Verizon to buy $3.6 billion of spectrum from SpectrumCo

With the AT&T/T-Mobile merger fresh in the minds of the public, it’s hard to think of a carrier buying spectrum being a well received word. With its latest deal, Verizon hopes to change the tone with a mostly inoffensive way of insuring a rich LTE future – buying spectrum from large cable companies with no tangible plans of developing wireless networks. These companies include Comcast, Time Warner Cable, and Bright House under the banner of “SpectrumCo”, all of whom had some spectrum banked in case they chose to branch out in the future.

AT&T will likely help build the precedent that allows this deal with their impending purchase of 700 MHZ spectrum from Qualcomm, signaling that purchasing from non-competitive companies doesn’t fuel the flames of antitrust violations. Verizon clearly has much to gain from this deal, but the detail that makes this interesting for consumers is that this spectrum is from the AWS frequency range; since Verizon’s current LTE network is based on the 700 MHZ band, future devices will likely support hybrid 700/AWS bands bringing Big Red into alignment with AT&T. Device interoperability is unfortunately markedly less common in the United States than other countries, so any degree of shared technology is a boon to consumers.

This $3.6 billion deal is subject to FCC approval, so keep an eye out for more news on this matter as legal proceedings commence.

Source: Comcast | Via: The Verge

AT&T/T-Mobile merger strategy shifts to risky Plan B

The final chapter in the AT&T/T-Mobile merger seems to have finally arrived; after the disapproval of both the Department of Justice and Federal Communications Commission, AT&T withdrew their application from the FCC to supposedly negotiate drastic measures. Early rumors from Bloomburg suggested that AT&T is now willing to divest up to 40% of T-Mobile’s assets (customers, spectrum) to let the deal go through. The New York Times has brought that rumor to the next level with word that AT&T was now talking directly to Leap Wireless, a small no-contact company with about seven million customers that operates Cricket and Jump Mobile.

Andrew Ross Sorkin at the NYT went on to say that this strategy is as big a ‘Hail Mary’ pass as the original proposal to merge with T-Mobile, as AT&T’s 100 million customers and T-Mobile’s 33 million customers make Leap Wireless look like a start-up. Even with the divested assets, Leap would barely be able to compete with Sprint and MetroPCS, let alone apply any price pressure to the duopoly that is currently (and would be after this merger) Verizon and AT&T. Needless to say, these rumors mark the end of this saga either way – AT&T won’t see another chance after this one, likely choosing to save face and fully withdraw if the DOJ shuts this latest offer down.

Source: New York Times

DOJ seeks to block AT&T/T-Mobile merger

In a stunning move that’s sure to be just another chapter in the AT&T/T-Mobile merger, the Department of Justice has decided to file an antitrust complaint with the FCC. Citing “higher prices, fewer choices, and lower quality products” for consumers, the DOJ hopes to block the merger pending likely appeals from both AT&T and Deutsche Telekom. If the block does go through, At&T will also have to pay about $3 billion in both capital and roaming access, which means T-Mobile might end up looking a lot more appealing to consumers as a separate entity in the short term.

As always, each of the parties in this lawsuit have released public statements reaffirming their positions and all promising to make this just a stepping stone to their eventual ends -

AT&T

We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated.

We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed. The DOJ has the burden of proving alleged anti-competitive affects and we intend to vigorously contest this matter in court.

At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will:

·         Help solve our nation’s spectrum exhaust situation and improve wireless service for millions.

·         Allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97% of the population;

·         Result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most.

We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court.

Deutsche Telekom

On August 31, 2011, the United States Department of Justice (DOJ) informed Deutsche Telekom that it will file a complaint in the U.S. District Court for the District of Columbia seeking a permanent injunction blocking the proposed stock purchase agreement between AT&T and Deutsche Telekom under which AT&T will acquire T-Mobile USA from Deutsche Telekom.

Deutsche Telekom is very disappointed by the DOJ’s action, and will join AT&T in defending the contemplated merger against the complaint in court. DOJ failed to acknowledge the robust competition in the U.S. wireless telecommunications industry and the tremendous efficiencies associated with the proposed transaction, which would lead to significant customer, shareholder, and public benefits. We appreciate the DOJ’s willingness to discuss possible remedies to address the competitive concerns.

FCC’s Julias Genachowski

By filing suit today, the Department of Justice has concluded that AT&T’s acquisition of T-Mobile would substantially lessen competition in violation of the antitrust laws. Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile.  Competition fosters consumer benefits, including more choices, better service and lower prices.

For more information on this case, check out Nilay Patel’s analysis at the via link and the full Department of Justice filing at the source.

Source: DOJ filing | Via: This is my next

AT&T filing calls necessity of T-Mobile for LTE deployment into question

Last Thursday, AT&T unintentionally leaked a filing made with the FCC discussing in detail some of the finer points of their argument for merging with T-Mobile. While many of the statements easily viewed (though the document is lengthy) on this redacted version aren’t news, one particular point has fallen under scrutiny and led many to believe that AT&T’s intentions aren’t quite what they claim.

Slightly more context is necessary before this point has much gravity. In most of the arguments made in AT&T’s appeals to the FCC encouraging their merger with T-Mo, they state that LTE deployment is slow and the latter’s network and spectrum can help bolster their own to accelerate coverage. Much of this coverage would be made available to rural areas, considering the fact that AT&T’s original plans supported 80% of the population and these more optimistic ones claim 97%. Rural coverage is crucial to this deal due to the fact that government has recently strongly supported nationwide broadband and their capacity to handle that first-hand is a far cry from previous success with telecommunications.

The merger between these two colossal carriers would cost AT&T approximately $39 billion, which they claim is worth it for the broad revenue channels the smaller company could provide. This chief issue, however, has been revealed to cost a much less substantial $3.8 billion if the merger doesn’t go through. While AT&T have since claimed that the revenue benefits more than justify this exchange, the simple fact that 97% LTE deployment is well within the company’s reach sans T-Mobile may prove to be a crippling factor when dealing with the FCC. The Federal Communications Commission’s job is to determine whether or not the advantages of mergers like this outweigh the distinct disadvantages of elimination of competition. In a market as competitive and cornered by few superpowers as this, a slip-up as small as a leaked filing could make all the difference.

Source: DSLReports, Wireless Week | Via: Electronista | Image: Engadget