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CCA blasts AT&T spectrum purchases, urges regulators to consolidate review

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The Competitive Carriers Association again urged the FCC to combine AT&T Mobility's (NYSE:T) various spectrum purchases into one comprehensive transaction that the agency could more effectively review. AT&T, for its part, staunchly argued against such a move, contending it would "introduce delay that is contrary to the public interest."

"Allowing the largest carriers to obtain unlimited amounts of  spectrum on the secondary market raises serious competitive concerns," said CCA President and CEO Steven Berry. "The only way for the FCC to truly see the devastating consequences of further spectrum aggregation is by consolidating the proposed applications. On their own, AT&T's proposed license acquisitions may not seem significant, but when added together, it totals to a significant amount of spectrum."

In the group's filing, CCA pointed to more than a dozen different transactions in which AT&T is working to acquire 700 MHz, AWS and WCS spectrum. Specifically, AT&T is looking to acquire:

  • 2.3 GHz WCS spectrum from NextWave Wireless, Comcast and Horizon Wi-Com;
  • 700 MHz spectrum from 700 MHz L.L.C., Cavalier Wireless, Ponderosa Telephone Co., David L. Miller, Comsouth Cellular, Farmers Telephone Company, CenturyTel Broadband Wireless and McBride Spectrum Partners;
  • And AWS spectrum from CenturyTel Broadband Wireless and Cavalier Wireless.

"Viewed in isolation, each individual application might appear relatively unlikely to harm competition, but each transaction in which AT&T increases its overall spectrum holdings to the competitive disadvantage of other carriers is part of a larger wave of consolidation, and the Commission must take a holistic look at the impact of this ongoing spectrum aggregation on competition and consumers," CCA argued.

Not surprisingly, AT&T in its counter filings said the FCC should not take a comprehensive look at its individual spectrum purchases.

"AT&T's transactions are independent of one another and involve different parties and different geographic areas. The Commission routinely denies consolidation of transactions that are not contingent on each other, and it should follow that precedent here," AT&T wrote, noting that its spectrum purchases would benefit the public by allowing the carrier to bolster its 700 MHz network. AT&T said the extra spectrum would in some places allow it to deploy LTE in a 10x10 MHz configuration instead of a slower 5x5 MHz configuration.

If the FCC does consolidate its review of AT&T's various spectrum purchases, CCA said the agency should impose two stipulations on AT&T: the carrier should provide "seamless interoperability" across the Lower 700 MHz band and should ensure the availability of data roaming "on reasonable terms and conditions."

AT&T pushed against those stipulations, arguing the FCC should handle 700 MHz interoperability in a separate proceeding. The FCC has had a 700 MHz interoperability proceeding open since March. 

The dust-up between CCA and AT&T is notable in light of AT&T's failed $39 billion acquisition of T-Mobile USA. Regulators withheld approval of the deal over concerns it would stifle competition in the market.

However, Verizon Wireless (NYSE:VZ) recently won federal approval of its $3.9 billion purchase of AWS spectrum from a group of cable companies.

Further clouding the issue is the FCC's plan to explore rules that determine the agency's so-called spectrum-screen, which it uses when reviewing spectrum transactions. If a carrier acquires too much spectrum and violates the screen, the deal is more closely scrutinized. Currently, the screen is different for each proposed transaction.

It's unclear if AT&T's proposed spectrum transactions will be affected by the FCC's spectrum-screen proceeding.

For more:
- see this CCA release
- see these two CCA filings with the FCC (PDF)
- see this AT&T FCC filing (PDF)

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