FCC OKs AT&T’s Acquisition of Qualcomm Spectrum

The Federal Communications Commission has concluded its review of AT&T’s acquisition of all 11 of Qualcomm’s D and E Block licenses in the Lower 700 MHz band for $1.925 billion. AT&T is acquiring six megahertz of unpaired 700 MHz spectrum nationwide and an additional six megahertz of unpaired 700 MHz spectrum in five major metropolitan markets (New York, Boston, Philadelphia, Los Angeles, and San Francisco) with population totaling 70 million. The Applicants asserted that this transaction is in the public interest because it will enable AT&T to repurpose Qualcomm’s underutilized Lower 700 MHz D and E Block spectrum for the deployment of mobile broadband services by using supplemental downlink technology to couple it with paired spectrum that AT&T already holds.

The FCC’s analysis suggests that AT&T’s proposed acquisition of Qualcomm’s Lower 700 MHz D and E Block licenses has the potential to cause some competitive and other public interest harms. The FCC concludes, however, that these potential harms from AT&T’s acquisition of this unpaired spectrum can be mitigated with certain targeted conditions to prevent or limit any potential anticompetitive behavior. In particular, we conclude that our competitive concerns can be mitigated by ensuring that AT&T’s use of the newly acquired spectrum does not impede actual and potential competitors’ operation on neighboring spectrum in the provision of broadband services, and that AT&T cannot use the Qualcomm spectrum in a way that deprives other providers of the benefits of the Commission’s roaming rules.

So, in light of the FCC’s targeted conditions to address the potential for competitive harm and the likely public interest benefits flowing from the use of the spectrum at issue, the FCC approved the proposed transaction, subject to the conditions.

FCC Commissioner Michael Copps voted against the Order saying, “I could be persuaded, with the right set of pro-consumer conditions, to concur in the transaction. While much of the competitive analysis in today’s order is strong, the conditions the Commission does attach strike me as falling short of advancing the public interest demand.”

Commissioner Clyburn said, “I would have preferred that the Order found that the lack of interoperability is a merger specific issue that should be remedied by an interoperability condition similar to the one that the A Block licensees and other parties requested. But today, the policy priority for me is the most efficient path possible for interoperability in the lower 700 MHz band. In order to accomplish this, compromise among all stakeholders will be necessary.”