The Federal Communications Commission on Monday announced that it would coordinate its review of AT&T’s $39 billion acquisition of T-Mobile USA with AT&T’s agreement to acquire spectrum from Qualcomm for nearly $2 billon.
The FCC had been informally reviewing the Qualcomm deal for the last 180 days, and AT&T had urged the agency to approve the transaction.
The development means that AT&T may have to wait until next year to receive word on its request to acquire airwaves from Qualcomm for $1.925 billion.
“As you are aware, the Commission has been evaluating for some time the relationship between this proposed transaction and AT&T’s proposed acquisition of T-Mobile USA (“T-Mobile")," wrote Rick Kaplan, Chief of the FCC’s Wireless Telecommunications Bureau, in a letter to AT&T and Qualcomm. “The Commission’s ongoing review has confirmed that the proposed transactions raise a number of related issues, including, but not limited to, questions regarding AT&T’s aggregation of spectrum throughout the nation, particularly in overlapping areas. As a result, we have concluded that the best way to determine whether either or both of the proposed transactions serve the public interest is to consider them in a coordinated manner at this time, without prejudice to independent treatment at a later date."
An AT&T spokesman said the FCC “has rejected calls to officially consolidate the two deals and has expressly preserved the ability for the Qualcomm application to be resolved in advance of the T-Mobile application."
“We remain confident that the FCC will approve the license transfers as consistent with the public interest," the AT&T spokesman added.
Although the FCC has not officially consolidated the two cases, “it is putting them on parallel tracks, which means it is unlikely to decide on the AT&T-Qualcomm deal until it decides on the AT&T/T-Mobile merger, or close to it," Stifel Nicolaus analyst Rebecca Arbogast wrote in a research note. “The latter decision could come in 4Q11, or it could extend into next year."
The Qualcomm spectrum covers about 300 million people nationwide and encompasses key markets, including Boston, Philadelphia, New York, Los Angeles and San Francisco.
Earlier this year, a T-Mobile USA executive told the FCC that AT&T’s planned acquisition of airwaves from Qualcomm highlights the need for U.S. regulators to free up additional spectrum.
“If the Commission decides to approve the transaction, it should therefore act swiftly to make additional spectrum available for wireless broadband services," wrote Thomas J. Sugrue, T-Mobile USA’s Senior Vice President of Government Affairs, in a filing dated March 11, 2011, nine days before AT&T announced plans to acquire T-Mobile USA for $39 billion in cash and stock.
