AT&T Acquires Lower 700 MHz Spectrum in Alabama

The Wireless Bureau (the “Bureau”) has approved a transaction that will result in AT&T acquiring additional Lower 700 MHz spectrum.  Post transaction, AT&T would hold more than one third of the currently suitable and available below-1-GHz spectrum in the market area, therefore triggering the enhanced factor review.  The Bureau finds that the likelihood of competitive harm is low and that the public interest would be served.

AT&T Inc. and New Cingular Wireless PCS, LLC/Farmers Telecommunications Corporation involves the assignment of one Lower 700 MHz C Block license covering one Cellular Market Area (CMA) in Alabama.  Through this license, AT&T would acquire 12 megahertz of low-band spectrum in 3 counties in this CMA.  Post-transaction, AT&T would hold 115 megahertz to 125 megahertz of spectrum in total, including 55 megahertz of below-1-GHz spectrum, in Alabama 2 – Jackson.  The transaction does not result in the acquisition of wireless business units and customers, so the Bureau does not apply the initial HHI screen in its analysis.  The total spectrum screen is not triggered by the transaction, either.

Market-Specific Review: Under the market-specific review, the following variables are considered to help predict the likelihood of competitive harm post-transaction:

  • the total number of rival service providers;
  • the number of rival firms that can offer competitive service plans;
  • the coverage by technology of the firms’ respective networks;
  • the rival firms’ market shares;
  • the combined entity’s post-transaction market share and how that share changes as a result of the transaction;
  • the amount of spectrum suitable for the provision of mobile telephony/broadband services controlled by the combined entity; and
  • the spectrum holdings of each of the rival service providers.

In its analysis, the Bureau finds that, with respect to below-1-GHz spectrum, Verizon holds 47 megahertz, Sprint holds 14 megahertz, and T-Mobile holds 12 megahertz, covering approximately 17 percent of the population of this CMA.  Cellular South d/b/a C Spire holds 12 megahertz covering approximately 83 percent of the population.  Post-transaction, AT&T would hold 55 megahertz of spectrum below 1 GHz, while the other three nationwide service providers hold 60 megahertz to 175 megahertz of spectrum.  Based on these holdings, and the fact that the CMA is a rural market, the Bureau determined that the likelihood of competitive harm is low.

Public Interest Benefits: The Bureau applies several criteria in deciding whether a claimed benefit should be considered and weighed against potential harms, and applies a “sliding scale approach” to evaluating benefit claims.  The Applicants assert that the proposed transaction would enable AT&T to enhance existing services, better accommodate its overall growth, and facilitate the provision of additional products and services.  AT&T also claims that it would use the Lower 700 MHz spectrum acquired to improve the quality of service and meet the growing demand for LTE services.  After finding that the ability of other providers to offer competitive services in response to AT&T is not lessened in this CMA, and that the public interest benefits outweigh any potential harm, the FCC approved the transaction.

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