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Competitors Step up the Pressure on the T-Mobile/AT&T Merger

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In a filing today with the USA's telecoms regulator, three smaller mobile networks, two trade bodies and Sprint Nextel jointly requested that the FCC consolidate its review of AT&T's proposed takeover of T Mobile, as well as AT&T's proposed acquisition of additional spectrum from Qualcomm's Lower 700 MHz D and E Block licenses into a single proceeding.

In addition to Sprint, the three other networks are Cincinnati Bell Wireless, MetroPCS Communications and NTELOS, along with the Rural Cellular Association and the Rural Telecommunications Group.

As part of its competitive analysis of both of these proposed transactions, the requesting companies believe the Commission must examine the cumulative competitive effects created by AT&T's aggregation of spectrum in both proposed transactions and the impact such aggregation will have on the competitive provision of mobile broadband applications and services.

According to the filing, AT&T and Verizon currently control 92% of the broadband-capable 700 MHz spectrum in the top 54 US markets, and 100% of the broadband-capable 700 MHz spectrum in the top ten US markets.

"RCA members have long been concerned about AT&T spectrum aggregation," said Steven K. Berry, President & CEO of RCA. "This transaction should be viewed in the proper context and should be seen as part of a much larger market-dominant position that AT&T intends to secure with the AT&T/T-Mobile acquisition. It cannot be seen as a separate or individual acquisition."

As both the Qualcomm and T-Mobile transactions involve AT&T acquiring of spectrum in overlapping markets, the Commission would need to address the cumulative competitive effects of both acquisitions. In the proposed Qualcomm transaction, AT&T seeks to acquire a group of licenses that collectively have a national footprint as well as another group of licenses in five large markets. The proposed T-Mobile takeover would then add an additional 50 MHz on average in the same geographic areas covered by the proposed Qualcomm transaction, making a joint analysis the only way to truly assess the overlap and its effects on the wireless market.

"Both of AT&T's proposed takeovers here hit squarely on spectrum aggregation and competition in the wireless industry," said Carri Bennet, General Counsel to the Rural Telecommunications Group. "The Commission has the authority and the precedent to consolidate applications where interrelated competitive issues are raised. It is critical that the Commission gain a full understanding of the cumulative impact that both of these transactions will have on competition, consumer welfare and the public interest. This can only be done if the two transactions are reviewed together."

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Tags: fcc  qualcomm  at&t  t-mobile usa  sprint nextel  cincinnati bell wireless  metropcs  ntelos  rural cellular association  USA