Groups: FCC should deny AT&T spectrum purchase

The U.S. Federal Communications Commission should deny AT&T's plan to buy US$1.9 billion worth of wireless spectrum from Qualcomm because of the telecom carrier's proposed acquisition of T-Mobile USA, several consumer groups said Wednesday.

The FCC should combine its reviews of the two deals, Free Press, Public Knowledge, Consumers Union and other groups wrote in a letter to the agency.

"The proposed merger between AT&T and T-Mobile would reshape the entire American wireless industry in a single stroke," the groups wrote. "With possible approval of this transaction lingering on the horizon, the Public Interest Organizations can no longer imagine conditions that could outweigh the risk of competitive harm posed by the further growth of AT&T through acquisition of additional beachfront spectrum licenses from Qualcomm."

AT&T announced in March its plans to buy T-Mobile USA for $39 billion. In December, the carrier said it intends to buy Qualcomm spectrum licenses in the lower 700MHz band for $1.9 billion.

Mobile broadband experts see the 700MHz band as prime spectrum for offering mobile broadband services. Signals in the 700MHz band travel farther and penetrate buildings and other physical objects better than in higher spectrum bands.

AT&T did not immediately respond to the letter. The company defended the T-Mobile acquisition in a recent blog post, saying the deal will be good for customers.

The acquisition "will address capacity constraints that both of our companies face, which will enable the combined company to provide improved services in the many urban, suburban, and rural markets where the enormous surge in broadband usage is fast consuming available capacity," wrote Joan Marsh , AT&T's vice president of federal regulatory affairs. "What this means is fewer dropped calls, fewer failed call attempts, and better data throughput."

The consumer groups disagreed. The two deals "would further empower an already dominant wireless carrier to leverage its control over devices, backhaul, and consumers in ways that stifle competition," the groups wrote.

AT&T must prove that the proposed transfer of spectrum licenses serves the public interest, the groups said. "The harm to consumers and to competition exceeds any potential benefits of the transfer," the letter added. "Licenses for beachfront spectrum below 1 GHz are disproportionately held by two companies, AT&T and Verizon Wireless. The proposed Qualcomm license transfer would only further this competitive disparity."

Other groups signing the letter were the New America Foundation and the Media Access Project.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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