BellSouth and AT&T might have a difficult time getting their merger approved by the Federal Communications Commission and the Justice Department as several congressmen are urging a delay and spectrum divestitures. House Judiciary Committee Chairman James Sensenbrenner (R., Wis.) and Rep. John Conyers (D., Mich.),wrote to the Justice Department asking to postpone the merger's antitrust review until a federal judge decides whether the Verizon/MCI and SBC/AT&T mergers are in the public interest.
Sen. Mike DeWine (R-Ohio), chairman of the Senate Judiciary antitrust subcommittee, and Sen. Herb Kohl (D-Wis.) are urging the DOJ and FCC to force AT&T and BellSouth to divest their 2.3 GHz and 2.5 GHz spectrum holdings as a stipulation to the $67-billion merger to prevent any anticompetitive warehousing of the spectrum. They fear the combined company will have little incentive to deploy WiMAX because such a move would cannibalize their own customers. The Senators want these agencies to "take whatever steps are appropriate to assure that competitive WiMAX services have the opportunity to develop freely in the marketplace, including the divestiture of spectrum if such divestiture is found necessary."
First off, why is WiMAX mentioned specifically? The government is supposed to be technology neutral and there are several technologies that will be able to run in these bands. But there's word that Clearwire is spearheading this lobbying effort because it needs more 2.5 GHz licenses to bolster its footprint. Secondly, the FCC and DOJ have already set a precedent by allowing Sprint to merge with Nextel to become the largest holder of 2.5 GHz spectrum. The same anti-competitive fear arose with those two companies in terms of warehousing spectrum. The solution was requiring Sprint Nextel to launch services by 2008.
- the Verizon/MCI deal still under scrutiny