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FCC approves AT&T spectrum transfer to T-Mobile

Thu, 04/26/2012 - 2:08pm
Andrew Berg, Wireless Week

The FCC has approved the transfer of AT&T AWS spectrum licenses to T-Mobile, a crucial part of the agreement in the failed merger of the two companies.

According to T-Mobile, the transfer provides the carrier with AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets.

"We applaud the FCC for acting swiftly to approve the transfer of these spectrum licenses," said Neville Ray, chief technology officer for T-Mobile USA. "Securing this additional spectrum was a key catalyst for our plans to launch LTE in 2013 and is therefore good news for our customers."

The transfer is part of AT&T's agreement in its failed $39 billion bid to acquire T-Mobile. AT&T is also required to pay T-Mobile $3 billion in cash.

At an investor conference in January, AT&T's president and CEO of the carrier's business solutions unit, John Stankey, said it was unfortunate the deal to acquire T-Mobile failed, but he added that the carrier had "no second guesses" about having attempted the merger.

Stankey placed much of the blame for the failed deal on decisions made by regulatory agencies.

"We gave it our best shot, pushed as hard as we could, and it became apparent to us that there were two agencies that were opposed to the idea," Stankey said, adding that AT&T felt those agencies did things "different than how it's been done in the past" with respect to the T-Mobile deal.

T-Mobile has said it will invest $4 billion on network modernization to improve existing voice and data coverage while also deploying LTE in 2013. The carrier said that even after the transfer of spectrum from AT&T, T-Mobile continues to need more AWS spectrum.

The approval comes as Verizon Wireless waits to hear on approval of its $3.9 billion bid to purchase AWS licenses from SpectrumCo (an entity jointly owned by Comcast, Time Warner Cable and Bright House Networks), Cox and Leap Wireless. Just last week, Verizon said it would sell is 700 MHz A- and B-block spectrum licenses, contingent on approval of its bid for the cable spectrum.

Both T-Mobile and MetroPCS have asked the government to block the transaction because it would result in what they characterize as "excessive concentration" of spectrum in Verizon's control, a claim Verizon has refuted, claiming that without the additional AWS spectrum, it could run into shortages as early as 2013.

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