Federal regulators approved AT&T Inc.'s $1.9 billion acquisition of airwaves from Qualcomm Inc. on Thursday, giving AT&T a much-needed boost after its deal to acquire T-Mobile USA fell apart.
The Federal Communications Commission signed off on the deal Thursday on a 3-1 vote, with minor conditions, FCC officials said. The approval means that AT&T and Qualcomm could close the deal by the end of the year.
An AT&T spokesman had no comment on the FCC's decision.
The licenses AT&T is purchasing from Qualcomm would be used to supplement its next-generation LTE network nationally and give it more bandwidth for customer downloads.
FCC Chairman Julius Genachowski proposed approving the Qualcomm deal in November, while simultaneously announcing serious concerns about the T-Mobile deal and pushing it toward a longer review. The FCC concerns and a Justice Department lawsuit forced AT&T and T-Mobile USA parent company Deutsche Telekom AG to pull the plug on the deal this week.
AT&T's need for the Qualcomm spectrum has increased in recent weeks, after its T-Mobile deal fell apart and rival Verizon Wireless announced a $3.6 billion deal to acquire unused airwaves from Spectrum Co., a coalition of cable companies that includes Comcast Corp. On Dec. 17, Verizon also announced plans to buy airwaves from Cox Communications for $315 million.
The acquisitions would give Verizon significantly more capacity on its national LTE voice and data network and help the company avoid the sort of network congestion issues that have plagued AT&T in some markets.
AT&T is acquiring spectrum licenses that Qualcomm used for its now-defunct over-the-air pay-television service, FLO TV. The frequencies cover more than 300 million people across the U.S., including major metropolitan areas such as New York, Los Angeles and San Francisco. Since the airwaves can only be used for downloads—not uploads—AT&T plans to use them to boost the download capacity of its fourth-generation LTE network.
Federal regulators imposed few conditions on the deal, mostly involving interference protections and requirements to offer data roaming to competitors. Despite fierce lobbying from smaller wireless companies, the agency didn't impose a condition requiring that handsets using AT&T's frequencies be interoperable with other nearby airwaves. Smaller wireless companies have complained that AT&T and Verizon Wireless are designing their LTE networks so that smaller companies won't be able to use the same handsets or provide data roaming. Smaller companies wanted interoperability requirements on AT&T's 700 MHz LTE airwaves so regional carriers could get data roaming and consumers could use any LTE phone they want on 4G networks.
AT&T argued the FCC shouldn't require interoperability with nearby airwaves and said the restriction would delay the company's efforts to build out its LTE network. The agency sided with AT&T on the argument, but FCC officials said that they will conduct an industry-wide examination of whether new interoperability rules are needed on 4G LTE airwaves early next year.
