The Federal Communications Commission did not look too kindly upon AT&T's bid to purchase T-Mobile, but the agency yesterday did approve AT&T's acquisition of spectrum from Qualcomm—with conditions.
The FCC voiced some competitive concerns about the deal.
"Post-transaction, AT&T would hold a significant proportion of the available spectrum suitable for the provision of mobile voice or broadband services, particularly below 1 GHz spectrum, that has technical attributes important for other competitors to meaningfully expand their provision of mobile broadband services or for new entrants to have a potentially significant impact on competition," the commission said in its order.
As a result, the FCC imposed a few conditions on the transaction, like requiring that AT&T's new spectrum doesn't stop rivals from using neighboring 700 MHz spectrum for broadband services and limiting AT&T's ability to use the Qualcomm spectrum in a way that would deprive rivals of the benefits of FCC's roaming rules.
In a statement, AT&T said it expects to close the transaction in the coming days.
"This spectrum will help AT&T continue to deliver a world-class mobile broadband experience to our customers," Bob Quinn, senior vice president of federal regulatory issues at AT&T, said in a statement. "We appreciate the FCC Chairman, the Commissioners and their staff for completing its review before the holidays."
In December 2010, Qualcomm announced that it would sell its Lower 700 MHz D and E block spectrum licenses to AT&T for $1.925 billion. Qualcomm was using the spectrum for its FLO TV digital mobile TV business, but announced last year that it would be shut down by March 2011. AT&T plans to use the spectrum as a supplemental downlink for its 4G network via carrier aggregation technology.
"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 continued.
AT&T has had a rather prickly relationship with the FCC of late. The commission recently found that AT&T's attempted purchase of T-Mobile would not be in the public interest and would result in massive layoffs. As a result, it recommended the deal be sent to an administrative law judge; the FCC's way of rejecting it. At the same time, the FCC also released a staff report that included the (redacted) information its office had received about the deal, prompting AT&T to accuse the commission of being biased and hypocritical.
Given that the Department of Justice was also suing to block the T-Mobile merger, meanwhile, AT&T eventually decided to ditch the deal, taking a $4 billion charge in the process.