AT&T wins approval of Alltel purchase, but with conditions
The FCC on Friday approved AT&T Mobility's (NYSE:T) proposed $780 million purchase of Atlantic Tele-Network's retail wireless business, which still operates under the Alltel brand. However, the agency said the transaction "will likely cause some competitive and other public interest harms in several local markets" but that it is approving the deal due to AT&T's acceptance of a number of conditions on the transaction, including that AT&T maintain Alltel's CDMA network through June 2015.
Winning FCC approval likely comes as a relief to AT&T; the FCC in August stopped its review of AT&T's transaction with ATN because the agency said AT&T had not provided enough information about how it will transition Alltel's remaining prepaid customers to its network.
The FCC said AT&T agreed to several conditions as part of its acquisition of ATN. Specifically, AT&T agreed to cover Alltel's CDMA network footprint with its own HSPA network. AT&T said that 100 percent of the population covered in the markets would be able to access to HSPA+ services on AT&T's network within 15 months of the closing of the transaction. Further, AT&T around 75 percent of the population covered in the markets will have access to LTE services on AT&T's network within 18 months of closing, and approximately 85 percent within 36 months of closing.
AT&T also agreed to continue maintain Alltel's 3G EV-DO network until at least June 2015, mainly in order to provide roaming services to Alltel's current roaming partners including Blue Wireless and others.
Finally, AT&T said it will offer Alltel customers "a handset comparable to his or her existing handset, at no cost to the customer and without requiring a contract extension."
AT&T agreed to provide the FCC with progress reports on its efforts.
Under the transaction, first announced in January, AT&T will acquire ATN's spectrum licenses, 620,000 customers, network assets and retail stores. As of January the Alltel network covered around 4.6 million people in primarily rural areas across Georgia, Idaho, Illinois, North Carolina, Ohio and South Carolina.
In 2010, ATN purchased for $200 million Alltel assets divested by Verizon Wireless (NYSE:VZ) as part of Verizon's larger deal for Alltel.
The transaction is AT&T's latest to win approval from the FCC. Earlier this month the agency consented to AT&T's purchase of 39 lower 700 MHz B Block spectrum licenses from rival Verizon. Just prior to that, AT&T agreed to end a long-running dispute over 700 MHz interoperability with the promise to support Band Class 12 devices--a significant win for smaller 700 MHz A Block licensees. Acting FCC Chairwoman Mignon Clyburn reportedly played a key role in obtaining the 700 MHz interoperability agreement.
AT&T 'extremely disappointed' with FCC's delay in Alltel purchase review
AT&T to acquire Alltel's spectrum, remaining customers for $780M
ATN will keep the Alltel brand, 'Chad' TV spokesman
ATN gets Justice Dept. approval for Alltel asset deal
ATN creating new company to run former Alltel properties