FCC Approves AT&T's Spectrum Deal with Qualcomm (NewsFactor)

Seeking to expand mobile broadband deployments throughout the United States, the FCC has given AT&T the green light to begin using the 700MHz spectrum licenses the carrier purchased from Qualcomm for $1.925 billion in December 2010.

AT&T and Qualcomm expect to close their transaction shortly, and with AT&T bent on deploying this spectrum as soon as compatible handsets and network equipment are developed. AT&T's new spectrum blocks collectively cover more than 300 million people nationwide, including 70 million U.S. residents living in five major metropolitan areas: New York, Boston, Philadelphia, Los Angeles and San Francisco.

To promote competition, consumer advocacy groups had asked the Federal Communications Commission to include a provision that would require any AT&T device operating on paired spectrum in the lower 700 MHz band to also operate on all paired spectrum in that part of the band. FCC Chairman Julius Genachowski has agreed to expeditiously conduct a separate interoperability proceeding next year.

"As spectrum is the lifeblood of the U.S. wireless industry, we are pleased that the FCC did not reduce the spectrum screen," said AT&T Senior Vice President Bob Quinn. "However, we continue to believe any changes to the process by which it is allocated should be subject to open and transparent public discussion."

Dissenting Opinion

In its ruling on AT&T's spectrum acquisition, the FCC said competitive concerns can be mitigated by ensuring that AT&T's new 700MHz spectrum use does not impede the operations of competitors using neighboring spectrum. AT&T cannot use its new spectrum in ways that deprive other providers from attaining any of the potential benefits accruing from the FCC's roaming rules.

Still, Commissioner Michael Copps expressed concern that the deal's approval means that AT&T and Verizon Wireless will collectively control 73 percent of the spectrum below 1 gigahertz available for broadband wireless services. "By any reasonable spectrum screen or other spectrum holdings analysis, this level of concentration should give us pause," Copps said.

As a result, AT&T will have even more device buying power as well as the potential ability to thwart competition by hampering interoperability, Copps warned.

"This license transfer takes a pre-existing competitive problem --- the lack of interoperability in the Lower 700MHz [spectrum blocks] -- and aggravates it by giving one of the two dominant carriers an enhanced ability to ensure that interoperability doesn't happen without a regulatory requirement," Copps said.

Short-Term Solutions

In the wake of the dissolution of AT&T's proposed merger with T-Mobile this week, AT&T CEO Randall Stephenson said that regulatory approval of its spectrum deal with Qualcomm would be the best short-term solution. AT&T intends to use this spectrum for supplemental downlinks designed to deliver substantial capacity gains.

In the long run, however, Stephenson said U.S. policy-makers should enact legislation to meet the nation's longer-term spectrum needs, a point with which the FCC concurs.

"We agree with AT&T that Congress should pass incentive auction legislation that will unleash new spectrum for mobile broadband," Genachowski said.

Genachowski also noted Thursday that currently unused spectrum between TV stations -- known as "white spaces" -- can potentially provide the nation with yet another wireless broadband platform. The FCC's approval of the first TV white spaces database and device is an important step in making this new wireless technology a viable broadband option for American consumers, Genachowski said.

"Unleashing white spaces spectrum has the potential to exceed even the many billions of dollars in economic benefit from Wi-Fi -- the last significant release of unlicensed spectrum -- and drive private investment and job creation," Genachowski added.

Source: http://us.rd.yahoo.com/dailynews/rss/internet/*http%3A//news.yahoo.com/s/nf/20111223/tc_nf/81510

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