The FCC has just informed good ol’ big blue that its proposed acquisitions of T-Mobile and Qualcomm’s 700MHz spectrum will be informally reviewed together, rather than as separate transactions. This wouldn’t really be a big deal except for the fact that AT&T may be biting off more than it can chew. By reviewing the two proposed acquisitions together, the FCC is forcing AT&T to justify such massive purchases of spectrum.
In a letter to both AT&T and Qualcomm, the FCC writes: “The Commission’s ongoing review has confirmed that the proposed transactions raise a number of related issues, including, but not limited to, questions regarding AT&T’s aggregation of spectrum throughout the nation, particularly in overlapping areas. As a result, we have concluded that the best way to determine whether either or both of the proposed transactions serve the public interest is to consider them in a coordinated manner at this time.”
Well, AT&T may not be too happy to hear that, but we’re glad the FCC plans to proceed with caution. The acquisition of these companies’ spectrum is a coordinated effort by AT&T. That’s not to say that AT&T has some evil genius plot to screw us by taking over the world one spectrum acquisition at a time, but more that these purchases could inadvertently disrupt innovation, raise prices, and a bevy of other fateful consequences.
Then again, the acquisitions could just lead to my AT&T iPhone getting some service for a change.
Update: AT&T has responded with the following statement:
“We believe the Qualcomm transaction stands on its own merits. We are pleased that the Commission has rejected calls to officially consolidate the two deals and has expressly preserved the ability for the Qualcomm application to be resolved in advance of the T-Mobile application. We remain confident that the FCC will approve the license transfers as consistent with the public interest.”
Update 2: Qualcomm’s VP of government affairs, Dean Brenner, has also responded with the following statement:
“The FCC should approve the pending AT&T-Qualcomm spectrum sale now because of the clear benefits to the public from the sale that stand on their own and are totally unrelated to the proposed AT&T-T-Mobile merger. Approval now will foster the public policies that the FCC correctly deems so vital for the American public. Approval now will re-purpose unused 700 MHz unpaired spectrum for mobile broadband, thereby easing America’s spectrum crunch and helping to meet the FCC’s goal of reallocating 300 MHz for mobile broadband over the next five years. Approval now will also allow Qualcomm to invest in a new, spectrally efficient technology (supplemental downlink) and enable the first worldwide deployment to occur in the U.S., thereby fostering U.S. economic growth and job creation and enhancing U.S. global leadership in wireless technology.”