The FCC is asking AT&T (NYSE:T) to provide more details on why it wants to acquire T-Mobile USA. This request comes after an unredacted copy of a document was accidentally uploaded to the FCC website with information that indicated that AT&T had considered and rejected a plan to on its own expand its network to cover 97 percent of the U.S. market for a cost of $3.8 billion.
AT&T is purchasing T-Mobile USA for $39 billion, which is about 10 times that amount, and the company is arguing that it must acquire T-Mobile, in part, in order to expand its LTE network to cover 95 percent of the U.S. population.
AT&T spokesman Michael Balmoris told the Wall Street Journal that FCC requests for more information on deals of this size are normal practice, and he added that the redactions to the document that were initially revealed were intended to be confidential and not for public view. The unredacted version of the filing was quickly replaced with an edited version. Nevertheless, some media outlets did receive the unredacted version and have reported on AT&T's network expansion plans.
AT&T CEO Randall Stephenson said earlier this summer that that if the company's proposed $39 billion purchase of T-Mobile USA is approved by regulators, AT&T will still spend $8 billion over three years to expand LTE coverage to 97 percent of Americans. In addition, the company has said that the acquisition will create economies of scale and make it more affordable for AT&T to provide mobile broadband service in sparsely populated areas.
Meanwhile, competitor Sprint Nextel (NYSE:S), which is vehemently opposed to the acquisition, has asked the FCC to set a hard deadline of Sept. 1 for AT&T Inc. to make its case for purchasing T-Mobile. Sprint has argued that AT&T's economic justifications for the merger are flawed.
For more:
- see this Wall Street Journal article (sub. req.)
- see this Bloomberg article
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