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AT&T Gets Approval For Qualcomm Spectrum Deal

December 23, 2011

No. 2 mobile phone company AT&T Inc. announced Thursday that it has received all required regulatory approvals from the Federal Communications Commission (FCC) for its acquisition of Qualcomm spectrum.

AT&T said a year ago that it planned to buy 700MHz spectrum licenses covering more than 300 million people for about $1.9 billion. AT&T needed the spectrum to add capacity to its 4G network, which it has been gradually rolling out.

Mobile tech company Qualcomm had used the spectrum for its FLO TV mobile television service, but after weak consumer interest it had shut down the service.

Although having some concerns with competitiveness, the FCC gave approval of the deal with some conditions, including AT&T not using the airwaves in a way that would interfere with wireless carriers. It also said AT&T would have to offer data roaming to its competitors.

Given the conditions imposed, the deal “would not result in competitive harm that would outweigh the public interest benefits of this transaction,” the FCC said in its order. The agency said the deal would support “our goal of expanding mobile broadband deployment throughout the country.”

Julius Genachowski, chairman of the FCC, recommended on November 22 that fellow commissioners approve the deal, the same day that he moved to oppose AT&T´s proposed merger with T-Mobile USA.

The Qualcomm spectrum approval comes just days after AT&T abandoned its bid to acquire T-Mobile USA for $39 billion, due to stiff opposition from federal regulators worried the deal would drive up prices and harm competition in the mobile market.

“This spectrum will help AT&T continue to deliver a world-class mobile broadband experience to our customers,” said AT&T senior vice president Bob Quinn. “We appreciate the FCC Chairman, the Commissioners and their staff for completing its review before the holidays.”

“As spectrum is the lifeblood of the U.S. wireless industry, we are pleased that the FCC did not reduce the spectrum screen, however, we continue to believe any changes to the process by which it is allocated should be subject to open and transparent public discussion and clear to everyone with an interest in ensuring the health of our industry,” Quinn said.

Although the FCC said the Qualcomm spectrum deal would not harm competition, the Rural Cellular Association said in a March filing that the transaction would “diminish competition in the already overly concentrated wireless marketplace.”

Rural phone companies had asked the FCC to use the Qualcomm deal to ensure their customers can use AT&T airwaves. Their customers´ data connections may not work when they travel away from their home service area and cannot operate on airwaves assigned to the dominant wireless carriers: AT&T and Verizon Wireless, said Steven Berry, president of the Rural Cellular Association, ahead the ruling yesterday.

AT&T “doesn´t need this spectrum to improve its own offerings,” Matt Wood, policy director of Free Press, a nonprofit dedicated to promoting media diversity, told Bloomberg News. “AT&T can and should upgrade its own networks to provide better service to customers.”

The AT&T-Qualcomm deal is expected to close in the coming days.

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Source: RedOrbit Staff & Wire Reports



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