The FCC has decided to combine its AT&T merger review with AT&T’s planned purchase of Qualcomm’s 700 MHz spectrum, reports Politico. In a statement by the FCC (pdf), the agency concluded that the impact of the two deals is related and should be considered at the same time.
It was a victory for opponents like Free Press who objected (pdf) to the domination of 700 MHz frequencies by AT&T and Verizon. AT&T maintains that the two deals should be looked at separately, and noted that the FCC has kept the option open to approve the Qualcomm deal first.
Qualcomm currently owns TV channels 55 and 56 (blocks D and E) on the 700 MHz band. The FCC will now suspend its informal 180-day time frame for reviewing AT&T’s $1.9 billion proposal to acquire Qualcomm’s 700Mhz spectrum. Qualcomm had intended to use the two 6 MHz-wide channels for high power mobile-TV, but shuttered the service due to low demand.
Qualcomm purchased additional licenses in the E block in the 2008, 700 MHz auction. Those licenses covered Boston, Los Angeles, New York City, Philadelphia and San Francisco. It doubled Qualcomm’s 700 MHz spectrum holdings in coastal areas, with a footprint of more than 68 million people in 28 individual markets (21 of its top 100 markets) at a cost of $554.6 million.
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. AT&T would then have 6 MHz and 12 MHz of spectrum in some areas it could use for download services, an advantage over Verizon in some areas.
A ganged AWS/700 MHz spectrum approach has also been proposed by AT&T (using T-Mobile’s spectrum). It could be problematic since AWS (at 1.7/2.1GHz) has about one third the range as 700 Mhz.
The Clear/Sprint WiMAX network, on the other hand, uses TD-WiMAX and TD-LTE. Qualcomm’s spectrum might directly support 2-way traffic on one or two 6Mhz channels using Time Division multiplexing. Denying AT&T the use of Qualcomm’s spectrum might be a huge victory for Sprint and somewhat less so for Verizon.
In 2008, AT&T bid $6.6 billion to acquire 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 (6MHz x 2) in the Lower 700 MHz band, giving them double the bandwidth – 24 MHz total.
In a separate private deal, AT&T acquired 700 MHz spectrum from Hiwire in a $2.5 billion deal which gave them (6MHz x 2) in the “C” block. That would be combined with 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.
Related DailyWireless articles include; Spectrum Drama: Made for TV , LTE Spectrum: It’s War, Phoney Spectrum Scarcity,FCC: Show Us Your Spectrum Scarcity, AT&T , AT&T Gets Heat on MediaFLO Spectrum , Qualcomm Sells MediaFLO Spectrum for $1.93B, Combining AWS and 700 MHz: Why?, Sprint to Announce LTE Plans July 28?, WiMAX to TD-LTE: Everybody’s Doin’ It, AT&T Buys 700MHz from Aloha, FCC: Show Us Your Spectrum Scarcity, AT&T, AT&T Gets Heat on MediaFLO Spectrum, Qualcomm Sells MediaFLO Spectrum for $1.93B, Google: We Got Trouble. . . In 700 Mhz, FCC Finalizes Rules on 700MHz: Limited Open Access, No Wholesale Requirement, Qualcomm Buys Flarion, Joint Commecial/Muni Proposed for 700Mhz, Hiwire Moves on Mobile TV, Mobile TV War at NAB, Small Ops Squeezed Out of 700MHz?, HiWire: 24 Mobile TV Channels, Rural Broadband Gets A Plan, Verizon Makes its Move for Universal Service Fund, The Smartest Guy in the Room, 700 MHz On The Line?, 700 Mhz Worth $28B, 4G Auctions, RUS Funding for 700 MHz, The 700 Mhz Club, Channel 54: Where are You?
