Federal regulators have asked AT&T provide proof on an airwave shortage, reports Bloomberg. The FCC in a request posted on its website today asked AT&T to provide “all plans, analyses and reports discussing the relative network spectrum capacity constraints of the company.”
AT&T in its April 21 filing with the FCC seeking approval of the merger said it “faces network spectrum and capacity constraints more severe than those of any other wireless provider.”
The FCC and Justice Department are vetting the deal, in a review AT&T executives have said will take about a year. The merger would combine the second- and fourth-largest carriers to create a new market leader, ahead of No. 1 Verizon Wireless.
Questions posed by the FCC included whether AT&T plans to continue carrying the T-Mobile brand, and whether the combined company would offer T-Mobile’s price plans.
AT&T in its April 21 statement said the merger will create “thousands of jobs.” The FCC asked today for “all plans, analyses, and reports discussing the creation or loss of jobs.”
According to AT&T, “The merger will not literally create new spectrum but it will allow efficiencies in the use of spectrum that are the functional equivalent.
Now AT&T is talking up a plan to glue on T-Mobile’s AWS spectrum to their 700 MHz LTE network. AT&T said it plans to launch LTE this year, and will cover around 70 million people with LTE by year-end on their 700 MHz frequencies.
But a ganged AWS/700 MHz spectrum approach could be problematic. LTE on AWS (at 1.7/2.1GHz) has about one third the range as LTE on 700 Mhz.
In 2008, AT&T bid $6.6 billion to acquire an additional 227 B Block licenses during the FCC’s 700 MHz auction. In a number of places AT&T bought both the B and C block licenses in the Lower 700 MHz band, giving them double the bandwidth – 24 MHz total.
Later, AT&T acquired 700 MHz spectrum from Hiwire in a $2.5 billion deal and Qualcomm’s unpaired MediaFLO licences for $1.93 billion for 12MHz of the lower 700MHz D and E block.
AT&T also bought Paul Allen’s 700 MHZ Vulcan Spectrum licenses in Washington and Oregon that he acquired in 2003, for an undisclosed price. Vulcan Spectrum’s A- block licenses, which also cover the Seattle and Portland areas, weren’t included in the proposed sale to AT&T.
AT&T’s total investment in 700 MHz spectrum is therefore $6.6B (from the FCC’s 2008 auction) + $2.5B (Aloha Partners purchase) + $1.9B (Qualcomm purchase), or a total of $11 billion. Not including Paul Allen’s spectrum. AT&T (under Cingular brand), also bought $1.3 billion in AWS spectrum that they have never activated.
Bottom line: AT&T is sitting on more than $12 Billion in spectrum. At the same time, AT&T says they need to merge with T-Mobile to acquire spectrum and deliver LTE.
It doesn’t add up.
Related stories on DailyWireless include; Phoney Spectrum Scarcity, AT&T Gets Heat on MediaFLO Spectrum, U.S. Wireless Growth, AT&T Declares Spontaneous “4G” Transformation, AT&T Moves to Hotzones and Picocells, Consumer Groups Fight AT&T Merger, Traffic Forecast: Congested, Combining AWS and 700 MHz: Why?, T-Mobile’s Secret Sauce: 2x10MHz,
