AT&T, Verizon Wireless Say Spectrum Deal Will Cause No Competitive Harms
AT&T, Verizon Wireless and Grain Spectrum said in a filing at the FCC that a series of spectrum deals unveiled last month (CD Jan 28 p9) are in the public interest and should be approved by the commission. The transaction was criticized by the Competitive Carriers Association and public interest groups when it was announced. The Competitive Carriers Association said it “raises serious spectrum aggregation concerns.”
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"These spectrum transfers are fully consistent with recent Commission orders finding that AT&T’s purchase of 700 MHz spectrum and Verizon Wireless’ purchase of AWS spectrum serve the public interest,” said a public interest statement by AT&T, Verizon and Grain. “These assignments would achieve the same public interest benefits by putting spectrum to use to benefit consumers and help AT&T and Verizon Wireless provide high-quality, high-speed wireless broadband.” AT&T said it already has equipment on hand to deploy service to “approximately 80 percent of the total population in the license areas where AT&T will acquire or lease the spectrum.”
Under the deal, AT&T plans to buy 39 of Verizon Wireless’s lower 700 MHz B-block licenses in exchange for $1.9 billion cash and the transfer of several AWS licenses. The two carriers also unveiled related spectrum agreements through private equity firm Grain. AT&T said it will lease three 700 MHz B-block licenses in North Carolina that Verizon Wireless is selling to Grain for $189 million -- those cover the Charlotte, Greensboro and Raleigh-Durham markets. AT&T also plans to sell to Grain an AWS license covering Dallas, which Verizon Wireless will then lease. The filing notes that Grain is a minority-owned business.
"There are no potential harms to competition,” the filing said. “The spectrum-only assignments and leases here do not involve the transfer of any business facilities or other assets or customers. Nor will they reduce the number of choices wireless consumers have today or increase AT&T’s or Verizon Wireless’ market shares.” The filing said the extra spectrum would push AT&T’s spectrum holdings over the current spectrum in just one cellular market area and “even there the presence of multiple competitors precludes any risk of potential competitive harm from spectrum aggregation."
The carriers “made a good opening case … for why regulators should approve their proposed spectrum transactions, reinforcing our belief the deals won’t be blocked outright,” Stifel Nicolaus said Thursday in a research note. “We nevertheless expect critics to push back hard in opposition, and seek spectrum screen modifications, divestitures, and other regulatory conditions. We also expect critics to attack AT&T’s separate planned purchase of wireless systems from Atlantic Tele-Network.”