FCC asks AT&T about spectrum claims

Reuters News
|
Posted: May 27, 2011 6:08 PM
FCC asks AT&T about spectrum claims

WASHINGTON (Reuters) - Federal telecommunications regulators have asked AT&T Inc for more information on its planned merger with T-Mobile USA, including claims on spectrum shortages, coverage overlaps and plans to close facilities.

AT&T's plan to buy T-Mobile USA from Deutsche Telekom AG for $39 billion has been attacked as a bad idea because it would further reduce the number of wireless carriers.

The Federal Communications Commission, in a filing posted on its website on Friday, asked the companies for all analyses and plans it had drawn up to deal with spectrum shortages.

AT&T, the second largest wireless carrier, had cited spectrum shortages as the key reason for its decision to buy T-Mobile USA, the fourth largest U.S. mobile provider.

The deal would vault AT&T over current market leader Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc.

The FCC, which must approve the deal for it to go forward, asked for information about under-used capacity, and the companies' future plans. It also had questions about whether subscribers who changed to another company did so because of pricing issues or service quality.

The agency asked for a list of areas where AT&T would no longer need to arrange roaming agreements.

The FCC said it wanted AT&T and T-Mobile USA to provide any plans it had drawn up to raise prices or change other terms for providing "backhaul" -- the wired network that connects cellular towers -- to small carriers.

This issue has been hotly discussed as smaller carriers say they fear that a bigger AT&T would charge them more for leasing wired connections to their cellular towers -- potentially pricing them out of the market.

AT&T has sought to allay those worries by saying that also must buy backhaul, and that it is good business for them to continue selling it.

Among other points, the FCC asked for information about coverage overlaps between AT&T and T-Mobile USA's network -- where cell sites or other facilities would be consolidated and or decommissioned as a result of the merger.

In addition to the FCC, the Justice Department must approve the deal. AT&T notified five states about it. Louisiana has said it will open an investigation of the deal while California is also mulling a review.

If approved as proposed, the deal would concentrate 80 percent of U.S. wireless contract customers in just two companies: AT&T/T-Mobile and Verizon Wireless. Additionally, critics say the loss of discount carrier T-Mobile USA could lead to higher prices for consumers.

Critics of the deal include No. 3 U.S. mobile provider Sprint Nextel.

(Editing by Richard Chang)