FCC Asks Follow-up Questions on AT&T/Leap Deal
The FCC Wireless Bureau asked a battery of questions of AT&T and Leap Wireless as it probes AT&T’s proposed buy of its small competitor. The queries came in letters to both companies. Many of the questions follow up on claims both made in their initial public interest statement in favor of the merger (http://bit.la/1d4kr5r). Meanwhile, new FCC Chairman Tom Wheeler met Tuesday with William Baer, chief of the Department of Justice’s Antitrust Division, agency officials said. Industry sources see the AT&T/Leap review as a key early test of FCC merger policy under Wheeler.
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The FCC letter to AT&T runs eight pages and covers 25 different areas of inquiry (http://bit.ly/1fztwU0). For example, the letter asks AT&T to explain claims that the buy of Leap will help make it a bigger player in the growing prepaid spaces. “The Applicants state that ‘AT&T generally has not aimed to match the offerings of prepaid/no-contract companies such as Cricket and others,’ although they also state that ‘AT&T has been marketing prepaid services under the AT&T GoPhone brand for many years’ and ‘recently launched standalone prepaid brand'” Aio Wireless.
A number of the questions concern AT&T’s spectrum position following the Leap buy. The public interest statement says Leap uses only 42 percent of the spectrum it owns in markets where it offers facilities-based service, the FCC said. “Describe the methodology used to determine that Leap is currently using 42 percent of its spectrum, and provide documents sufficient to show the application of that methodology,” the letter said. Other questions ask about AT&T’s plans to “refarm” Leap’s AWS-1 and PCS spectrum into AT&T’s LTE network.
<The letter to Leap asks similar questions. “Provide all documents discussing the Company’s spectrum needs, spectrum exhaust, capacity constraints, or excess spectral capacity, including attempts by Leap to purchase or lease additional spectrum, lease its spectrum to another person, or to pursue other partnership arrangements, including but not limited to, joint ventures or mergers,” the letter said (http://bit.ly/HLmrno). Both letters ask the companies to respond by Nov. 22.
Industry officials who have read the letters said they're typical of the kinds of letters sent by the commission in reaction to bigger transactions.