AT&T/Leap Good for Customers of Both Companies, AT&T Tells FCC
AT&T defended its proposed buy of Leap Wireless in a filing at the FCC, telling the commission that even though some petitions to deny have been filed at the agency, the public interest benefits of the merger are undeniable. AT&T filed its opposition to opponents of the deal Wednesday, after being delayed by the federal government shutdown (CD Oct 24 p3).
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"AT&T will put Leap’s spectrum to more efficient use in AT&T’s 4G LTE network, and the combination of complementary assets will result in significant cost savings and other synergies,” AT&T said. “Customers of both companies will enjoy an improved network experience, and Leap’s customers will gain access to a more robust national network and a broader array of service and handset options."
In buying Leap, AT&T is not taking a major competitor out of the market, AT&T said. “Leap has a limited facilities-based footprint, serves less than two percent of wireless customers today, has experienced a significant drop in subscribers since March 31, 2012, and simply does not constrain AT&T and the other national carriers,” the carrier said. AT&T would gain spectrum to put it above the FCC’s spectrum screen in only a handful of cellular market areas, the carrier said. “In the very few CMAs where it does, ample spectrum remains available to (and, indeed, is held by) AT&T’s competitors."
As has been common practice in merger reviews, several opponents asked the FCC to impose rules that have nothing to do with the transaction, AT&T said. “For example, several Opponents ask the Commission to change its spectrum aggregation rules radically, from a screen to one or more variants of a hard cap (and to freeze consideration of this proceeding pending completion of the Mobile Spectrum Holdings rulemaking),” the carrier said. “The Commission has repeatedly rejected such proposals. Still other Opponents improperly seek to use this proceeding to improve their contractual positions or to gain leverage in unrelated disputes. None of these claims establishes any relevant, merger-specific harm to competition or consumers."
AT&T Chief Financial Officer John Stephens said on an investor call Wednesday the company hopes for quick approval of the transaction. “We continue to look for opportunities to improve our business,” he said. “We are working with regulators on our proposed acquisition of Leap Wireless, and we continue to expect that deal will close in the first quarter of 2014.”