spectrum, Should Be Reviewed Together, Opponents Say
The battle lines formed more clearly Wednesday over whether the FCC should approve AT&T’s application to buy T-Mobile. Four of AT&T’s main competitors and two associations representing smaller carriers formally asked the FCC to consolidate its review of the merger with a review of AT&T’s proposal to buy $1.9 billion in spectrum licenses from Qualcomm. Separately, five public interest groups asked the FCC to reject the Qualcomm purchase outright, or at least consolidate the review of the two transactions. AT&T and T-Mobile sought review of their merger in filings at the FCC last week (CD April 22 p1).
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Sprint Nextel, MetroPCS, Cincinnati Bell Wireless, NTELOS, the Rural Cellular Association and the Rural Telecommunications Group filed a motion at the FCC seeking to consolidate the reviews. The deals should be looked at together since they mean AT&T will get spectrum in overlapping markets, they said. In the Qualcomm deal, AT&T seeks to acquire Qualcomm’s six Lower 700 MHz D Block licenses, with a nationwide footprint, and five Lower 700 MHz E Block licenses in five large markets, the motion said.
"The T-Mobile transaction includes the acquisition of an additional 50 MHz on average in the same geographic areas covered by the proposed Qualcomm transaction,” the letter argues. “Obviously, with such an overlap, these two transactions should be examined together, rather than separately."
"It is clear that AT&T is doing everything possible to gain market dominance by making not one but two major spectrum grabs in the proposed Qualcomm and T-Mobile transactions,” said Steve Berry, RCA president. “The FCC must look at the bigger picture here, and understand the devastating impact that these two transactions, if allowed as proposed, would have on the wireless marketplace."
Free Press, the Media Access Project, Public Knowledge, Consumers Union and the Open Technology Initiative of the New America Foundation also called for a combined review. “Both the T-Mobile merger and the Qualcomm license transfer, if approved, would further empower an already dominant wireless carrier to leverage its control over devices, backhaul, and consumers in ways that stifle competition,” said the public interest group letter. “As with other mergers, the competitive impact of the two transactions in combination may be even greater than the impact of each separately.”
AT&T countered that combining the review of the two transactions makes no sense. “These are two completely separate proceedings and should remain so,” AT&T said in an emailed response. “The FCC has been fully briefed by all interested parties on our application to acquire spectrum from Qualcomm. We are now at day 77 of the 180-day shot clock and we urge the Commission to expeditiously grant our application."
MF Global analyst Paul Gallant predicted the commission will end up handling the two deals separately. “I tend to doubt the FCC would combine AT&T’s proposed purchases of T-Mobile and Qualcomm assets in a single proceeding,” agreed Jeff Silva, with Medley Global Advisors. “At the same time, as a practical matter, FCC officials are not apt to evaluate each of the two transactions in a vacuum. I'm confident the common denominator in both deals -- AT&T spectrum acquisition -- is not lost on the commission or the Justice Department.”