AT&T Continues Piecemeal Spectrum Plan

by Matt Klassen on January 23, 2013

In its continued piecemeal attempt to bolster its spectrum coffers, AT&T announced this week that it is purchasing the U.S. retail wireless operations of a small carrier called Atlantic Tele-Network (ATNI), acquiring the company’s network assets, some retail stores, over 500,000 subscribers, and, of course, all the company’s licensed spectrum for a cool $780 million in cash.

ATNI, which operates under the name AllTel in the U.S., primarily services rural areas of Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho, and isn’t considered to be even a minor player in the U.S. wireless market.

What’s interesting in all this, however, is how Ma Bell has changed its tack for spectrum acquisition following the collapse of its high profile acquisition of T-Mobile in 2011, choosing a more gradual approach to achieving the same results. What’s even more interesting is that it’s likely the FCC will let AT&T’s new strategy continue unabated, although again, the result will be almost exactly the same as if it had approved the T-Mobile deal in the first place.

AT&T has been on the hunt for spectrum for quite some time now, doing everything in its power to secure whatever vestiges of this important wireless resource it can get its hands on. In fact, since the FCC put the kibosh on AT&T’s proposed T-Mobile acquisition, Ma Bell has completed over 40 separate spectrum deals in an effort to bolster all of its network offerings.

As CNET’s Marguerite Reardon explains, in this deal with AllTel, “The spectrum licenses that AT&T is acquiring are in the 700MHz, 850MHz, and 1900MHz band. AT&T uses 700MHz for its 4G LTE network and it uses 850MHz and 1900MHz for its 2G and 3G networks.”

While the deal does still face regulatory approval by the FCC and the Department of Justice, if AT&T’s previous 40 deals are any indicator of the outcome, consider this a done deal. It’s this point, however, that really has me confused, as it seems AT&T is simply taking a circuitous route to achieve the same ends it sought in the T-Mobile deal, the very ends the FCC and DOJ thought would produce an anti-competitive market imbalance.

When the T-Mobile deal fell through the FCC explained that its decision was based on the fact that approval would, in essence, create a market duopoly, with a large majority of American wireless subscribers beholden to either Verizon or AT&T. Further, the FCC explained, allowing such a deal would give AT&T an unfair advantage in the spectrum race as no other company would have any access or ability to acquire such valuable wireless resources.

So while this rather innocuous deal may look like almost nothing on paper, it points to a larger systemic issue: spectrum gluts will always be spectrum gluts; they’ll just find a sneakier way to get what they want. In my mind it’s exactly this sort of scenario that demands federal spectrum regulation, whereby all the available bandwidth is managed and auctioned by the government. Sure call me socialist, but surprisingly enough it achieves the result the FCC is lamely attempting to achieve, that is keeping the wireless market in balance.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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