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Sprint goes after spectrum from U.S. Cellular

Sprint recently announced plans to buy spectrum and customers from U.S. Cellular. For $480 million and the assumption of certain liabilities, the nation’s number three wireless carrier will get 585,000 customers in the states of Illinois, Indiana, Michigan, Missouri, and Ohio.

Sprint will obtain 20 MHz of spectrum in the 1900 MHz band in Chicago, South Bend, Indiana, and Champaign, Illinois. An additional 10 MHz of spectrum will be acquired in St. Louis, Missouri.

The mid 2013 closing on this deal all depends on the U.S. Department of Justice and the Federal Communications Commission. Hopefully these august agencies will recognize that this autonomous transaction spawned in the free market is the fastest and most efficient way to get spectrum into the hands of companies and customers willing to pay the premium for it.

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Public Knowledge Believes Verizon and SpectrumCo part of a Cartel. Really?

Public Knowledge has been on a little rampage, referring to Verizon’s petition to obtain AWS licenses from SpectrumCo, LLC as synonymous to a cartel. Specifically, Public Knowledge is saying that the aggregation of spectrum on the part of Verizon, combined with joint marketing, reseller, and joint operating entity agreements entered into between Verizon and SpectrumCo would effectively result in a cartel.

Should the transfer go through, Verizon and SpectrumCo, a joint venture between Comcast, Time Warner, and Bright House, will cross-sell each others’ services.

In its ex-parte letter posted on the Federal Communications Commission’s website on 18 June 2012, Public Knowledge made its cartel claim, but doesn’t seem to provide evidence of current or projected cartel behavior. For example, a cartel is defined as a group of firms with an explicit, formal agreement to fix prices and output shares in a particular market. Public Knowledge offers no evidence supporting the particular market Verizon and Spectrum intend to carve up, the level at which prices are to eb fixed, or how shares of that undefined market are to be divided up.

Without a showing that Verizon and SpectrumCo have entered a contract, combination, or conspiracy to restrain trade, a cartel argument is a non-starter.

Besides, why even bring this allegation to the FCC? This claim should be in front of the U.S. Department of Justice.

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AT&T, T-Mobile haven’t given up

Posted December 13th, 2011 in antitrust, AT&T, T-Mobile USA and tagged , , by Alton Drew

Yesterday AT&T issued the following statement regarding the status of its merger with T-Mobile USA:

“AT&T and Deutsche Telekom advised Judge Huvelle this morning that they wish to stay any further Court proceedings until January 18, 2012, to allow the two companies time to evaluate all options. The U.S. Department of Justice joined in the filing.

“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees. We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”

Doesn’t sound like these two companies are giving up, but may be re-configuring how they go about putting the synergies of a merger into a package that the U.S. Department of Justice and the court can accept.

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MetroPCS wants a piece of the AT&T, T-Mobile action

Bloomberg News reported last Friday that MetroPCS may be interested in purchasing subscribers and spectrum from AT&T and T-Mobile. Analysts are estimating that such a transaction may cost MetroPCS between $2 billion and $4 billion, according to Bloomberg.

To satisfy the U.S. Department of Justice, nothing short of an exact replica of T-Mobile would probably suffice since the Justice Department is concerned about the impact a total absorption of T-Mobile would have on competition in the wireless market.

On the other hand, such an arrangement may get the Justice Department, AT&T, and T-Mobile closer to a settlement.

Given that MetroPCS is a small, regional player, there should be no antitrust hurdles for the company to leap, but it, along with AT&T and T-Mobile, would have to petition the Federal Communications Commission for permission to make any necessary license transfers.

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States start lining up at the AT&T trough

The Wall Street Journal today reported that a number of states have joined the U.S. Department of Justice’s lawsuit blocking the purchase of T-Mobile USA by AT&T.

Interesting. Sounds like all the states are showing is that the relevant geographical market for this transaction is the local market. If the relevant market is nationwide, the states should save their money and allow the regulator of interstate commerce, the federal government, litigate this one.

At first blush, I don’t think that allegedly cash-strapped states are in this to ensure competition. They are in this to get their cut of any promises AT&T has to offer in order to get the deal done.