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AT&T Acquisition of ATN Approved with Conditions

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Released: September 20, 2013

REDACTED

Federal Communications Commission

DA 13-1940

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)
Applications of AT&T Inc. and Atlantic
)
WT Docket No. 13-54
Tele-Network, Inc.
)
)
For Consent To Transfer Control of and Assign
Licenses and Authorizations
)
)

MEMORANDUM OPINION AND ORDER

Adopted: September 20, 2013

Released: September 20, 2013

By the Chief, Wireless Telecommunications Bureau, and Chief, International Bureau

TABLE OF CONTENTS

Heading
Paragraph #
I. INTRODUCTION ...................................................................................................................................... 1
II. BACKGROUND ........................................................................................................................................ 3

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DA 13-1940

A. Description of Applicants................................................................................................................. 3
1. AT&T.......................................................................................................................................... 3
2. ATN ............................................................................................................................................ 4
B. Description of Transaction............................................................................................................... 5
C. Transaction Review Process............................................................................................................. 7
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK............................................................. 12
IV. QUALIFICATIONS OF APPLICANTS ........................................................................................................ 15
V. POTENTIAL PUBLIC INTEREST HARMS.................................................................................................. 18
A. Competitive Overview and Market Definitions ............................................................................. 19
1. Competitive Overview............................................................................................................. 19
2. Market Definitions................................................................................................................... 21
B. Competitive Effects of Transaction................................................................................................ 30
1. Initial Screen............................................................................................................................ 30
2. Competitive Analysis ............................................................................................................... 34
C. Roaming ......................................................................................................................................... 57
D. Other Issues ................................................................................................................................... 61
VI. POTENTIAL PUBLIC INTEREST BENEFITS............................................................................................... 64
A. Analytical Framework .................................................................................................................... 65
B. Potential Benefits........................................................................................................................... 67
1. Deployment of Advanced Broadband Technologies............................................................... 68
2. Expanded and Improved Services and Features ..................................................................... 71
3. Cost Savings............................................................................................................................. 73
4. Benefits to AT&T's Customers................................................................................................. 75
5. Customer Transition Plans....................................................................................................... 76
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C. Discussion ...................................................................................................................................... 81
D. Remedies........................................................................................................................................ 90
1. Network Deployment Commitments...................................................................................... 92
2. Roaming Commitments........................................................................................................... 95
3. Customer Transition Commitments ........................................................................................ 97
4. Progress Reports ..................................................................................................................... 99
VII.BALANCING THE PUBLIC INTEREST BENEFITS AND THE HARMS ......................................................... 100
VIII.CONCLUSION ...................................................................................................................................... 101
IX. ORDERING CLAUSES ........................................................................................................................... 102
APPENDIX A Commenters in WT Docket No. 13-54
APPENDIX B AT&T Letter of Commitment

I.

INTRODUCTION

1.
In this Memorandum Opinion and Order, we approve, subject to conditions, the
applications of AT&T and ATN (together, the "Applicants") for Commission consent to the transfer of
control of, and assignment of, a number of cellular, Personal Communications Services ("PCS"), Lower
700 MHz Band B and C Block, and common carrier fixed point-to-point microwave licenses; spectrum
leasing authorizations; and an international section 214 authorization from ATN's wholly-owned
subsidiary, Allied, to AT&T.1

1 Applications of Allied Wireless Communications Corporation, AWCC Acquisition Company, LLC, and AT&T
Inc. for Consent To Transfer Control of and Assign Licenses and Spectrum Leases, and for New Authorizations To
Lease Spectrum, ULS File Nos. 0005632405, 0005631527, 0005631556, 0005631562, 0005631563, 0005631565,
0005631586, 0005632708, 0005632710, 0005632713, and 0005632716 (filed Feb. 5, 2013; amended Apr. 3, 2013)
(File No. 0005632405 is designated as the lead application ("Lead Application")); the application for consent to
assign an international section 214 authorization from Allied Wireless Communications Corporation to AWCC
Acquisition Company LLC has been assigned File No. ITC-ASG-20130206-00051 (collectively, the
"Applications").
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2.
As a result of the proposed transaction, approximately 620,000 customers, as well as
network equipment and other assets, will be transferred from Allied to AT&T. Based on our analysis, we
find that the proposed transaction will likely cause some competitive and other public interest harms in
several local markets. We find, however, that the proposed transaction is likely to result in public
interest benefits that, when combined with voluntary commitments from AT&T, will mitigate our
competitive concerns. AT&T's voluntary commitments in the areas of network deployment, roaming,
and customer transition (as well as its recently supplemented filings regarding customer transition)
allow us to conclude that the proposed transaction overall is in the public interest.

II.

BACKGROUND

A.

Description of Applicants

1.

AT&T

3.
AT&T Inc. ("AT&T"), headquartered in Dallas, Texas, is a communications holding
company that ranks among the leading providers of telecommunications services in the United States.2
As of December 31, 2012, AT&T reported more than $127 billion in revenues, of which its wireless
services accounted for approximately 52 percent, and had approximately 107 million wireless
subscribers.3 AT&T's nationwide wireless network currently covers approximately 308 million people, or
99.8 percent of the population of the mainland United States.4 The company is transitioning to a
wireless network that uses the fourth generation Long Term Evolution ("LTE") mobile technology, and
the company expects to largely complete this transition by the end of 2014.5
2.

ATN

4.
Atlantic Tele-Network, Inc. ("ATN"), headquartered in Beverly, Massachusetts,6 is a
provider of wireless, wireline, mobile broadband, and advanced TV services in the United States,
Bermuda, and the Caribbean.7 For the fiscal year 2012, ATN reported approximately $741 million in

2 See AT&T Inc., SEC Form 10-K, at 1 (filed Feb. 22, 2013) ("AT&T 10-K), available at
http://www.sec.gov/Archives/edgar/data/732717/000073271713000017/ye12_10k.htm.
3 See AT&T Inc. 2012 Annual Report, Ex. 13 (filed Feb. 22, 2013), at 1, 5, available at
http://www.sec.gov/Archives/edgar/data/732717/000073271713000017/ex13.htm.
4 Of the 308 million people covered by its wireless network, AT&T covers 301.3 million people with 3G, 294.6
million people with High Speed Packet Access+ ("HSPA+"), and 221.6 million people with LTE. Mosaik Solutions
Data ("Mosaik"), July 2013.
5 See AT&T 10-K at 2.
6 Lead Application, Exhibit 1, Description of Transaction, Public Interest Showing and Related Demonstrations at 2
("Public Interest Statement").
7 See Atlantic Tele-Network, Inc., SEC Form 10-K at 2 (for the fiscal year ended Dec. 31, 2012) ("ATN 10-K"),
available at http://www.sec.gov/Archives/edgar/data/879585/000104746913002987/a2213629z10-k.htm.
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revenues, of which its U.S. wireless services accounted for approximately 73 percent.8 In 2010, ATN
acquired control of the retail operations, wireless licenses, and related authorizations in 26 of the 105
markets that the Commission and the U.S. Department of Justice ("DOJ") had required be divested as a
condition of approving Verizon Wireless's acquisition of ALLTEL Corporation.9 Through its subsidiary,
Allied Wireless Communications Corporation ("Allied"), ATN continues to provide retail wireless voice
and data services under the ALLTEL brand in these primarily rural areas to approximately 620,000
subscribers.10 Allied's network currently covers approximately 4.7 million people, or approximately 1.5
percent of the population of the mainland United States. Allied currently offers 2G and 3G services in
most of its service territories,11 and has conducted technical field trials to evaluate upgrading its network
to LTE.12

B.

Description of Transaction

5.
On February 5, 2013, AT&T and ATN filed the Applications pursuant to sections 214 and
310(d) of the Communications Act of 1934, as amended (the "Communications Act"),13 seeking
Commission consent to the transfer of control of, and assignment of, a number of cellular, PCS, Lower
700 MHz Band B and C Block, and common carrier fixed point-to-point microwave licenses, spectrum
leasing authorizations, and an international section 214 authorization. Allied will contribute the
licenses, leases, authorizations, ownership interests, and other assets (including networks and
subscribers) to its wholly-owned subsidiary, AWCC Acquisition Company, LLC ("AWCC"), and Allied
subsequently will transfer its 100 percent interest in AWCC to a wholly-owned, indirect subsidiary of
AT&T.14 AT&T is purchasing all of the assets used by Allied in its "ALLTEL" operations.

8 See ATN 10-K at 45.
9 See Applications of Atlantic Tele-Network, Inc. and Cellco Partnership d/b/a Verizon Wireless, WT Docket No.
09-119, Memorandum Opinion and Order, 25 FCC Rcd 3763, 3772 18 (2010) ("ATN-Verizon Wireless Order").
See also United States, et. al v. Verizon Communications, Inc., and ALLTEL Corporation, 607 F.Supp.2d 1, 5-10
(D.D.C. 2009) ("U.S. v. Verizon Comm.").
10 See ATN 10-K at 3; Public Interest Statement at 2-3. The subscriber count includes 35,000 customers attributable
to the unconsolidated partnership Georgia RSA #8 Partnership, in which ATN has an approximate 33% interest. See
id.
at 3 n.8; see also n.117 infra. ATN also has wholesale and data roaming wireless operations that are not involved
in this transaction. Public Interest Statement at 3.
11 Of the 4.7 million people covered by its wireless network, ATN covers 4.5 million people with 3G. Mosaik, July
2013.
12 See ATN 10-K at 4.
13 47 U.S.C. 214, 310(d).
14 In addition to assigning the licenses it holds to AWCC (see ULS File No. 0005632405), Allied would transfer to
AT&T ownership of interests in five partnerships that are spectrum licensees (see ULS File Nos. 0005631527,
0005631556, 0005631562, 0005631563, and 0005631565), as well as control of a partnership that leases spectrum
from a third party (see ULS File No. 0005631586). Lastly, partnerships in which Allied holds an interest have filed
applications for new authorizations to lease spectrum to AWCC (in lieu of applications for Allied to assign existing
(continued....)
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6.
In these transactions, AT&T is proposing to acquire 10 to 57 megahertz of spectrum in
162 counties in 30 Cellular Market Areas ("CMAs") across parts of Alabama, Georgia, Idaho, Illinois,
North Carolina, Ohio, South Carolina, and Washington, as well as Allied's retail operations located in
mostly rural parts of Georgia, Idaho, Illinois, North Carolina, Ohio, and South Carolina.15 ATN asserts that
it has struggled to adjust to demand in its markets for mobile broadband services and to make the
necessitated network upgrades,16 while AT&T claims it will transition Allied's customers to a 4G
network.17 AT&T uses "4G" to encompass both its HSPA+ and its LTE service offerings, and in this order,
we will use this term to have this same meaning.

C.

Transaction Review Process

7.
On February 5, 2013, the Applicants filed the Applications. On March 5, 2013, the
Commission released a public notice announcing acceptance of the Applications for filing and
establishing a pleading cycle, with petitions to deny due April 4, 2013, oppositions due April 15, 2013,
and replies due April 22, 2013.18 In response to the Comment Public Notice, the Commission received
two petitions to deny and one comment, a Joint Opposition from the Applicants, and two replies.19 We
address issues raised in these filings below.
8.
On June 5, 2013, pursuant to section 308(b) of the Communications Act, the Wireless
Telecommunications Bureau ("Wireless Bureau") requested additional information and documents from
AT&T and ATN.20 The Wireless Bureau also released protective orders to ensure that any confidential or
proprietary documents submitted to the Commission would be adequately protected from public
(Continued from previous page)
spectrum leasing authorizations to AWCC) (see ULS File Nos. 0005632708, 0005632710, 0005632713, and
0005632716). All of these spectrum interests have been attributed to AT&T for purposes of our competitive
analysis.
15 See Public Interest Statement at 1.
16 See id. at 7.
17 See id. at 7.
18 AT&T Inc. and Atlantic Tele-Network, Inc. Seek FCC Consent to the Transfer of Control and Assignment of
Licenses, Spectrum Leasing Authorizations, and an International Section 214 Authorization, Public Notice 28 FCC
Rcd 2165 (2013) ("Comment Public Notice").
19 See Appendix A infra. Maneesh Pangasa filed a number of comments after the comment period closed.
20 See Letter from Ruth Milkman, Chief, Wireless Telecommunications Bureau, to Michael P. Goggin, AT&T Inc.,
WT Docket No. 13-54 (June 5, 2013); Letter from Ruth Milkman, Chief, Wireless Telecommunications Bureau, to
Douglas J. Minster, Allied Wireless Communications Corporation, WT Docket No. 13-54 (June 5, 2013). ). On
August 27, 2013, the Wireless Bureau suspended the informal 180-day clock for reviewing transactions because
AT&T had not provided detailed responses on its plans to transition Allied's significant prepaid customer base. See
Letter from Ruth Milkman, Chief, Wireless Telecommunications Bureau, to Michael Goggin, AT&T, Inc., and
Douglas J. Minster, Allied Wireless Communications Corporation, WT Docket No. 13-55 (Aug. 27, 2013). AT&T
provided additional information on those and other issues on August 28, 2013 and September 18, 2013. See AT&T
Third Supplemental Response, August 28, 2013; AT&T Fifth Supplemental Response, September 18, 2013.
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disclosure, and to announce the process by which interested parties could gain access to confidential
information filed in the record.21 Also on June 5, 2013, the Wireless Bureau released a public notice
announcing that Numbering Resource Utilization and Forecast ("NRUF") reports and local number
portability ("LNP") data would be placed into the record and adopted a protective order pursuant to
which the Applicants and third parties would be allowed to review the specific NRUF reports and LNP
data placed into the record.22
9.
Maneesh Pangasa, in a document submitted in this proceeding and in the proceeding
addressing the transfer of various spectrum licenses by AT&T, Verizon Wireless, and Grain,23 urges the
Commission to combine its review of both sets of proposed transactions.24 In addition to being late-
filed, the statement appears to reflect several procedural defects, including a failure to serve the
Applicants.25 Mr. Pangasa supplemented this statement with five other submissions that raise general
concerns about spectrum aggregation and various wireless industry practices.
10.
We have declined to consolidate the proceedings as Mr. Pangasa requests in his late-
filed statement.26 The Commission has broad authority to "conduct its proceedings in such manner as
will best conduce to the proper dispatch of business and to the ends of justice."27 The Pangasa

21 Applications of AT&T Inc. and Atlantic Tele-Network, Inc. for Consent To Transfer Control and Assign Licenses
and Authorizations, WT Docket No. 13-54, Protective Order, 28 FCC Rcd 8197 (WTB 2013); Applications of
AT&T Inc. and Atlantic Tele-Network, Inc. for Consent To Transfer Control and Assign Licenses and
Authorizations, WT Docket No. 13-54, Second Protective Order, 28 FCC Rcd 8204 (WTB 2013); Applications of
AT&T Inc. and Atlantic Tele-Network, Inc. for Consent To Transfer Control and Assign Licenses and
Authorizations, WT Docket No. 13-54, Supplement to Second Protective Order, Appendix A (Revised), 28 FCC
Rcd 8886 (WTB 2013) (together, the "Protective Orders"). The unredacted version of this Memorandum Opinion
and Order shall be available upon request to qualified persons who have executed the signed acknowledgements
required by the Protective Orders. Qualified persons who have not yet signed the required acknowledgments may
do so in order to obtain the confidential version of this Memorandum Opinion and Order.
22 Applications of AT&T Inc., and Atlantic Tele-Network, Inc. for Consent To Transfer Control and Assign
Licenses and Authorizations, Numbering Resource Utilization and Forecast Reports and Local Numbering
Portability Reports to Be Placed Into the Record, Subject to Protective Order, WT Docket No. 13-54, Public Notice,
28 FCC Rcd 8219 (WTB 2013); Applications of AT&T Inc., and Atlantic Tele-Network, Inc. for Consent To
Transfer Control and Assign Licenses and Authorizations, WT Docket No. 13-54, NRUF/LNP Protective Order, 28
FCC Rcd 8213 (WTB 2013).
23 See WT Docket No. 13-56; Application of AT&T Mobility Spectrum LLC, ULS File No. 0005627587 (filed Feb.
6, 2013) (designated as the lead application in that transaction).
24 See Maneesh Pangasa Statement for the Record (filed May 10, 2013) ("Pangasa Statement").
25 Other apparent defects include failure to provide the filer's name, street address, telephone number, or signature.
26 Applications of AT&T Inc., Cellco Partnership d/b/a Verizon Wireless, Grain Spectrum, LLC, and Grain
Spectrum II, LLC, and Grain Spectrum II, LLC For Consent To Assign and Lease AWS-1 and Lower 700 MHz
Licenses, WT Docket No. 13-56, Memorandum Opinion and Order, DA 13-1854, at 12 (WTB rel. Sept. 3, 2013)
("AT&T-Verizon Wireless-Grain Order").
27 47 U.S.C. 154(j); see FCC v. Schreiber, 381 U.S. 279 (1965).
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Statement does not explain why the Commission should consolidate these proceedings. Mr. Pangasa
does not identify any substantive issues or competitive harms that would result from approval of the
transactions, and he fails as well to provide any evidence specific to these transactions. As such, we see
no basis to formally consolidate these proceedings.
11.
More recently, Mr. Pangasa filed a request that the Commission combine its review of
this transaction with the review of the recently filed AT&T-Leap Wireless transaction.28 For the same
reasons, and with the same legal basis, that we declined to consolidate review of this transaction with
our review of the AT&T-Verizon Wireless-Grain transaction, we have declined to consolidate this
transaction proceeding with the AT&T-Leap Wireless proceeding.

III.

STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK

12.
Pursuant to sections 214(a) and 310(d) of the Communications Act, we must determine
whether the Applicants have demonstrated that the proposed transfer of control and assignment of
licenses, authorizations, and spectrum leasing arrangements will serve the public interest, convenience,
and necessity.29 In making this assessment, we first examine whether the proposed transaction
complies with the specific provisions of the Communications Act,30 other applicable statutes, and the
Commission's rules.31 If the transaction does not violate a statute or rule, we next consider whether the
transaction could result in public interest harms by substantially frustrating or impairing the objectives

28 See Maneesh Pangasa Statement for the Record (filed Sept. 6, 2013) ("Pangasa Second Statement"). See also
AT&T Inc., Leap Wireless International, Inc., Cricket License Company, LLC, and Leap Licenseco, Inc. Seek
Consent to the Transfer of Control of AWS-1 Licenses, PCS Licenses, and Common Carrier Fixed Point to Point
Microwave Licenses, and International 214 Authorizations, and the Assignment of One 700 MHz License, WT
Docket No. 13-1831, Public Notice, DA 13-1831 (rel. Aug. 28, 2013). The Pangasa Second Statement suffers from
the same procedural defects as the Pangasa Statement.
29 See 47 U.S.C. 214(a), 310(d).
30 Section 310(d) requires that we consider the application as if the proposed assignee were applying for the licenses
directly under Section 308 of the Act, 47 U.S.C. 308. See, e.g., Applications of Cellco Partnership d/b/a Verizon
Wireless and SpectrumCo LLC and Cox TMI, LLC For Consent To Assign AWS-1 Licenses, WT Docket No. 12-4,
Memorandum Opinion and Order and Declaratory Ruling, 27 FCC Rcd 10698, 10710 28 (2012) ("Verizon
Wireless-SpectrumCo Order
").
31 See, e.g., Applications of GCI Communication Corp., ACS Wireless License Sub, Inc., ACS of Anchorage
License Sub, Inc., and Unicom, Inc. for Consent To Assign Licenses to The Alaska Wireless Network, WT Docket
No. 12-187, Memorandum Opinion and Order and Declaratory Ruling, 28 FCC Rcd 10433, 10442 23 (2013)
("Alaska Wireless Order"); Applications of SOFTBANK CORP., Starburst II, Inc., Sprint Nextel Corporation, and
Clearwire Corporation, IB Docket No. 12-343, Memorandum Opinion and Order, Declaratory Ruling, and Order on
Reconsideration
, 28 FCC Rcd 9642, 9650 23 (2013) ("SoftBank-Sprint Order"); Applications of AT&T Mobility
Spectrum LLC, New Cingular Wireless PCS, LLC, Comcast Corporation, Horizon Wi-Com, LLC, NextWave
Wireless, Inc., and San Diego Gas & Electric Company For Consent To Assign and Transfer Licenses, WT Docket
No. 12-240, Memorandum Opinion and Order, 27 FCC Rcd 16459, 16463-64 10 (2012) ("AT&T-WCS Order");
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10710 28.
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or implementation of the Communications Act or related statutes.32 We then employ a balancing test
weighing any potential public interest harms of the proposed transaction against any potential public
interest benefits.33 The Applicants bear the burden of proving, by a preponderance of the evidence, that
the proposed transaction, on balance, will serve the public interest.34
13.
Our public interest evaluation necessarily encompasses the "broad aims of the
Communications Act," which include, among other things, a deeply rooted preference for preserving
and enhancing competition in relevant markets, accelerating private sector deployment of advanced
services, promoting a diversity of license holdings, and generally managing the spectrum in the public
interest.35 Our public interest analysis also can entail assessing whether the proposed transaction will
affect the quality of communications services or result in the provision of new or additional services to
consumers.36 In conducting this analysis, we may consider technological and market changes, and the
nature, complexity, and speed of change of, as well as trends within, the communications industry.37
14.
Our competitive analysis, which forms an important part of the public interest
evaluation, is informed by, but not limited to, traditional antitrust principles.38 The Commission and the
DOJ each have independent authority to examine the competitive impacts of proposed communications
mergers and transactions involving transfers of Commission licenses, but the standards governing the
Commission's competitive review differ somewhat from those applied by the DOJ.39 Like the DOJ, the

32 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10442 23; SoftBank-Sprint Order, 28 FCC Rcd at 9650-51
23; AT&T-WCS Order, 27 FCC Rcd at 16463-64 10; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10710
28.
33 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10442 23; SoftBank-Sprint Order, 28 FCC Rcd at 9651 23;
AT&T-WCS Order, 27 FCC Rcd at 16463-64 10; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10710 28.
34 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10442 23; SoftBank-Sprint Order, 28 FCC Rcd at 9651 23;
AT&T-WCS Order, 27 FCC Rcd at 16463-64 10; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10710 28.
35 See, e.g., Application of AT&T Inc. and Qualcomm Incorporated For Consent To Assign Licenses and
Authorizations, WT Docket No. 11-18, Order, 26 FCC Rcd 17589, 17603 23 n.96 (2011) ("AT&T-Qualcomm
Order
"). See also Alaska Wireless Order, 28 FCC Rcd at 10442 24; SoftBank-Sprint Order, 28 FCC Rcd at 9651
24; Applications of AT&T Inc. and Centennial Communications Corp. For Consent To Transfer Control of
Licenses, Authorizations, and Spectrum Leasing Arrangements, WT Docket No. 08-246, Memorandum Opinion and
Order,
24 FCC Rcd 13915, 13928 28 (2009) ("AT&T-Centennial Order").
36 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10442 24; SoftBank-Sprint Order, 28 FCC Rcd at 9651 24;
AT&T-WCS Order, 27 FCC Rcd at 16464 11; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10752 143.
37 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10442-43 24; SoftBank-Sprint Order, 28 FCC Rcd at 9651
24; AT&T-WCS Order, 27 FCC Rcd at 16464 11; AT&T-Qualcomm Order, 26 FCC Rcd at 17599 24.
38 See, e.g., Alaska Wireless OrderI 28 FCC Rcd at 10443 25; SoftBank-Sprint Order, 28 FCC Rcd at 9651 25;
AT&T-WCS Order, 27 FCC Rcd at 16464-65 12; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10710 29.
39 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10443 25; SoftBank-Sprint Order, 28 FCC Rcd at 9651-52
25; AT&T-Qualcomm Order, 26 FCC Rcd at 17599-17600 25.
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Commission considers how a transaction will affect competition by defining a relevant market, looking
at the market power of incumbent competitors, and analyzing barriers to entry, potential competition,
and the efficiencies, if any, that may result from the transaction.40 The DOJ, however, reviews
telecommunications mergers pursuant to section 7 of the Clayton Act, and if it sues to block a merger, it
must demonstrate to a court that the merger may substantially lessen competition or tend to create a
monopoly.41 The DOJ's review also is limited solely to an examination of the competitive effects of the
acquisition, without reference to other public interest considerations.42 The Commission's competitive
analysis under the public interest standard is somewhat broader, considering, for example, whether a
transaction will enhance, rather than merely preserve, existing competition, and takes a more extensive
view of potential and future competition and its impact on the relevant market.43 Under the
Commission's review, the Applicants must show that the transaction will serve the public interest;
otherwise the application is set for hearing.44 Finally, the Commission's public interest authority enables
us, where appropriate, to impose and enforce narrowly tailored, transaction-specific conditions that
ensure that the public interest is served by the transaction.45

IV.

QUALIFICATIONS OF APPLICANTS

15.
Among the factors the Commission considers in its public interest review is whether the
applicant for a license has the requisite "citizenship, character, financial, technical, and other
qualifications."46 Therefore, as a threshold matter, the Commission must determine whether the
applicants to the proposed transaction both the assignee and the assignor meet the requisite

40 See, e.g, Alaska Wireless Order, 28 FCC Rcd at 10443 25; SoftBank-Sprint Order, 28 FCC Rcd at 9652 25;
AT&T-Centennial Order, 24 FCC Rcd at 13928 29.
41 15 U.S.C. 18.
42 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10443 25; SoftBank-Sprint Order, 28 FCC Rcd at 9652 25;
AT&T-Centennial Order, 24 FCC Rcd at 13929 29.
43 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10443 25; SoftBank-Sprint Order, 28 FCC Rcd at 9652 25;
AT&T-Qualcomm Order, 26 FCC Rcd at 17599-17600 25.
44 47 U.S.C. 309(e); see also AT&T-WCS Order, 27 FCC Rcd at 16464-65 12; AT&T-Qualcomm Order, 26 FCC
Rcd at 17599 25; Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings
Inc., Transferor, to Sirius Satellite Radio Inc., Transferee, Memorandum Opinion and Order and Report and Order,
23 FCC Rcd 12348, 12364 30 (2008); News Corp. and DIRECTV Group, Inc. and Liberty Media Corp. for
Authority To Transfer Control, Memorandum Opinion and Order, 23 FCC Rcd 3265, 3277 22 (2008).
45 47 U.S.C. 214(c) (authorizing the Commission to impose "such terms and conditions as in its judgment the
public convenience and necessity may require"), 303(r) (authorizing the Commission to prescribe restrictions or
conditions not inconsistent with law that may be necessary to carry out the provisions of the Communications Act);
see, e.g., Alaska Wireless Order, 28 FCC Rcd at 10443 26; SoftBank-Sprint Order, 28 FCC Rcd at 9652 25;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10711 30.
46 47 U.S.C. 308, 310(d); see also, e.g., Alaska Wireless Order, 28 FCC Rcd at 10444 28; SoftBank-Sprint
Order
, 28 FCC Rcd at 9652 26; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10712 33.
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qualifications requirements to hold and transfer licenses under section 310(d) and the Commission's
rules.47
16.
Discussion. As an initial matter, we note that no parties have raised issues with respect
to the basic qualifications of ATN. The Commission generally does not reevaluate the qualifications of
assignors unless issues related to basic qualifications have been sufficiently raised in petitions to warrant
designation for hearing.48 We find that there is no reason to reevaluate the requisite citizenship,
character, financial, technical, or other basic qualifications under the Communications Act and our rules,
regulations, and policies, of ATN.
17.
In addition, no issues have been raised with respect to the basic qualifications of AT&T.
AT&T previously and repeatedly has been found qualified to hold Commission licenses.49 We find that
there is no reason to reevaluate the requisite citizenship, character, financial, technical, or other basic
qualifications under the Communications Act and our rules, regulations, and policies, of AT&T.

V.

POTENTIAL PUBLIC INTEREST HARMS

18.
In reviewing applications involving a proposed transaction, the Commission evaluates
the potential public interest harms, including potential competitive harms that may result from the
transaction.50 The Commission undertakes a case-by-case review of the competitive effects of any
increase in market concentration or in spectrum holdings in the relevant markets.51 The Commission's
competitive analysis of wireless transactions focuses initially on markets where the acquisition of
customers and/or spectrum would result in significant concentration of either or both, and thereby
could lead to competitive harm.52 In its analysis, the Commission has used an initial screen to help
identify those markets that provide particular reason for further competitive analysis. As set out in
various transactions orders, however, the Commission has not limited its consideration of potential

47 See 47 U.S.C. 310(d); 47 C.F.R. 1.948; see also, e.g., Alaska Wireless Order, 28 FCC Rcd at 10444-45 28;
SoftBank-Sprint Order, 28 FCC Rcd at 9652-53 26; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10712
33.
48 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10445 29; SoftBank-Sprint Order, 28 FCC Rcd at 9653 27;
AT&T-WCS Order, 27 FCC Rcd at 16466 18.
49 See, e.g., AT&T-Verizon Wireless-Grain Order, DA 13-1854, at 17; AT&T-WCS Order, 27 FCC Rcd at 16466-
67 19.
50 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 34; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10716 47-48, 10734 95; AT&T-Qualcomm Order, 26 FCC Rcd at 17622-23 81.
51 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10716 48; AT&T-Qualcomm Order, 26 FCC Rcd at
17602 31; AT&T-Centennial Order, 24 FCC Rcd at 13938 50.
52 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 34.
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competitive harms solely to markets identified by its initial screen, if it encounters other factors that
may bear on the public interest inquiry.53

A.

Competitive Overview and Market Definitions

1.

Competitive Overview

19.
Horizontal transactions such as the proposed transaction, in which rival firms in the
same market are combining, raise potential competitive concerns when the combined entity has the
incentive and the ability, either by itself or in coordination with other service providers, to raise prices,
lower quality, or otherwise harm competition in a relevant market.54 In our market-by-market analysis,
we examine the likelihood of competitive harm by estimating the extent to which market concentration,
as measured by the Herfindahl-Hirschman Index ("HHI"), would increase as a result of the proposed
transaction.55 We assess the potential competitive effects, post-transaction, of these increases in
market concentration. In our market-by-market analysis, we also examine the likely competitive effects
of an increase in spectrum holdings on the marketplace.56 Spectrum is an essential input in the provision
of mobile wireless services, and ensuring that sufficient spectrum is available for incumbent licensees as
well as potential new entrants is critical to promoting effective competition and innovation in the
marketplace.57
20.
In considering the applications before us, we find, as detailed below, that the proposed
transaction would likely lead to competitive or other public interest harms in the provision of mobile
wireless services in several local markets.

53 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 35; AT&T-WCS Order, 27 FCC Rcd at 16467 21
(recognizing the proposition that the "Commission is not . . . limited in its consideration of potential competitive
harms solely to markets identified by its initial screen" and, in addition to considering 10 local markets identified by
the screen, analyzing the national market because the proposed acquisition would be in a substantial majority of
local markets across the country); Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10716 48; AT&T-
Qualcomm Order
, 26 FCC Rcd at 17609-10 49-50 (recognizing that up to three markets could be triggered by the
screen, but considering more broadly AT&T's post-transaction holdings under 1 GHz because, inter alia, of the
record in that proceeding and the substantial holdings that the company would then have under 1 GHz).
54 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 34; AT&T-Centennial Order, 24 FCC Rcd at 13931-32
34, 13939-42 54, 56-57, 59, 61, 13948 75; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17468-69 40-
43, 17484-85 82-83, 17487-88 91-92.
55 To assess whether the increase in horizontal market concentration is significant or not, we consider the absolute
level of the post-transaction HHI, a widely utilized measure of market concentration, as well as the change in the
HHI. See Section V.B.I infra.
56 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10446 33; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10716 48; AT&T-Qualcomm Order, 26 FCC Rcd at 17602 31.
57 See, e.g., AT&T-WCS Order, 27 FCC Rcd at 16467 20; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10716 48; AT&T-Qualcomm Order, 26 FCC Rcd at 17601-02 30.
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2.

Market Definitions

21.
We begin our competitive analysis by determining the appropriate market definitions
for the proposed transaction,58 including a determination of the product market, the geographic market,
the input market for spectrum suitable and available for the provision of mobile wireless services, and
the market participants.
22.
Product Market. We continue to use the product market definition that the Commission
has applied in recent transactions: a combined "mobile telephony/broadband services" product market
that is comprised of mobile voice and data services, including mobile voice and data services provided
over advanced broadband wireless networks (mobile broadband services).59 We note that no party in
the proceeding challenged this mobile telephony/broadband services product market definition.
23.
Geographic Market. The Commission has found that the relevant geographic markets
for certain wireless transactions generally are "local" and also has evaluated a transaction's competitive
effects at the national level where a transaction exhibits certain national characteristics that provide
cause for concern.60 As discussed below, for this transaction, we continue to use CMAs as the local
geographic markets, and find no reason to analyze competitive effects at a national level.
24.
The Applicants argue that it does not matter whether the geographic market is viewed
as local or national since AT&T and Allied are not close competitors, and, further, that Allied exerts no
influence on the competitive decision making of AT&T because of its small size and unusual footprint.61
The Applicants also note that the transaction does not reduce the number of nationwide competitors in
any market.62 No other party to the proceeding addresses whether we should use a local or national
geographic market definition or both.
25.
The Commission has found that the relevant geographic markets for wireless
transactions generally are "local"63 because most consumers use their mobile telephony/broadband
services where they live, work, and shop, and so purchase their services from service providers that

58 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10447 34; SoftBank-Sprint Order, 28 FCC Rcd at 9657 36;
AT&T-WCS Order, 27 FCC Rcd at 16468 23.
59 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10447 35; SoftBank-Sprint Order, 28 FCC Rcd at 9657 37;
AT&T-WCS Order, 27 FCC Rcd at 16468 24.
60 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10447-48 36; SoftBank-Sprint Order, 28 FCC Rcd at 9657
38; AT&T-WCS Order, 27 FCC Rcd at 16468 24; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10717
54.
61 Public Interest Statement at 16-18.
62 Id. at 17.
63 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10447-48 36; SoftBank-Sprint Order, 28 FCC Rcd at 9657
38; AT&T-WCS Order, 27 FCC Rcd at 16468 25.
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offer and market services locally.64 Service sold in distant locations is not a good substitute for service
near a consumer's home or work.65 In addition, service providers compete at the local level in terms of
coverage, service quality, and localized promotions.66 As the Commission has previously recognized,
however, two key competitive variables prices and service plan offerings do not vary for most
providers across most geographic markets.67
26.
While the Commission has in the past, where appropriate, analyzed in detail a
transaction's competitive effects at the national level, we see no reason to do so here. Through the
proposed transaction, AT&T would acquire a regionally dispersed network that covers approximately 4.7
million people or under two percent of the population of the mainland United States. Given the limited
local nature of the proposed transaction, we find it unlikely that there would be any significant effects of
the transaction at the national level.68 We therefore focus our analysis on any potential competitive
harm that would likely be realized at the local level.69
27.
Input Market for Spectrum. When a proposed transaction would increase the
concentration of spectrum holdings in any local market, the Commission evaluates the acquiring firm's
post-transaction holdings of spectrum that is "suitable" and "available" in the near term for the
provision of mobile telephony/broadband services.70 The Commission previously has determined that
cellular, broadband PCS, Specialized Mobile Radio ("SMR"), and 700 MHz band spectrum, as well as
Advanced Wireless Services ("AWS-1") and Broadband Radio Service ("BRS") spectrum where

64 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9657 38; AT&T-WCS Order, 27 FCC Rcd at 16469 26; see
also Sixteenth Annual Competition Report,
28 FCC Rcd at 3735 22-23.
65 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10448 37; AT&T-WCS Order, 27 FCC Rcd at 16469 26;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10718 56.
66 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10448; AT&T-WCS Order, 27 FCC Rcd at 16469 26; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10718 56.
67 See, e.g., AT&T-WCS Order, 27 FCC Rcd at 16469 27; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10718-19 57; AT&T-Qualcomm Order, 26 FCC Rcd at 17604-05 34-37.
68 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9657 38; AT&T-WCS Order, 27 FCC Rcd at 16469 28;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719 58. AT&T would be gaining approximately 620,000
subscribers in (mostly rural) markets, accounting for less than 1% of its current nationwide subscriber base of
approximately 107 million. Given the limited geographical scope and size of the proposed transaction, AT&T
would be unlikely to have an incentive to unilaterally increase its nationwide prices. In addition, it is unlikely that
the proposed transaction would change the incentive for any coordinated conduct on a national basis among the four
nationwide service providers.
69 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10448 37; SoftBank-Sprint Order, 28 FCC Rcd at 9657 38;
AT&T-WCS Order, 27 FCC Rcd at 16469 26.
70 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10448 37; SoftBank-Sprint Order, 28 FCC Rcd at 9657-58
39; AT&T-WCS Order, 27 FCC Rcd at 16469-70 29; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719
59.
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available,71 and most recently, Wireless Communications Services ("WCS") spectrum, all meet this
definition, and they have therefore been included in the initial spectrum screen.72
28.
For purposes of the instant transaction, we decline to modify the current input market
for spectrum. No party has argued that the Commission should modify in this proceeding which
spectrum bands are included in this input market,73 and we note that this issue, along with a range of
other related issues, are being considered by the Commission in its ongoing review of its policies
regarding mobile spectrum holdings.74
29.
Market Participants: As in previous transactions, we will consider only facilities-based
entities providing mobile telephony/broadband services using cellular, PCS, SMR, 700 MHz, AWS-1, BRS,
and WCS spectrum to be market participants, but will continue to assess the effect of mobile virtual
network operators and resellers in our competitive evaluation.75

B.

Competitive Effects of Transaction

1.

Initial Screen

30.
As discussed above, we apply a two-part screen to help identify local markets where
competitive concerns are more likely.76 The first part of the screen is based on the size of the post-

71 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10449 38; SoftBank-Sprint Order, 28 FCC Rcd at 9658 39;
Sprint Nextel Corporation and Clearwire Corporation Applications for Consent To Transfer Control of Licenses,
Leases, and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order, 23 FCC Rcd 17570, 17591-92
53 (2008).
72 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10449 38; SoftBank-Sprint Order, 28 FCC Rcd at 9659-60
42; AT&T-WCS Order, 27 FCC Rcd at 16470-71 31.
73 As discussed in Section V.B.1 infra, certain parties did request changes to the screen other than which bands are
included.
74 See generally Policies Regarding Mobile Spectrum Holdings, WT Docket No. 12-269, Notice of Proposed
Rulemaking
, 27 FCC Rcd 11710 (2012) ("Mobile Spectrum Holdings NPRM"). In the Mobile Spectrum Holdings
NPRM
, the Commission noted that during the pendency of the rulemaking proceeding, it would continue to apply its
current case-by-case approach to evaluate mobile spectrum holdings in secondary market transactions and initial
spectrum licensing after auctions. See Mobile Spectrum Holdings NPRM, 27 FCC Rcd 11710, 11718 16 n.59. See
also AT&T-WCS Order
, 27 FCC Rcd at 16470 30.
75 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10449-50 41; SoftBank-Sprint Order, 28 FCC Rcd at 9660
43; Applications of Deutsche Telekom AG, T-Mobile USA, Inc., and MetroPCS Communications, Inc., WT
Docket No. 12-301, Memorandum Opinion and Order and Declaratory Ruling, 28 FCC Rcd at 2334-35 37 (WTB,
IB 2013) ("T-Mobile-MetroPCS Order").
76 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 42; SoftBank-Sprint Order, 28 FCC Rcd at 9660 44;
Applications of AT&T Inc. and Cellco Partnership d/b/a/ Verizon Wireless, WT Docket No. 09-104, Memorandum
Opinion and Order
, 25 FCC Rcd 8704, 8720-21 32 (2010) ("AT&T-Verizon Wireless Order").
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transaction HHI, and the change in the HHI.77 For purposes of determining HHIs in this transaction, we
use our December 2012 NRUF database, which tracks phone number usage by all telecommunications
service providers.78 Consistent with our discussion of the local geographic market definition above, in
calculating HHIs and the change in the HHI, we analyze service provider data by CMA. The second part
of the screen, which is applied on a county-by-county basis, identifies local markets where an entity
would acquire more than approximately one-third of the total spectrum suitable and available for the
provision of mobile telephony/broadband services.79 Furthermore, because AT&T is acquiring spectrum
below 1 GHz in the majority of the CMAs, we also examine the possible competitive effects resulting
from an increase in mobile spectrum holdings below 1 GHz, consistent with Commission precedent.80
31.
Record. Public Knowledge argues that the transaction should be denied until the
Commission completes its review in the Mobile Spectrum Holdings Proceeding.81 RTG urges the
Commission to impose a reduced spectrum screen until the conclusion of that proceeding.82 RTG argues
that AT&T should be required to divest or lease spectrum in markets where the company would control
more than 25 percent of all suitable and available spectrum or 40 percent of all suitable and available

77 Our initial HHI screen identifies, for further case-by-case market analysis, those markets in which, post-
transaction: (1) the HHI would be greater than 2800 and the change in HHI would be 100 or greater; or (2) the
change in HHI would be 250 or greater, regardless of the level of the HHI. See, e.g., Alaska Wireless Order, 28
FCC Rcd at 10450 42 n. 135; AT&T-Verizon Wireless Order, 25 FCC Rcd at 8724-25 42.
78 These data indicate the number of assigned phone numbers that a wireless service provider has in a particular
wireline rate center. Rate centers are geographic areas used by local exchange carriers for a variety of reasons,
including the determination of toll rates. See HARRY NEWTON, NEWTON'S TELECOM DICTIONARY: 19TH EXPANDED
& UPDATED EDITION 660 (July 2003). All mobile wireless providers must report to the FCC the quantity of their
phone numbers that have been assigned to end users, thereby permitting the Commission to calculate the total
number of mobile subscribers. For purposes of geographical analysis, the rate center data can be associated with a
geographic point, and all of those points that fall within a county boundary can be aggregated together and
associated with much larger geographic areas based on counties.
79 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 42; AT&T-WCS Order, 27 FCC Rcd at 16469-70 29;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719 59. In particular, the spectrum screen is triggered
where the Applicants would have, on a market-by-market basis, a 10% or greater interest in: 102 megahertz or more
of cellular, PCS, SMR, 700 MHz, and WCS spectrum, where neither BRS nor AWS-1 spectrum is available; 121
megahertz or more of spectrum, where BRS spectrum is available, but AWS-1 spectrum is not available; 132
megahertz or more of spectrum, where AWS-1 spectrum is available, but BRS spectrum is not available; or 151
megahertz or more of spectrum where both AWS-1 and BRS spectrum are available. See AT&T-WCS Order, 27
FCC Rcd at 16471 33 n.94.
80 See AT&T-Qualcomm Order, 26 FCC Rcd at 17601-02 30.
81 Public Knowledge and the Writers Guild of America, West Petition To Deny (filed Apr. 4, 2013) at 3 ("Public
Knowledge Petition"). See generally Mobile Spectrum Holdings NPRM.
82 Rural Telecommunications Group, Inc. Comments (filed Apr. 4, 2013) at 2-3 ("RTG Comments"). Specifically,
in its application of the screen, RTG includes 14 megahertz of SMR spectrum, and 70 megahertz of lower 700 MHz
spectrum, which when combined with the other spectrum bands, gives a total of 429.5 megahertz. Id. at 4-5.
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spectrum below 1 GHz.83 Blue Wireless argues that BRS and AWS-1 spectrum should not be counted in
the spectrum screen in CMA 587 (Ohio 3 Ashtabula) because the spectrum is not currently in use by
wireless providers in Ohio 3 Ashtabula and, thus, that the Commission should not deem it available for
mobile telephony/broadband service.84
32.
The Applicants assert that claims made by RTG and Public Knowledge relating to the
changes to the spectrum screen are not transaction-specific and thus are not appropriate to consider.85
The Applicants also assert that AWS-1 and BRS are available in Ohio 3 Ashtabula and that the spectrum
should be included in the spectrum screen, as the availability of AWS-1 spectrum is readily verified from
the National Telecommunications and Information Administration's December 1, 2012 report, and
Clearwire has filed a construction notification with the Commission demonstrating that BRS spectrum is
available under the proper legal test.86
33.
Discussion. For purposes of the instant transaction, we decline to modify the current
spectrum screen with respect to the trigger level and spectrum amounts. As noted above, the
Commission is reviewing these issues, along with a number of related issues, in an ongoing rulemaking
proceeding.87 In addition, we find that AWS-1 and BRS spectrum are "available" in Ohio 3 Ashtabula
for purposes of application of our spectrum screen as the availability of AWS-1 spectrum has been
verified88 and BRS spectrum has been transitioned in this market.89
2.

Competitive Analysis

34.
The market for mobile telephony/broadband services in the United States is
differentiated. Service providers compete not only on the basis of price but also on other variables such

83 RTG Comments at 4-6. Further, RTG states that in the Mobile Spectrum Holdings proceeding it recommended
that all carriers be required to divest excess spectrum within an 18-month period but in the instant transaction, it now
proposes long-term spectrum leasing as an alternative to divestiture. Id. at 6-7.
84 Buffalo-Lake Erie Wireless Systems Co., L.L.C. Petition to Deny (filed Apr. 4, 2013) at 2-4 ("Blue Wireless
Petition"). See also Buffalo-Lake Erie Wireless Systems Co., L.L.C. Reply (filed Apr. 22, 2013) at 3 ("Blue
Wireless Reply").
85 Joint Opposition at 11-12 (noting that both Public Knowledge and RTG are participating in the Mobile Spectrum
Holdings
proceeding where these arguments are pertinent).
86 Joint Opposition at 6-8.
87 See Mobile Spectrum Holdings NPRM, 27 FCC Rcd at 11725-28 33-38.
88 See National Telecommunications and Information Administration, AWS (1710-1755 MHz) Transition, at
http://www.ntia.doc.gov/category/aws-1710-1755-mhz-transition.
89 See Letter from Robert H. McNamara, Director, Spectrum Management, Government Affairs, Sprint Nextel, to
Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket No. 06-136 (filed Dec. 12, 2007).
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as plan features, call quality, geographic coverage, and customer service.90 Competition may be harmed
either through unilateral actions by the combined entity, or through coordinated interaction among
service providers competing in the relevant market.
35.
Unilateral effects arise when the merged firm finds it profitable to alter its behavior
following the merger by increasing its price or otherwise harming competition.91 In the case of the
provision of mobile telephony/broadband services, in addition to increasing prices, this might take the
form of delaying improvements in service quality, adversely adjusting the features of a service offering
without changing the price of the plan, or reducing the rate of new product development or other
innovation in a relevant market. Coordinated effects arise when firms take actions that are profitable
for each of them only as a result of the accommodating reactions of others.92 Either or both unilateral
and coordinated effects may arise from a proposed transaction, and the distinction between them is not
always clear cut.93
36.
We examine the possibility of anticompetitive harms arising from the proposed
transaction that would affect the provision of mobile telephony/broadband services. We evaluate,
generally, the likely competitive effect of increased market and spectrum concentration, and assess
whether, post-transaction, the combined entity would have the incentive and ability to harm

90 While service providers can change some of these conduct variables, for example, price and customer service,
relatively quickly, other variables particularly non-price variables such as quality and coverage require
investments in spectrum or infrastructure and are not easily modified. See, e.g., Applications of Cellco Partnership
d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent To Transfer Control of Licenses, Authorizations, and
Spectrum Manager and De Facto Transfer Leasing Arrangements and Petition For Declaratory Ruling that the
Transaction Is Consistent with Section 310(b)(4) of the Communications Act, WT Docket No. 08-95, Memorandum
Opinion and Order and Declaratory Ruling
, 23 FCC Rcd 17444, 17485 85 (2008) ("Verizon Wireless-ALLTEL
Order
"); Applications of AT&T Wireless Services, Inc. and Cingular Wireless Corporation, WT Docket No. 04-70,
Memorandum Opinion and Order, 19 FCC Rcd 21522, 21570, 116 (2004).
91 See, e.g., Horizontal Merger Guidelines, U.S. Department of Justice and the Federal Trade Commission, August
19, 2010, at 6, p. 20 ("2010 DOJ/FTC Horizontal Merger Guidelines") ("A merger between firms selling
differentiated products may diminish competition by enabling the merged firm to profit by unilaterally raising the
price of one or both products above the pre-merger level."). See also, e.g., Alaska Wireless Order, 28 FCC Rcd at
10451 44; T-Mobile-MetroPCS Order, 28 FCC Rcd at 2336 42; AT&T-Centennial Order, 24 FCC Rcd at 13939-
40 54; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17485 84.
92 A merger may diminish competition by enabling or encouraging post-merger coordinated interaction among firms
in the relevant market that harms customers. 2010 DOJ/FTC Horizontal Merger Guidelines at 7, p. 24. See also,
e.g., Alaska Wireless Order, 28 FCC Rcd at 10460-61 65; T-Mobile-MetroPCS Order, 28 FCC Rcd at 2336-37
43; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17491 101; AT&T-Centennial Order, 24 FCC Rcd at
13942 59.
93 See 2010 DOJ/FTC Horizontal Merger Guidelines at 2. See also, e.g., Alaska Wireless Order, 28 FCC Rcd at
10446 33 n.104.
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competition in any local market by adversely changing any local promotions, decreasing its investment
in network coverage or network quality, or reducing its customer service.
37.
Record. RTG, Public Knowledge, and Blue Wireless argue that the elimination of Allied
would result in competitive harm in terms of spectrum holdings and market concentration.94 RTG
asserts that competitive harm results from spectrum concentration in any market with fewer than four
providers regardless of whether those providers are nationwide or not.95 RTG contends that each
incremental addition of spectrum entrenches the duopoly position of AT&T and Verizon Wireless while
debilitating all small providers in the country.96 Public Knowledge argues that it is difficult to conceive
how spectrum that would be competitively harmful if held by Verizon Wireless would not cause similar
competitive harm if held by AT&T,97 and notes that the spectrum aggregation screen is triggered.98
Public Knowledge asserts that the transaction only entrenches the largest wireless carriers' market
dominance the opposite result of what the original market divestiture from Verizon Wireless-ALLTEL
was expected to do.99 Further, Blue Wireless argues that the markets were originally sold to Allied
because AT&T could not buy them given the market concentration at the time.100 Blue Wireless
contends that an analysis of the market concentration will confirm the lack of relative competition in the
market today with AT&T and Verizon Wireless as duopoly firms.101 Blue Wireless argues that the record
does not support the argument that Allied is a failing company that is hard-pressed to survive absent
this transaction.102
38.
The Applicants respond that, post-transaction, at least four competitors would remain in
almost every area affected by the proposed transaction.103 The Applicants argue that claims of a
duopoly overlook the fact that AT&T and Verizon Wireless occupy vastly different competitive positions

94 RTG Comments at 3-4; Public Knowledge Petition at 4-7; Blue Wireless Petition at 5-6; Rural
Telecommunications Group, Inc. Reply Comments (filed Apr. 22, 2013) at 1-4 ("RTG Reply Comments").
95 RTG Comments at 3.
96 RTG Reply Comments at 3.
97 Public Knowledge Petition at 3.
98 Id.
99 Id. at 7.
100 Letter from Donald J. Evans, Counsel for Buffalo-Lake Erie Wireless, LLC, to Marlene H. Dortch, Secretary,
FCC, WT Docket 13-54, attachment at 6 (filed May 14, 2013) ("Blue Wireless May 14th Ex parte"); Blue Wireless
Petition at 6.
101 Blue Wireless Petition at 5-6.
102 Letter from Donald J. Evans, Counsel for Buffalo-Lake Erie Wireless, LLC, to Marlene H. Dortch, Secretary,
FCC, WT Docket 13-54, 4 (filed Aug. 15, 2013) ("Blue Wireless Aug. 15th Ex parte").
103 Joint Opposition at 3-4.
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in the relevant CMAs.104 The Applicants argue that the proposed transaction is procompetitive given
Allied's declining significance and AT&T's existing modest presence in Allied's territory.105
39.
Discussion: In our market-by-market analysis set out below, we examine the likelihood
of competitive harm by assessing the potential competitive effects of any significant increases in market
and spectrum concentration on the marketplace. Further, in the instant transaction, AT&T is acquiring
spectrum below 1 GHz in the majority of the CMAs, and consistent with Commission precedent, we also
examine whether AT&T's post-transaction aggregation of spectrum below 1 GHz could foreclose or raise
the costs of other service providers in these markets, and thereby prevent such rival service providers
from exerting an effective competitive constraint in the marketplace.106
40.
Our application of the initial HHI screen to the proposed transaction triggers 21 local
markets.107 In addition, our application of the initial total spectrum screen triggers one local market,
CMA 587 (Ohio 3 Ashtabula), which is also triggered by the HHI screen.108 As part of our analysis of
these markets, we also consider the potential impact of the aggregation of spectrum below 1 GHz by
AT&T.109 We evaluate whether it is likely that there would be any competitive or other public interest
harms resulting from increased market or spectrum concentration in these markets.
41.
In undertaking our market-by-market analysis,110 we consider various competitive
variables that help to predict the likelihood of competitive harm post-transaction.111 In our review, we

104 Id. at 6.
105 Id. at 4.
106 See AT&T-Qualcomm Order, 26 FCC Rcd at 17601-02 30.
107 The 21 CMAs that trigger the HHI screen are: CMA 166 (Hickory, NC); CMA 227 (Anderson, SC); CMA 231
(Mansfield, OH); CMA 261 (Albany, GA); CMA 377 (Georgia 7 Hancock); CMA 378 (Georgia 8 Warren);
CMA 379 (Georgia 9 Marion); CMA 380 (Georgia 10 Bleckley); CMA 382 (Georgia 12 Liberty); CMA 383
(Georgia 13 Early); CMA 390 (Idaho 3 Lemhi); CMA 401 (Illinois 8 Washington); CMA 402 (Illinois 9
Clay); CMA 566 (North Carolina 2 Yancey); CMA 569 (North Carolina 5 Anson); CMA 586 (Ohio 2
Sandusky); CMA 587 (Ohio 3 Ashtabula); CMA 625 (South Carolina 1 Oconee); CMA 626 (South Carolina 2
Laurens); CMA 627 (South Carolina 3 Cherokee); and CMA 631 (South Carolina 7 Calhoun).
108 In all markets implicated by the proposed transaction, the appropriate trigger is 151 megahertz. Post-transaction,
AT&T would hold 155 megahertz of spectrum in CMA 587, which triggers the spectrum screen by 4 megahertz.
109 AT&T would acquire 25 megahertz of cellular spectrum across 26 CMAs, and 12 megahertz of Lower 700 MHz
Band spectrum across 9 CMAs. The maximum amount of spectrum below 1 GHz that AT&T would hold in any
market, post-transaction, is 55 megahertz, or just over one-third of the total amount of spectrum below 1 GHz that
the Commission has determined is suitable and available for the provision of mobile telephony/broadband services.
See also AT&T-Verizon Wireless-Grain Order, DA 13-1854, at 41 n.115. We find that the potential for
competitive harm from these spectrum acquisitions, apart from their inclusion in our analysis of individual markets
discussed below, is unlikely.
110 We derive market shares and HHIs from our analysis of data compiled in our 2012 NRUF and LNP database. We
derive network coverage from Mosaik July 2013 data and 2010 U.S. Census data, and we obtain spectrum holdings
(continued....)
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organize our market-by-market analysis in state-bounded clusters consistent with the Modified Final
Judgment in United States v. Verizon Communications Inc. and ALLTEL Corporation.112 The Modified
Final Judgment directed that the majority of the markets be divested in clusters, each cluster to be sold
to a single purchaser unless DOJ approval was obtained to break up a cluster to multiple acquirers, and
our analysis is mindful of this direction in analyzing the potential competitive effects.113 The DOJ
clustered the divested CMAs together to promote competition, as service providers may benefit from
potential efficiencies from serving a larger geographic area, and are likely to be more competitive when
serving contiguous areas.114 In deciding the particular clusters, the DOJ "recognized that selling areas
with significant linkages across these areas provides greater assurance that the buyer will be an effective
competitor."115
42.
After carefully evaluating the various market characteristics that may indicate whether
there would be a likelihood of competitive harm from AT&T's proposed acquisition of Allied, we find
that, with the exception of the Ohio markets, competitive harm is likely in at least one local market in
each of the six state clusters. In our evaluation of the other triggered markets in the state clusters, we
(Continued from previous page)
from our licensing databases and the Applications. In addition, we examine porting data from our 2012 LNP
database, as well as from data submitted by the Applicants, which includes each instance of a customer porting a
phone number from one mobile provider to another, and indicates both the origin and destination provider. We
also utilized and analyzed the additional data as provided by the Applicants through our information requests.
111 These competitive variables include, but are not limited to: the total number of rival service providers; the
number of rival firms that can offer competitive nationwide service plans; the coverage by technology of the firms'
respective networks; the rival firms' market shares; the combined entity's post-transaction market share and how
that share changes as a result of the transaction; the amount of spectrum suitable for the provision of mobile
telephony/broadband services controlled by the combined entity; and the spectrum holdings of each of the rival
service providers. See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10454-56 51-55; AT&T-WCS Order, 27 FCC
Rcd at 16472 34; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10725-26 72.
112 On October 30, 2008, DOJ filed a series of documents reflecting the settlement between the DOJ and Verizon
Wireless and ALLTEL Corporation designed to eliminate the anticompetitive effects of the Verizon Wireless-ALLTEL
merger in certain markets, and the parties jointly filed proposed Final Judgments. See ATN-Verizon Wireless Order,
25 FCC Rcd 3763, 3772 18. On April 7, 2010, the DOJ approved the proposed divestiture of 26 markets to ATN.
See U.S. v. Verizon Comm., 607 F.Supp.2d at 5-10 (D.D.C. 2009), as modified, United States, et. al v. Verizon
Communications, Inc., and ALLTEL Corporation, 2011 WL 1882488, 6-9 (D.D.C. 2011) ("Modified Final Judgment").
113 See U.S. v. Verizon Comm., 607 F.Supp.2d at 7-9. The Modified Final Judgment will expire on April 23, 2019,
ten years from the date of its entry. U.S. v. Verizon Comm., 607 F.Supp.2d at 14.
114 See United States, State of Alabama, State of California, State of Iowa, State of Kansas, State of Minnesota,
State of North Dakota, and State of South Dakota, Plaintiffs, v. Verizon Communications, Inc. and Alltel
Corporation
, Defendants, 2008 WL 5737926 (Trial Filing) (D.D.C. Oct. 30, 2008) Competitive Impact Statement, at
16 (No. 108-CV-01878).
115 Id.
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find that the likelihood of competitive harm is low in certain of the triggered markets, based on the
particular facts in each market, which include but are not limited to capacity and the ability of other rival
service providers to offer competitive services.116 We discuss below our reasons for finding competitive
harm likely in several of the triggered markets, beginning with our analysis of the Georgia markets, and
then evaluating in turn the markets in Idaho, North Carolina, South Carolina, and Illinois.
43.
Georgia: This cluster contains nine local markets,117 seven of which are rural.118 Seven
of the nine Georgia markets trigger the HHI screen; with the exception of CMA 261 (Albany, GA), the
triggered markets are rural. Our market-by-market analysis identifies concerns that, post-transaction,
competitive harm would be likely in five of these seven local markets.119 The number of service
providers with significant market presence would be reduced from three to two in all five of these rural
markets.120 Currently, AT&T's market share ranges from approximately [REDACTED] percent and Allied's
market share ranges from approximately [REDACTED] percent. Across the five markets, the market
share of the combined entity would range from approximately [REDACTED] percent.121 Verizon

116 See AT&T-Centennial Order, FCC Rcd at 13948-49 76.
117 The markets are CMA 153 (Columbus, GA-AL), CMA 261 (Albany, GA), CMA 376 (Georgia 6 Spalding), CMA 377
(Georgia 7 Hancock), CMA 378 (Georgia 8 Warren), CMA 379 (Georgia 9 Marion), CMA 380 (Georgia 10
Bleckley), CMA 382 (Georgia 12 Liberty), and CMA 383 (Georgia 13 Early). In CMA 378 (Georgia 8 Warren),
the license is held by Georgia RSA #8 Partnership, in which Allied has an approximate 33% interest. Eight of these
nine CMAs were included in the DOJ cluster; Allied subsequently acquired an additional 12 megahertz of 700 MHz
B block spectrum in CMA 153.
118 The population density is measured by the number of people per square mile using Census 2010 data. Rural
markets are characterized by fewer than 100 people per square mile. See Facilitating the Provision of Spectrum-
Based Services to Rural Areas and Promoting Opportunities for Rural Telephone Companies To Provide Spectrum
Based Services, Report and Order, 19 FCC Rcd 19078, 19087-88 (2004).
119 These five markets are CMA 377 (Georgia 7 Hancock) with a population of 144,313 and a population density
of 48.4, CMA 378 (Georgia 8 Warren) with a population of 182,793 and a population density of 39.7, CMA 379
(Georgia 9 Marion) with a population of 131,255 and a population density of 33.9, CMA 380 (Georgia 10
Bleckley) with a population of 182,694 and a population density of 43.9, and CMA 383 (Georgia 13 Early) with a
population of 157,078 and a population density of 41.5.
120 In CMA 377, the post-transaction HHI is [REDACTED] and the change in the HHI is [REDACTED]. The respective
values are [REDACTED] in CMA 378, [REDACTED] in CMA 379, [REDACTED] in CMA 380, and [REDACTED] in CMA
383. In this Memorandum Opinion and Order, "[

REDACTED

]," "[

BEGIN CONFIDENTIAL

]" and "[

END
CONFIDENTIAL

]," and "[

BEGIN HIGHLY CONFIDENTIAL

]" and "[

END HIGHLY CONFIDENTIAL

]" indicates confidential
or proprietary information, or analysis based on such information, submitted pursuant to the Protective Orders in
this proceeding.
121 As proxied by porting data, AT&T and Allied are not close substitutes in these markets. Approximately
[REDACTED]% of Allied's subscribers ported to AT&T and approximately [REDACTED]% of AT&T's
subscribers ported to Allied in 2012. 2012 LNP Data; ATN IR Response, June 19, 2013, at 45-46; AT&T IR
Response, June 19, 2013, at 32.
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Wireless's market share ranges from approximately [REDACTED] percent.122 With respect to network
coverage, Verizon Wireless would be the only other service provider besides the combined entity with
significant total coverage post-transaction.123 Further, Verizon Wireless has deployed a significant LTE
network in these markets.124 AT&T has significant total coverage, and while its HSPA+ or LTE coverage
varies by market, it covers no more than approximately 43 percent of the land area with HSPA+ and its
LTE deployment is substantially more limited.125 Across the five markets, the two other nationwide
service providers, Sprint and T-Mobile, each hold [REDACTED] percent of the market, and neither has
significant advanced broadband coverage in any market.126

122 With regard to spectrum, post-transaction AT&T's spectrum holdings would range from 73-125 megahertz of
spectrum across the five markets, including 43-55 megahertz of spectrum below 1 GHz, while Verizon Wireless's
spectrum holdings range from 77-117 megahertz, Sprint's spectrum holdings range from 104.75-118.25 megahertz,
and T-Mobile's spectrum holdings range from 45-90 megahertz. Other licensees also hold spectrum in parts of or
throughout the five markets, with spectrum holdings in their licensed areas ranging from 6-40 megahertz.
123 The Commission has previously found coverage of 70% or more of the population and 50% or more of the land
area as presumptively sufficient for a provider to have a competitive presence in a market. See, e.g., T-Mobile-
MetroPCS Order
, 28 FCC Rcd at 2339 50 n.119; AT&T-Verizon Wireless Order, 25 FCC Rcd at 8733 65.
Population and land area coverage are derived from Mosaik, July 2013, and the 2010 U.S. Census data.
124 Verizon Wireless's total coverage is at least 98% of the population and 92% of the land area. Further, its LTE
network covers at least 96% of the population and 84% of the land area in these five markets.
125 AT&T covers over 70% of the population with HSPA+ in CMA 377 and CMA 383, and over 30% of the
population with LTE in CMA 377 and CMA 380, and has at least 34% HSPA+ population coverage in the other
three markets, but does not have significant HSPA+ or LTE land area coverage in any of these Georgia markets,
with its HSPA+ land area coverage ranging from approximately 10% to 43%, and its LTE land area coverage
ranging from less than 1% to 29%.
126 We note that T-Mobile has significant total population and land coverage in CMA 378 and CMA 379, and Sprint
does not have significant total population or land area coverage in any of these five markets. Further, while
Southern Linc has significant total population and land area coverage in all five markets, it has a [REDACTED]
market share and limited spectrum and is unlikely to be able to effectively respond to any anticompetitive behavior.
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44.
Post-transaction, AT&T and Verizon Wireless between them would account for
approximately [REDACTED] percent of the market's subscribers. Post-transaction, we also note that
AT&T and Verizon Wireless would be the only two service providers that would have both a significant
market share and significant total coverage in terms of population and land area in the markets. Of the
two other nationwide service providers, neither Sprint nor T-Mobile has a significant market presence or
significant 3G or advanced broadband coverage in any of these markets, which would likely limit their
ability to quickly and effectively respond to any anticompetitive behavior. In light of the particular facts
of these five markets, including but not limited to the reduction in the number of significant service
providers, capacity, and the ability of other rival service providers to offer competitive services, we find
that the proposed transaction would likely lessen competition in these five rural markets, and thus
would likely harm the public interest.
45.
Idaho: This cluster contains four rural local markets,127 one of which (CMA 390 (Idaho 3
Lemhi)) triggers the HHI screen. Post-transaction, the number of service providers with significant
market presence would be reduced from three to two.128 Currently, AT&T's market share is
approximately [REDACTED] percent and Allied's market share is approximately [REDACTED] percent.
Post-transaction, the market share of the combined entity would be approximately [REDACTED]
percent.129 Verizon Wireless's market share is approximately [REDACTED] percent, and no other service
provider is present in the market.130 This market is exceptionally rural, with a population of 19,332, and
a population density of 1.7. With respect to network coverage, no service providers, including the
combined entity, would have significant total coverage post-transaction, and further, advanced
broadband coverage is extremely limited.131 AT&T covers approximately 30 percent of

127 The markets are CMA 388 (Idaho 1 Boundary), CMA 389 (Idaho 2 Idaho), CMA 390 (Idaho 3 Lemhi), and
CMA 700 (Washington 8 Whitman). We note that CMA 389 and CMA 390 only made up the DOJ cluster, and
Allied is assigning an additional 10 megahertz of PCS spectrum to AT&T in CMA 388 and CMA 700.
128 The post-transaction HHI is [REDACTED] and the change in the HHI is [REDACTED].
129 As proxied by porting data, AT&T and Allied are not close substitutes in this market. Approximately
[REDACTED]% of Allied's subscribers ported to AT&T and approximately [REDACTED]% of AT&T's
subscribers ported to Allied in 2012. 2012 LNP Data; ATN IR Response, June 19, 2013, at 45-46; AT&T IR
Response, June 19, 2013, at 32.
130 AT&T would hold 93-108 megahertz of spectrum post-transaction, including 43 megahertz of spectrum below 1
GHz, while Verizon Wireless holds 57-77 megahertz, Sprint holds 57-112.5 megahertz, and T-Mobile holds 50-60
megahertz of spectrum. Other licensees also hold spectrum in parts of or throughout the market, with spectrum
holdings in their licensed areas ranging from 6-49 megahertz.
131 As neither AT&T nor Allied currently have significant total coverage, there would not be a reduction in the
number of service providers in terms of network coverage. Currently, Allied's, AT&T's, and Verizon Wireless's
total coverage ranges from approximately 39% to 59% of the population and 6% to 22% of the land area. The only
other service providers with any network coverage are T-Mobile, which covers approximately 53% of the
population and 8% of the land area, and Syringa Wireless, which covers approximately 18% of the population and
30% of the land area.
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the population and two percent of the land area with HSPA+, but has no LTE deployment, while Verizon
Wireless covers approximately 42 percent of the population and three percent of the land area with its
LTE network.
46.
Post-transaction, AT&T and Verizon Wireless between them would account for
approximately [REDACTED] percent of the market's subscribers. The two other nationwide service
providers are present in this market only in the form of T-Mobile's limited 2G and 3G coverage.132 Thus,
we find that neither Sprint nor T-Mobile would be able to quickly and effectively respond to any
anticompetitive behavior. In light of the particular facts of this market, including but not limited to the
reduction in the number of significant service providers, capacity, and the ability of other rival service
providers to offer competitive services, we find that the proposed transaction would likely lessen
competition in this rural market, and thus would likely harm the public interest.
47.
North Carolina: This cluster contains three local markets,133 one of which is rural, and all
three trigger the HHI screen. We find that there is some likelihood for competitive harm in rural CMA
569 (North Carolina 5 Anson).134 AT&T's market share is approximately [REDACTED] percent and
Allied's market share is approximately [REDACTED] percent. The combined entity would hold over
[REDACTED] of the market post-transaction.135 Verizon Wireless's market share is approximately
[REDACTED] percent, and Sprint holds approximately [REDACTED] percent of the market.136 With
respect to network coverage, besides the combined entity, two other service providers, Verizon
Wireless and T-Mobile, would have significant total coverage post-transaction.137

132 T-Mobile's 3G coverage is approximately 33% of the population and 3% of the land area.
133 The three markets are CMA 166 (Hickory, NC) with a population of 282,468 and a population density of 242.0,
CMA 566 (North Carolina 2 Yancey) with a population of 185,302 and a population density of 118.4, and CMA
569 (North Carolina 5 Anson) with a population of 137,542 and a population density of 75.7.
134 The post-transaction HHI is [REDACTED] and the change in the HHI is [REDACTED].
135 As proxied by porting data, AT&T and Allied are not particularly close substitutes in this market. Approximately
[REDACTED]% of Allied's subscribers ported to AT&T and approximately [REDACTED]% of AT&T's
subscribers ported to Allied in 2012. 2012 LNP Data; ATN IR Response, June 19, 2013, at 45-46; AT&T IR
Response, June 19, 2013, at 32.
136 Post-transaction, AT&T would hold 103-123 megahertz of spectrum, including 43 megahertz of spectrum below
1 GHz, Verizon Wireless holds 97-107 megahertz, Sprint holds 68.75-103.25 megahertz, and T-Mobile holds 40-50
megahertz. Other licensees also hold spectrum in parts of or throughout the market, with spectrum holdings in their
licensed areas ranging from 6-22 megahertz.
137 Verizon Wireless's total coverage extends to approximately 98% of the population and 92% of the land area,
while it has deployed LTE to approximately 80% of the population and 69% of the land area. T-Mobile's total
coverage extends to approximately 82% of the population and 57% of the land area. Further, as well as its
significant total coverage, AT&T covers approximately 73% of the population and 41% of the land area with
HSPA+ but has less than 1% LTE deployment.
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48.
Post-transaction, AT&T and Verizon Wireless between them would account for
approximately [REDACTED] percent of the market's subscribers. Post-transaction, we also note that
AT&T and Verizon Wireless would be the only two service providers that would have both a significant
market share and significant total coverage in terms of population and land area in the market. While
Sprint has a significant market share, it does not have significant 2G or 3G coverage, and while T-Mobile
has significant total coverage, it does not have a significant market share.138 This would likely limit the
ability of either Sprint or T-Mobile to quickly and effectively respond to any anticompetitive behavior. In
light of the particular facts of this market, including but not limited to the reduction in the number of
significant service providers, capacity, and the ability of other rival service providers to offer competitive
services, we find that competition would likely be lessened in this market, and thus, the proposed
transaction would likely harm the public interest.
49.
South Carolina: This cluster contains five local markets,139 three of which are rural, and
all five trigger the HHI screen. We find that there is some likelihood of competitive harm in CMAs 627
and 631.140 AT&T's market share ranges from approximately [REDACTED] percent and Allied's market
share ranges from approximately [REDACTED] percent. The market share of the combined entity, post-
transaction, would range from approximately percent.141 Verizon Wireless's market share ranges from
approximately [REDACTED] percent, and Sprint holds approximately [REDACTED]

138 Sprint's 2G and 3G coverage is just less than significant, it covers approximately 69% of the population and 40%
of the land area. Although T-Mobile has significant total coverage, it has not built out a network capable of offering
advanced broadband services, and further, it has some retail presence, but holds only a [REDACTED]% market
share.
139 The markets are CMA 227 (Anderson, SC) with a population of 187,126 and a population density of 260.8, CMA
625 (South Carolina 1 Oconee) with a population of 74,273 and a population density of 118.4, CMA 626 (South
Carolina 2 Laurens) with a population of 256,216 and a population density of 70.9, CMA 627 (South Carolina 3
Cherokee) with a population of 141,399 and a population density of 65.0, and CMA 631 (South Carolina 7
Calhoun) with a population of 156,703 and a population density of 55.1. We note that DOJ required that CMA 625,
CMA 626, CMA 627, and CMA 631 be divested to the same acquirer as the wireless business assets in CMA 227
pursuant to the proposed Modified Final Judgment in United States v. Bell Atlantic Corp. et al., Civ No.
1:99CV01119 (EGS) (D.D.C. May 7, 1999).
140 The post-transaction HHI for CMA 627 is [REDACTED] and the change in the HHI is [REDACTED], while
the respective values are [REDACTED] in CMA 631.
141 As proxied by porting data, AT&T and Allied are not particularly close substitutes in these markets.
Approximately [REDACTED]% of Allied's subscribers ported to AT&T and approximately [REDACTED]% of
AT&T's subscribers ported to Allied in 2012 in the two markets. 2012 LNP Data; ATN IR Response, June 19,
2013, at 45-46; AT&T IR Response, June 19, 2013, at 32.
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percent in both markets.142 With respect to network coverage, only two other service providers other
than the combined entity, Verizon Wireless and T-Mobile, would have significant total coverage post-
transaction.143
50.
Post-transaction, AT&T and Verizon Wireless between them would account for
approximately [REDACTED] percent of the two markets' subscribers. Post-transaction, we also note that
AT&T and Verizon Wireless would be the only two service providers that would have both a significant
market share and significant total coverage in terms of population and land area in each market. While
Sprint has a significant market share, it does not have significant 2G or 3G coverage, and while T-Mobile
has significant total coverage, it does not have a significant market share.144 This would likely limit the
ability of either Sprint or T-Mobile to quickly and effectively respond to any anticompetitive behavior. In
light of the particular facts of these two markets, including but not limited to the reduction in the
number of significant service providers, capacity, and the ability of other rival service providers to offer
competitive services, we find that competition would likely be lessened in these two rural markets, and
thus, the proposed transaction would likely harm the public interest.
51.
Illinois: This cluster contains two rural local markets,145 both of which trigger the HHI
screen. We find that there is some potential for competitive harm in CMA 401.146 AT&T's market share
is approximately [REDACTED] percent and Allied's market share is approximately [REDACTED] percent.
Post-transaction, the market share of the combined entity would be approximately [REDACTED]
percent.147 In this market, Verizon Wireless holds approximately [REDACTED] percent and Sprint holds

142 Post-transaction, AT&T would hold 103-115 megahertz of spectrum, including 43-55 megahertz of spectrum
below 1 GHz, while Verizon Wireless holds 77-107 megahertz, Sprint holds 75.25-112.5 megahertz, and T-Mobile
holds 40-100 megahertz. Other licensees also hold spectrum in parts of or throughout the two markets, with
spectrum holdings in their licensed areas ranging from 6-32 megahertz.
143 As well as total coverage to at least 96% of the population and 81% of the land area, Verizon Wireless covers
89% to 97% of the population and 72% to 86% of the land area with LTE in the two markets. T-Mobile's total
coverage extends to at least 81% of the population and 58% of the land area. Further, AT&T covers 57% to 73% of
the population and 29% to 41% of the land area with HSPA+, and also has 42% population and 20% land area LTE
coverage in CMA 631.
144 With its 2G and 3G offerings, Sprint covers 61% and 51% of the population and 29% and 27% of the land area in
CMA 627 and CMA 631 respectively. T-Mobile has significant total coverage in both markets, but has not built out
a network capable of offering advanced broadband services, and although it has some retail presence in both
markets, it holds [REDACTED]% market share.
145 The two markets are CMA 401 (Illinois 8 Washington) with a population of 335,723 and a population density
of 66.8 and CMA 402 (Illinois 9 Clay) with a population of 144,723 and a population density of 31.8.
146 In CMA 401, the post-transaction HHI is [REDACTED] and the change in the HHI is [REDACTED].
147 As proxied by porting data, AT&T and Allied are not close substitutes in this market. Approximately
[REDACTED]% of Allied's subscribers ported to AT&T and approximately [REDACTED]% of AT&T's
(continued....)
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approximately [REDACTED] percent of the market.148 With respect to network coverage, we find that
post-transaction, besides the combined entity, two rival service providers, Verizon Wireless and T-
Mobile, would have significant total coverage.149
52.
Post-transaction, AT&T and Verizon Wireless between them would account for
approximately [REDACTED] percent of the market's subscribers. Post-transaction, we also note that
AT&T and Verizon Wireless would be the only two service providers that would have both a significant
market share and significant total coverage in terms of population and land area in the market. While
Sprint has a [REDACTED] percent market share, it does not have significant 2G or 3G coverage, and
while T-Mobile has significant total coverage, it does not have a significant market share.150 This would
likely limit the ability of the other two nationwide service providers to quickly and effectively respond to
any anticompetitive behavior. In light of the particular facts of this market, including but not limited to
the reduction in the number of significant service providers, capacity, and the ability of other rival
service providers to offer competitive services, we find that competition would likely be lessened in this
market, and thus, the proposed transaction would likely harm the public interest.
53.
Ohio. This cluster is comprised of seven non-rural CMAs151 and three of these CMAs
trigger the HHI screen.152 After a close review of the particular facts of these markets, we do not find
that competitive harm is likely in the Ohio cluster.
(Continued from previous page)
subscribers ported to Allied in 2012. 2012 LNP Data; ATN IR Response, June 19, 2013, at 45-46; AT&T IR
Response, June 19, 2013, at 32.
148 Post-transaction, AT&T would hold 125-145 megahertz of spectrum, including 55 megahertz of spectrum below
1 GHz, while Verizon Wireless holds 67-97 megahertz, Sprint holds 72.625-122.75 megahertz, and T-Mobile holds
30-60 megahertz. Other licensees also hold spectrum in parts of or throughout the market, with spectrum holdings
in their licensed areas ranging from 6-62 megahertz.
149 T-Mobile's total coverage extends to approximately 92% of the population and 85% the land area, while Verizon
Wireless's population and land area percentages are 99% and 97%, respectively. Further, AT&T covers 66% of the
population and 42% of the land area with HSPA+, and 49% of the population and 28% of the land area with LTE,
while Verizon Wireless's LTE network covers 95% and 91%, respectively.
150 While T-Mobile has significant total coverage, it holds only a [REDACTED] market share, and has no retail
presence nor has it built out a network capable of offering advanced broadband services. In contrast, although
Sprint has [REDACTED]% of the market, it covers approximately 50% of the land area, but only 67% of the
population with its 2G and 3G service offerings
151 The DOJ cluster includes CMA 158 (Lima, OH) with a population of 215,523 and a population density of 127.1,
CMA 231 (Mansfield, OH) with a population of 124,475 and a population density of 251.3, CMA 586 (Ohio 2
Sandusky) with a population of 254,394 and a population density of 149.2, CMA 587 (Ohio 3 Ashtabula) with a
population 101,497 and a population density of 144.6, CMA 589 (Ohio 5 Hancock) with a population of 239,740
and a population density of 108.3, and CMA 590 (Ohio 6 Morrow) with a population of 509,166 and a population
density of 142.3. We note that DOJ required that CMA 158, CMA 231, CMA 586, CMA 589, and CMA 590 be
divested to the same acquirer as the wireless business assets in CMA 587 pursuant to the proposed Modified Final
Judgment in United States v. Bell Atlantic Corp. et al., Civ No. 1:99CV01119 (EGS) (D.D.C. May 7, 1999).
(continued....)
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54.
Blue Wireless asserts that CMA 587 (Ohio 3 Ashtabula) is a densely concentrated
market and AT&T and Verizon Wireless dominate the market with their spectrum holdings.153 Further,
(Continued from previous page)
Additionally, Alltel Wireless has since acquired 12 megahertz of 700 MHz Lower B-Block in CMA 588 (Ohio 4 -
Mercer) with a population of 241,354 and a population density of 102.3.
152 In CMAs 231, the post-transaction HHI is [REDACTED] and the change in the HHI is [REDACTED]. The
respective values are [REDACTED] in CMA 586 and [REDACTED] in CMA 587.
153 Blue Wireless Petition at 5.
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Blue Wireless argues that neither Sprint nor T-Mobile should be considered a facilities-based provider in
the market because Sprint provides wireless service in CMA 587 pursuant to a roaming agreement, and
T-Mobile provides minimal voice-only coverage and no 3G or 4G service.154 In addition, Blue Wireless
argues that Allied's rates are very competitive against the major wireless providers and customers will
incur a higher cost if forced to migrate to another provider.155
55.
Based on our review of the record, we find that in CMA 587 (Ohio 3 Ashtabula), in
addition to AT&T and Verizon Wireless, Sprint and T-Mobile are both facilities-based providers that
would have a significant market presence post-transaction, and that competitive harm would be
unlikely. In addition to AT&T and Verizon Wireless, both Sprint and T-Mobile have over a [REDACTED]
percent market share. Further, while AT&T would hold 155 megahertz of spectrum post-transaction,
including 55 megahertz of spectrum below 1 GHz, Verizon Wireless holds 109 megahertz of spectrum,
Sprint holds 90.375 megahertz of spectrum, and T-Mobile holds 60 megahertz of spectrum. In addition,
other licensees also hold spectrum throughout the market, with spectrum holdings ranging from 6 to 10
megahertz. Moreover, as well as AT&T and Verizon Wireless, both Sprint and T-Mobile have significant
total coverage, and AT&T has significant HSPA+ coverage, while Verizon Wireless has significant LTE
coverage.156 We find that the particular facts in Ohio 3 Ashtabula, including but not limited to capacity
and the ability of other rival service providers to offer competitive services, as well as the particular facts
in the other markets in Ohio in general, make it unlikely that competition would be lessened, and thus
the proposed transaction would not be likely to harm the public interest.
56.
In undertaking our market-by-market analysis, organized in state-bounded clusters, we
have considered various competitive variables that helped us to predict the likelihood of competitive
harm post-transaction, as discussed above.157 We find that, with the exception of the Ohio markets,
that competitive harm is likely in at least one local market in each of the six state clusters. We find that
the totality of the circumstances in ten local markets would be likely to provide an incentive to act

154 Blue Wireless Reply at 4-5.
155 Letter from Donald J. Evans, Counsel for Buffalo-Lake Erie Wireless, LLC, to Marlene H. Dortch, Secretary,
FCC, WT Docket 13-54,Attachment (filed May 24, 2013) (noting that loss of ALLTEL as a carrier in Ohio 3
Ashtabula would have an adverse impact on consumer choice).
156 Verizon Wireless covers 99% of the population and 97% of the land area with LTE, and AT&T covers 83% of
the population and 60% of the land area with HSPA+. Sprint's total coverage is 82% of the population and 61% of
the land area, while T-Mobile covers 99% of the population and 97% of the land area. Both Sprint and T-Mobile's
coverage is 2G.
157 We note that as an additional method to assess the potential for unilateral competitive effects, we also conducted
certain analyses consistent with the 2010 DOJ/FTC Horizontal Merger Guidelines, which yielded results in line
with our other analyses. See 2010 DOJ/FTC Horizontal Merger Guidelines 6.1, p. 21.
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anticompetitively.158 As discussed, in light of the particular facts of these ten markets, including but not
limited to the reduction in the number of significant service providers, capacity and the ability of other
rival service providers to offer competitive services, we find that competition would likely be lessened in
these markets, and thus, the proposed transaction would likely harm the public interest.

158 Those ten markets are CMA 377 (Georgia 7 Hancock), CMA 378 (Georgia 8 Warren), CMA 379 (Georgia 9
Marion), CMA 380 (Georgia 10 Bleckley), CMA 383 (Georgia 13 Early), CMA 390 (Idaho 3 Lemhi), CMA 569
(North Carolina 5 Anson), CMA 627 (South Carolina 3 Cherokee), CMA 631 (South Carolina 7 Calhoun), and
CMA 401 (Illinois 8 Washington).
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C.

Roaming

57.
RTG and Blue Wireless argue that the loss of Allied as a Code Division Multiple Access
("CDMA") roaming partner eliminates competitive pressure on nationwide providers to maintain
reasonable roaming rates and compete fairly in the marketplace.159 RTG and Blue Wireless further
argue that roaming rates faced by small providers are excessive and the problem of negotiating
reasonable roaming rates is compounded with each acquisition by the major wireless providers.160
58.
According to the Applicants, AT&T is assuming Allied's contractual obligations to
maintain a CDMA network to provide roaming services.161 The Applicants assert that Verizon Wireless,
Sprint, and other wireless providers are also available for roaming agreements.162 Lastly, the Applicants
assert that the Commission's roaming rules protect against unreasonable roaming terms, and providers
can readily file complaints with the Commission pursuant to established roaming rules.163
59.
Discussion. With regard to the arguments expressing concern about the availability of
roaming, we find that the Commission's general roaming policies and rules should ensure that entities
can obtain roaming agreements on reasonable terms and conditions. In the event that a service
provider, including Blue Wireless, encounters difficulties in obtaining desired roaming services under our
rules and policies, it can file complaints with the Commission pursuant to our established roaming
rules.164 We conclude that the other data roaming conditions proposed by RTG and Blue Wireless are

159 RTG Comments at 3; Blue Wireless Comments at 2. Further, RTG urges the Commission to impose roaming
conditions in markets where AT&T would hold over 40 percent of spectrum below 1 GHz or over 25 percent of all
available spectrum. RTG Comments at 7. In addition, Blue Wireless argues that Allied is a potential roaming
partner through its legacy agreement with the former wireless provider ALLTEL, and that Blue Wireless would be
harmed if AT&T is allowed to transition Allied's CDMA network to Global System for Mobile Communications
("GSM"). Blue Wireless Petition at 2; Blue Wireless Reply at 2-3.
160 RTG Reply Comments at 4; Blue Wireless Aug. 15th Ex parte at 2 (asserting that reasonable roaming rates are a
product of a multi-player marketplace where multiple providers with differing geographic coverage areas need to
roam on each other's networks, and that competitive marketplace model becomes less and less accurate each time a
large regional provider is bought up by one of the two majors). See also RTG Reply Comments at 4 (arguing that it
is necessary for customers of competing providers to have access to cost-effective data roaming).
161 Joint Opposition at 10.
162 Joint Opposition at 8-9. The Applicants also dispute the assertions of Blue Wireless that the company has a
roaming agreement with Allied. Joint Opposition at 8.
163 Joint Opposition at 10.
164 See Roaming Obligations of Commercial Mobile Radio Service Providers, Report and Order and Further Notice
of Proposed Rulemaking
, 22 FCC Rcd 15817, 15828 27 (2007) ("[W]e recognize that automatic roaming benefits
mobile telephony subscribers by promoting seamless CMRS service around the country, and reducing inconsistent
coverage and service qualities."); Reexamination of Roaming Obligations of Commercial Mobile Radio Service
Providers, Order on Reconsideration and Second Further Notice of Proposed Rulemaking, 25 FCC Rcd 4181, 4192
2 (2010) (eliminates the home roaming exclusion and establishes the same general obligation to provide automatic
voice roaming, regardless of whether the provider requesting roaming holds spectrum in an area); Reexamination of
(continued....)
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not narrowly tailored to remedy any purported harms arising out of this transaction, and accordingly,
we will not impose these proposed conditions.
60.
The Commission has recognized, however, that the continued ability of wireless
customers to roam is an important concern when wireless service providers intend to transition network
technology as a result of a proposed transaction.165 Thus, the Commission has previously conditioned
consent of a proposed transaction on the ability of wireless service providers to have access, on behalf
of their customers, to roaming services in the areas affected by the transaction for a specified period of
time.166 Following Allied's acquisition of the ALLTEL divestiture markets, it acquired various roaming
agreements.167 The Applicants say that, under the purchase agreement, AT&T is assuming Allied's
current contractual roaming obligations to maintain a CDMA network and to provide roaming
services.168 Our analysis finds that the various roaming agreements to be assumed by AT&T have
differing expiration dates, and raise questions whether the CDMA network for roaming will be
maintained for all providers for a reasonable period of time.

D.

Other Issues

61.
Record. Public Knowledge and RTG urge the Commission, should it decide to approve
the proposed transaction, to impose other conditions that they assert will promote competition and
offset any harms that might otherwise result.169 First, in light of the 700 MHz licenses that would be
transferred to AT&T pursuant to this transaction, Public Knowledge and RTG recommend that the
Commission impose 700 MHz interoperability requirements on AT&T.170 Second, Public Knowledge and
RTG urge the Commission to require as a condition of any license transfers that AT&T not enter into any
exclusive equipment deals that disadvantage smaller operators.171 Third, Public Knowledge
(Continued from previous page)
Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services,
WT Docket No. 05-265, Second Report and Order, 26 FCC Rcd 5411 (2011), aff'd sub nom. Cellco Partnership v.
FCC
, 700 F.3d 534 (DC Cir. 2012)..
165 AT&T-Verizon Wireless Order, 25 FCC Rcd at 8746-88748 95-101.
166 AT&T-Verizon Wireless Order, 25 FCC Rcd at 8746-88748 95-101.
167 ATN-000057075; ATN IR Response, June 19, 2013, at 26-28. Further, we note that Allied derives some revenue
when roaming partners of ATN's subsidiary, Commnet Wireless, roam in Allied markets pursuant to Commnet
GSM roaming agreements. Id. at 26. Under the purchase agreement, the Commnet GSM roaming agreements are
excluded assets and are not subject to the transaction because they are not primarily related to Allied's business. Id.
at 26. Commnet is a separate wholly-owned subsidiary of ATN that provides wholesale service, and the income
derived from its GSM network covers parts of Idaho, Illinois and Georgia. We note that post-transaction, AT&T
and T-Mobile remain potential GSM roaming partners in these areas.
168 Joint Opposition at 10.
169 Public Knowledge Petition at 4-6; RTG Comments at 7; RTG Reply Comments at 5.
170 Public Knowledge Petition at 4-5; RTG Comments at 8-9.
171 Public Knowledge Petition at 5; RTG Comments at 9.
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recommends that any early termination fees imposed by AT&T be tied to specific equipment costs on a
pro-rated basis.172 Finally, Public Knowledge states that service providers with an advantage in special
access and backhaul provision are able to leverage that advantage to keep their costs low,173 and asserts
that therefore the Commission should require that a provider that would increase its market power as a
result of the proposed transaction should make its backhaul and special access services available to
competitors on the same terms it enjoys.174
62.
The Applicants assert that Public Knowledge and RTG have not identified any
transaction-specific harms that the proposed interoperability, handset exclusivity, early termination fee,
and special access and backhaul conditions would address.175 Instead, according to the Applicants, these
proposed conditions relate only to alleged harms that exist regardless of the transaction and that are or
were the subject of industry-wide proceedings, and consistent with past practice, we should decline to
impose these conditions.176
63.
Discussion. We conclude that the conditions proposed by Public Knowledge and RTG
regarding interoperability, handset exclusivity, early termination fees, and special access and backhaul
obligations are not narrowly tailored to remedy any purported harms arising out of this transaction. In
particular, regarding the interoperability issues raised by Public Knowledge and RTG, we note that the
Commission has an ongoing rulemaking proceeding to address such issues on an industry-wide basis,
and that recent filings in that proceeding propose a voluntary industry solution to implement
interoperability for all paired spectrum in the lower 700 MHz band.177 We accordingly will not impose
these proposed conditions.

VI.

POTENTIAL PUBLIC INTEREST BENEFITS

64.
After assessing the potential competitive harms of the proposed transaction, we next
consider whether the proposed transaction is likely to generate verifiable, transaction-specific public

172 Public Knowledge Petition at 5-6.
173 Id. at 6.
174 Id.
175 Joint Opposition at 11.
176 Id. at 12-13.
177 Letter from Joan Marsh, Vice Pres. Fed. Regulatory, AT&T Services, Inc. to the Hon. Mignon Clyburn,
Chairwoman, FCC, WT Docket No. 12-69 (filed Sept. 10, 2013); Letter from Jeffrey H. Blum, Senior Vice Pres. &
Dep. Gen. Counsel, DISH Network, Corp., to the Hon. Mignon Clyburn, Chairwoman, FCC, WT Docket No. 12-69
(filed Sept. 10, 2013); Letter from Grant Spellmeyer, Vice Pres. Fed. Affairs & Pub. Policy, US Cellular, Ben
Moncrief, Dir. Govt. Relations, C Spire Wireless, Scott Wills, Vulcan Wireless LLC, Allison Cryor DiNardo,
Pres., Gen. Partner, King Street Wireless, L.P., Nash Nyland, Gen. Counsel, Cavalier Wireless LLC, T.Clark Akers,
Exec. Vice Pres. Continuum 700 LLC, and Steven K. Berry, Pres. and CEO, Competitive Carriers Association to the
Hon. Mignon Clyburn, Chairwoman, FCC, WT Docket No. 12-69 (filed Sept. 10, 2013).
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interest benefits that outweigh any identified competitive harms.178 As discussed below, we anticipate
that the proposed transaction likely would facilitate certain transaction-specific public interest benefits,
but not to the degree that we can conclude that these public interest benefits would likely outweigh the
competitive concerns identified above. We reach our conclusion regarding public interest benefits
recognizing that it is difficult for us to precisely quantify either the magnitude of or the time period in
which these benefits would be realized.179 When the transaction-specific public interest benefits are
coupled with AT&T's voluntary commitments with respect to buildout, roaming, and customer transition
(as well as the additional information provided by AT&T regarding its customer transition plans) as
discussed below, we find that it is in the public interest to approve the proposed transaction.

A.

Analytical Framework

65.
The Commission has recognized that "[e]fficiencies generated through a merger can
mitigate competitive harms if such efficiencies enhance the merged firm's ability and incentive to
compete and therefore result in lower prices, improved quality of service, enhanced service or new
products."180 Under Commission precedent, the Applicants bear the burden of demonstrating that the
potential public interest benefits of the proposed transaction outweigh the potential public interest
harms.181
66.
The Commission applies several criteria in deciding whether a claimed benefit should be
considered and weighed against potential harms.182 First, the claimed benefit must be transaction-
specific.183 Second, the claimed benefit must be verifiable.184 Because much of the information relating

178 See, e.g., Applications of AT&T Inc. and Cellular South, Inc. For Consent To Assign Licenses Covering Parts of
Alabama, Georgia, and Tennessee, ULS File Nos. 0005597386 and 0005597395, Memorandum Opinion and Order,
DA 13-783, 16 (WTB rel. Aug. 20, 2013) ("AT&T-CellSouth Order"); Alaska Wireless Order, 28 FCC Rcd at
10467 85; SoftBank-Sprint Order, 28 FCC Rcd at 9677-78 91; T-Mobile-MetroPCS Order, 28 FCC Rcd 2322,
2341 56; AT&T-WCS Order, 27 FCC Rcd at 16474 40; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10734 95.
179 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9678 91; AT&T-WCS Order, 27 FCC Rcd at 16459 40; AT&T-
Qualcomm Order
, 26 FCC Rcd at 17623 82.
180 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 86; SoftBank-Sprint Order, 28 FCC Rcd at 9678 92;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 57; AT&T-WCS Order, 27 FCC Rcd at 16474-75 41; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10734 96.
181 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 86; SoftBank-Sprint Order, 28 FCC Rcd at 9678 92;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 57; AT&T-WCS Order, 27 FCC Rcd at 16474-75 41; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10734 96.
182 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; SoftBank-Sprint Order, 28 FCC Rcd at 9678 93;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 58; AT&T-WCS Order, 27 FCC Rcd at 16475 42; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10734 97.
183 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; SoftBank-Sprint Order, 28 FCC Rcd at 9678 93;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 58; AT&T-WCS Order, 27 FCC Rcd at 16475 42.
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to the potential benefits of a transaction is in the sole possession of the applicants, they are required to
provide sufficient evidence supporting each claimed benefit so that the Commission can verify its
likelihood and magnitude. Third, the Commission has stated that it "will more likely find marginal cost
reductions to be cognizable than reductions in fixed cost."185 The Commission has justified this criterion
on the ground that, in general, reductions in marginal cost are more likely to result in lower prices for
consumers.186 In addition, "the magnitude of benefits must be calculated net of the cost of achieving
them."187 Further, benefits expected to occur only in the distant future may be discounted or dismissed
because, among other things, predictions about the distant future are inherently more speculative than
predictions that are expected to occur closer to the present.188 Finally, the Commission applies a "sliding
scale approach" to evaluating benefit claims.189 Under this sliding scale approach, where potential
harms appear "both substantial and likely, a demonstration of claimed benefits also must reveal a higher
degree of magnitude and likelihood than we would otherwise demand."190

B.

Potential Benefits

67.
The Applicants claim that the proposed transaction would benefit the customers of both
companies.191 According to the Applicants, Allied customers would gain access to more services and
(Continued from previous page)
184 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; SoftBank-Sprint Order, 28 FCC Rcd at 9678 93;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 58; AT&T-WCS Order, 27 FCC Rcd at 16475 42; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10735 97.
185 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd
at 10735 97; AT&T-Centennial Order, 24 FCC Rcd at 13954 90.
186 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd
at 10735 97; AT&T-Centennial Order, 24 FCC Rcd at 13954 90.
187 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 87; SoftBank-Sprint Order, 28 FCC Rcd at 9678 93;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 58; AT&T-WCS Order, 27 FCC Rcd at 16475 42; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10735 97.
188 See, e.g., AT&T-Centennial Order, 24 FCC Rcd at 13954 90.
189 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 88; SoftBank-Sprint Order, 28 FCC Rcd at 9678 93;
T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 59; AT&T-WCS Order, 27 FCC Rcd at 16475 42; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10735 98.
190 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10468 88; SoftBank-Sprint Order, 28 FCC Rcd at 9678-79
93; T-Mobile-MetroPCS Order, 28 FCC Rcd at 2342 59; AT&T-WCS Order, 27 FCC Rcd at 16475 42; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10735 98; cf. 2010 DOJ/FTC Horizontal Merger Guidelines at 10,
p. 31 ("The greater the potential adverse competitive effect of a merger . . . the greater must be cognizable
efficiencies in order for the Agency to conclude that the merger will not have an anticompetitive effect in the
relevant market. When the potential adverse competitive effect of a merger is likely to be particularly large,
extraordinarily great cognizable efficiencies would be necessary to prevent the merger from being
anticompetitive.").
191 Public Interest Statement at 6.
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features, experience improved service, and benefit from economies of scale and scope.192 The
Applicants assert further that Allied faces a number of significant impediments to being able to deploy
high-quality 4G service, without which it will struggle to remain competitive.193 The Applicants also
claim that the proposed transaction would extend AT&T's network coverage in rural areas.194
1.

Deployment of Advanced Broadband Technologies

68.
The Applicants assert that the proposed transaction would bring advanced 4G service to
more customers than Allied could cover on its own and at a much faster pace.195 The Applicants claim
that Allied does not currently have sufficient spectrum to build a 4G network,196 and further assert that it
has been unable to acquire additional spectrum that would allow for a 4G upgrade.197 Moreover, the
Applicants allege that even a limited 4G deployment would require virtually all of Allied's available
spectrum in most markets and thereby degrade the customer experience for its 2G and 3G customers.198
69.
The Applicants maintain that AT&T expects to integrate the networks and transition
Allied's customers to its 4G network.199 In seven of these CMAs, AT&T currently holds 12 megahertz of
Lower 700 MHz Band B or C Block spectrum with an initial LTE deployment of 5x5 megahertz.200 In these
seven markets, AT&T claims that the additional spectrum will not only allow it to deploy LTE with a
10x10 megahertz configuration,201 but that its LTE handsets will support service in the Lower 700 MHz
Band frequencies to be transferred from Allied to AT&T.202 Moreover, AT&T represents that it can
integrate the Allied 700 MHz spectrum in these seven markets where it already has 700 MHz operations
within 60 to 90 days of the closing of the proposed transaction.203

192 Id. at 6.
193 Joint Opposition at 4.
194 Public Interest Statement at 6, 10.
195 Id. at 7.
196 Id. at 7, 22.
197 Lead Application, Declaration of William F. Kreisher, Senior Vice President, Corporate Development, Atlantic
Tele-Network, Inc., at 7 ("Kreisher Declaration").
198 Id. at 7.
199 Public Interest Statement at 7, 10.
200 AT&T IR Response, June 19, 2013, at 7-8. In the remaining two CMAs where Allied holds a Lower 700 MHz
Band license, AT&T currently has no Lower 700 MHz Band B or C Block spectrum. Id. at 8.
201 AT&T IR Response, June 19, 2013, at 8. See also AT&T-Verizon Wireless-Grain Order, DA 13-1854, at 58
n.176; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10726 73.
202 AT&T IR Response, June 19, 2013, at 8.
203 Id.
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70.
AT&T asserts that it plans to deploy 4G HSPA+ on [REDACTED] sites in the integrated
network in Allied's territory.204 AT&T estimates that it will incorporate [REDACTED] of Allied's cell sites
into AT&T's network,205 and it asserts that it plans to deploy LTE on [REDACTED] of these sites.206
2.

Expanded and Improved Services and Features

71.
According to the Applicants, post-transaction, Allied's customers would gain access to a
range of services available on AT&T's network,207 with the result that the proposed transaction would
result in better service and a better customer experience for these customers.208 Among other things,
the Applicants claim, Allied's customers would have access to a wider variety of rate plans and a more
robust set of data services.209 This access also would include the ability to make and receive calls in
more than 225 countries, access data services in more than 200 countries, and use nearly 190,000 WiFi
hot spots globally.210 The Applicants also indicate that the proposed transaction would benefit Allied
customers in AT&T's wireline service areas by allowing them to receive wireline/wireless bundle
discounts.211
72.
In contrast, according to the Applicants and as explained above, Allied currently
operates ten noncontiguous "island properties,"212 and further, 78 percent of Allied's subscribers reside
in a county that is on the border of Allied's licensed areas.213 Because of this, the Applicants claim that
many of Allied's customers experience degraded service due to, e.g., dropped calls and signal loss,214 and
ATN has had limited success in remedying this situation.215

204 AT&T Second Supplemental IR Response, July 17, 2013, at 2.
205 AT&T IR Response, June 19, 2013, at 15.
206 AT&T Second Supplemental IR Response, July 17, 2013, at 2.
207 Public Interest Statement at 8.
208 Id. at 1, 8-9.
209 Id. at 9.
210 Id. at 8.
211 Id. at 9.
212 Allied notes that, unlike any other regional carrier, its ten non-contiguous and unnaturally shaped rural island
properties surround metropolitan areas but do not include the metropolitan areas themselves where most subscribers
work or spend significant amounts of time. ATN IR Response, June 19, 2013, at 27.
213 Public Interest Statement at 19-21.
214 Id. at 21.
215 ATN IR Response, June 19, 2013, at 31-33.
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3.

Cost Savings

73.
According to the Applicants, the proposed transaction would yield substantial cost
savings due to, among other things, "reduced per-subscriber costs of acquiring customers, the reduction
of general and administrative costs, the consolidation of cell sites, the reduction of network operating
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expenses, and the consolidation of customer billing functions."216 The Applicants assert that AT&T
expects to save costs through decommissioning redundant Allied sites.217 AT&T expects to
decommission [REDACTED].218 Further, AT&T anticipates achieving net operational synergies of
[REDACTED].219 AT&T also claims that sales and marketing expenses would be reduced by
[REDACTED].220 Finally, the Applicants assert that roaming costs will decline sharply as a result of the
transaction.221 The Applicants allege that these savings will benefit subscribers.222
74.
The Applicants claim that Allied's "island properties" have led to inefficiencies and
higher expenses in a number of different operational areas, including switching and interconnection
infrastructure, redundant field network and sales expenses, and advertising.223 Further, the Applicants
note that Allied incurs unusually high roaming expenses because customers spend significantly more
time off-network than customers on more contiguous networks; this situation is exacerbated, according
to the Applicants, by the rapidly increasing rate of mobile broadband usage.224
4.

Benefits to AT&T's Customers

75.
The Applicants assert that not only will Allied's customers benefit from the proposed
transaction, but so will AT&T's customers.225 The Applicants allege that AT&T has limited coverage in
many of the areas now served by Allied.226 The Applicants represent very generally that the integration

216 Public Interest Statement at 11. See also AT&T IR Response, June 19, 2013, at 10-14.
217 Public Interest Statement at 11.
218 AT&T IR Response, June 19, 2013, at 12.
219 Id. at 11. The underlying model and data for estimating these cost savings is provided in ATTF-ATN00000096.
220 AT&T IR Response, June 19, 2013, at 12.
221 Public Interest Statement at 11.
222 Id. at 6.
223 Id. at 21-22; Joint Opposition at 4. Allied states that the impact of the company's scattered footprint has been
exacerbated in three ways since 2010: 1) explosive data growth has increased long-term roaming exposure;
2) network edges were created in unnatural locations leading to service quality issues and churn elevation; and
3) misalignment with Designated Market Areas ("DMAs") for media purchasing led to inefficiencies resulting in
limited brand awareness and customer advertising. ATN IR Response, June 19, 2013, at 20-23.
224 Public Interest Statement at 22; Joint Opposition at 4. Allied argues that, in addition to straining the company's
3G network and limited spectrum capacity, high data roaming usage has been particularly burdensome due to its
roaming cost structure. Allied asserts that approximately 10% of Allied subscriber's calls and data down/uploads
occur on other carriers' networks a number that is 5-15 times the industry roaming average of only 1-3%. ATN IR
Response, June 19, 2013, at 25.
225 Public Interest Statement at 6.
226 Id. at 10.
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of the two networks will broaden and deepen coverage, increase capacity in areas where the networks
overlap and AT&T integrates complementary Allied cell sites, and expand the availability of 4G network
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coverage, all of which would lead to a better customer experience for the customers of AT&T and Allied,
particularly in rural areas.227
5.

Customer Transition Plans

76.
With regard to customer transition, AT&T's original statements in the Public Interest
Statement were limited only to general representations, e.g., that it would integrate the Allied
customers "rapidly and seamlessly," so that these customers would relatively quickly experience the
benefits of transitioning to the AT&T network.228 AT&T noted in the Public Interest Statement that it has
experience transitioning customers in previous transactions, a number of which have been far larger.229
77.
AT&T provided some additional information about its customer transition plans in June
and July in its responses to the Wireless Bureau's information requests. AT&T explained that it expected
that it would migrate the majority of Allied customers [REDACTED] and as soon as the network is
ready.230 AT&T said it would [REDACTED].231 AT&T also said that it planned [REDACTED].232 For
postpaid customers with term contracts, AT&T stated it planned [REDACTED].233 AT&T commented that
it was [REDACTED].234 AT&T also indicated that those postpaid customers [REDACTED].235
78.
In late August and September, AT&T provided more details about its plans for migrating
Allied's prepaid customers. AT&T alleged that prepaid customers frequently upgrade their devices, and
thus AT&T expected that a large percentage of Allied's existing CDMA prepaid customer would be
quickly and naturally migrated to the upgraded network.236 AT&T states that it plans to migrate prepaid
customers to its LTE/HSPA+/GSM network by allowing them to purchase HSPA+ and HSPA+/LTE devices,
which also are backward compatible to GSM, as it launches network upgrades.237 AT&T says it would
continue to support CDMA prepaid service until at least July 2014 so that Allied's prepaid

227 Id.
228 Id. at 7, 9
229 Id. at 9.
230 AT&T IR Response, June 19, 2013, at 23.
231 Id.
232 Id. Customers alternatively can choose to purchase a different handset. Id. at 23-24.
233 Id. at 24. To the extent AT&T is unable to make this offer, such customers will have the option of choosing
another AT&T plan or terminating contracts with no early termination fee. Id.
234 Id.
235 AT&T Second Supplemental Response, July 17, 2013, at 12.
236 AT&T Third Supplemental Response, August 28, 2013, at 3.
237 Id.
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customers who choose not to migrate to the upgraded network or defer migration may continue using
their existing CDMA devices on Allied's network until that time.238 According to AT&T, Allied prepaid
customers will continue to use their service at their current pricing plans once the transaction closes.239
AT&T also plans to provide prepaid customers incentives in the form of discounted devices and/or
bundles of free minutes to migrate more quickly.240 Moreover, AT&T says that, to the extent Allied
prepaid customers remain active on the CDMA network near the end of the transition period for each
market, it intends to make an attractive migration offer to incent those remaining customers to migrate
to the AT&T HSPA+ or LTE network.241 AT&T says the objective of these efforts is that, at the end of the
transition period for each market, no more than ten percent of the active Allied prepaid customers at
the date of closing will still need to be migrated.242
79.
According to AT&T, Allied's Lifeline customers will initially be able to continue to use
their phones as they do today.243 It is AT&T's intent to transition these customers to a comparable
postpaid plan, with a price substantially similar to their Allied Lifeline plan, while they are still supported
by Allied's network.244 Once transitioned, they will be treated as a postpaid customer for purposes of
customer migration and migrated to an equivalent postpaid plan, with a price substantially similar to the
customer's original Lifeline plan and with a comparable device pre-selected by AT&T at no charge.245
Lifeline customers will also be permitted to terminate service at any time with no early termination fee,
prior to migration, so that they may consider alternative Lifeline service providers.246 AT&T will attempt,
to the extent feasible, to provide customers with information about available Lifeline service providers
in the market.247
80.
As Allied postpaid customers are migrated to AT&T's network, AT&T asserts that most
will be provided the option of retaining their current plan.248 AT&T represents, however, that it reserves

238 Id.
239 AT&T Fifth Supplemental Response, September 18, 2013, at 2.
240 AT&T Third Supplemental Response, August 28, 2013, at 3-4.
241 AT&T Fifth Supplemental Response, September 18, 2013, at 2.
242 Id.
243 Id. at 3.
244 Id.
245 Id.
246 Id.
247 Id.
248 Id. at 2.
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the right to terminate plans that serve 150 customers or fewer and offer those customers a comparable
plan on migration.249

C.

Discussion

81.
We have reviewed the claims of the Applicants regarding the benefits they allege will
result from the proposed transaction, as well as their responses to our requests for additional
information and documents. Our review indicates that, given the particular facts of its unique "island
properties," Allied is facing significant limitations in providing its customers with advanced technology
service offerings.250 Moreover, the record provides general support for the Applicants' contentions that
the proposed transaction would in fact result in benefits for customers in the Allied service territories,
particularly with respect to the deployment of HSPA+ and LTE service offerings. As presented in this
record, however, these benefits are not sufficient by themselves to outweigh the likely competitive
problems we have found with respect to the proposed transaction.
82.
Our review of the record indicates that following the ALLTEL divestiture, Allied faced
certain network quality challenges.251 The competitive difficulties of its unusual footprint combined with
an explosion in data usage led to increased data roaming costs per subscriber252 and an increase in churn
because of service quality problems. As supported by the Applicants in the record, Allied's customers
have had a degraded customer experience at the many edges of Allied's service areas, including
dropped calls and signal loss.253 After reviewing all of the interrogatory responses and documents
submitted by the Applicants, we concluded that Allied suffers from numerous obstacles, such as access
to spectrum,254 network inefficiencies,255 higher per-subscriber costs,256 and higher than typical levels of
customer churn.257
83.
We conclude that the record supports a finding that Allied sought to operate a
successful wireless business in the subject markets,258 made substantial capital investments, and took

249 Id.
250 See para. 82 infra.
251 See ATN IR Response, June 19, 2013, at 9.
252 Id. at 20; ATN-000008512. Allied notes that [REDACTED]. ATN IR Response, June 19, 2013, at 20, 25-26,
35.
253 Public Interest Statement at 21. Allied explains that its subscribers on the edges of the network [REDACTED].
ATN IR Response, June 19, 2013, at 21, 28. See also ATN000008512 (stating that [REDACTED]).
254 ATN IR Response, June 19, 2013, at 41-42.
255 Id. at 20-23.
256 Id. at 39-40.
257 Id. at 21, 25-26.
258 Id. at 21, 27-31.
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numerous steps to mitigate or overcome the obstacles it faced, including the significant network quality
issues attendant on its "island properties."259 Since acquiring the divestiture markets in 2010, Allied has
made capital investments totaling approximately [REDACTED] in the CMAs involved in this
transaction.260 Further,

259 In an effort to improve service, Allied [REDACTED]. Id. at 10.
260 Id. at 7. For example, Allied spent approximately [REDACTED] constructing a total of [REDACTED] new
cell sites in its various service territories. Id. at 13, 14. Further, Allied invested approximately $[REDACTED]
million in steps to expand cell site capacity. Id. at 13.
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we agree that Allied attempted to implement various potential strategies to improve its competitive
positioning from 2010 to the present through spectrum purchases, joint ventures, and strategic roaming
agreements. However, despite considerable efforts, [REDACTED].261 Notwithstanding its investments
and its efforts to address the problems negatively affecting the customer experience of many of its
customers, its market share has declined markedly since 2010.262 We find that, despite its attempts to
find a solution, given the markets that it serves, Allied would be unlikely to be able to develop a network
capable of offering competitive advanced broadband services in the near future.263
84.
The Applicants emphasize in making their case as to why the proposed transaction is in
the public interest that effectuation of the proposed deal "will bring advanced broadband services to
more customers than Allied could cover economically on its own and at a much faster pace."264 AT&T
asserts that its experience, infrastructure, and supplier contracts will permit swift delivery of the
benefits of an enhanced mobile Internet experience.265 Given the lack of specificity and the information
we have about the extent of AT&T's current deployment of 4G technology in the overlap markets, we
are concerned about the timeliness with which AT&T will act to deploy 4G offerings in the areas to be
acquired from Allied. As a result, this claimed benefit holds only limited weight.
85.
As discussed above, the Applicants initially provided little in the way of detailed support
for their customer transition plans. In particular, AT&T represented that it has had experience
transitioning customers in previous transactions, many of which have been far larger and with far more
customers than is the case with the proposed transaction before us.266 The Applicants then asserted
that the Commission should recognize "the importance of such experience in ensuring the promised

261 ATN-000023469; ATN-000029184 (demonstrating Allied's attempts to [REDACTED].
262 Since June 2010, Allied's subscribers have declined from approximately [REDACTED] to approximately
[REDACTED] in December 2012, a loss of approximately [REDACTED]%. NRUF and LNP, June 2010,
December 2012.
263 Blue Wireless argues that a review of Allied's roaming expenses and subscribers demonstrates that the wireless
provider is thriving and does not support Allied's arguments that the increase in demand for mobile broadband has
had a deleterious effect on ATN's roaming costs and its ability to invest in its network and that it would be difficult
for Allied to survive absent the proposed transaction. Blue Wireless Aug. 15th Ex parte at 3. However, we note that
our conclusions here are not based on a finding that Allied is a "failing firm." In addition, our review of the record
indicates that the decrease in Allied's roaming expenses per subscriber in 2012 does not demonstrate that Allied's
wireless business is now thriving, but is primarily related to [REDACTED]. See Allied IR Response at 33;
ATN000036096.
264 Public Interest Statement at 7.
265 Id.
266 Id. at 9.
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benefits will be realized."267 As described above, AT&T has recently provided significantly more
information

267 Id.
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about the steps it plans to take to transition Allied's postpaid, prepaid, and Lifeline customers.268
Nonetheless, without the commitments AT&T is making regarding transition of Allied customers to the
AT&T network, we would be unable to find that AT&T's customer transition plans are sufficient under
our public interest review.
86.
Our evaluation of the claimed public interest benefits gives limited weight to many of
the benefits presented that would go to Allied's customers as a result of the proposed transaction, such
as their gaining access to expanded features and service offerings such as a more robust set of data
services, free access to 31,000 Wi-Fi hotspots for eligible subscribers, access to AT&T's nationwide
footprint when traveling,269 and wireline/wireless bundles in parts of 97 counties in 21 CMAs across five
clusters.270 These asserted benefits are already available to Allied customers in locations where AT&T is
already offering these services as a competitor to Allied.
87.
The Applicants assert that the transaction would expand network coverage in many
predominantly rural areas.271 However, we find, based on the record and our analysis of the data, that
there is already substantial geographical overlap between the networks of the two providers. This
claimed benefit accordingly is not particularly compelling.
88.
Our analysis of the cost savings that the Applicants contend the proposed transaction
would yield indicates that, although notable, they mostly are due to reductions in fixed costs. We
generally find that reductions in fixed cost are less cognizable than reductions in marginal costs because
the former are less likely to result in lower prices for consumers,272 making it difficult here to quantify
the magnitude of these asserted benefits.
89.
We find, based on the record before us and the Applicants' claims as discussed above,
that certain public interest benefits may potentially result from the proposed transaction. However,
using the sliding-scale approach, we are unable on the basis of this record to conclude that these public
interest benefits are sufficiently large to outweigh the potential public interest harms we have identified
in certain individual markets.

268 See AT&T IR Response, June 19, 2013, at 23-24; AT&T Third Supplemental Response, August 28, 2013, at 2-4;
AT&T Fifth Supplemental Response, September 18, 2013, at 2-3.
269 Public Interest Statement at 9.
270 These 97 counties comprise a population of 3.3 million (U.S. Census 2010) and [REDACTED] Allied
subscribers (December 2012 NRUF and LNP).
271 Public Interest Statement at 10.
272 See, e.g., Alaska Wireless Order, 87; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10735 97; AT&T-
Centennial Order
, 24 FCC Rcd at 13954 90.
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D.

Remedies

90.
The Commission's review of a proposed transaction entails a thorough examination of
the potential public interest harms and any verifiable, transaction-specific benefits, including any
voluntary commitments made by the Applicants to further the public interest. As part of this process,
the Commission may impose additional remedial conditions to address potential harms likely to result
from the proposed transaction or to help ensure the realization of any promised potential benefits.273 If,
on balance, after taking into consideration any voluntary commitments and additional remedial
conditions, the potential benefits associated with the proposed transaction outweigh any remaining
potential harms,
the Commission would find that the proposed transaction serves the public interest. We note that the
Commission has held that it will impose conditions only to remedy harms that arise from the transaction
(i.e., transaction-specific harms) and that are related to the Commission's responsibilities under the
Communications Act and related statutes.274
91.
As described above, under our sliding-scale approach we cannot conclude based on this
record that the potential benefits are sufficiently large, specific, and imminent to outweigh these
potential harms. In conjunction with recent filings supplementing the record on some key issues,
however, AT&T has made several voluntary commitments that, when coupled with the potential
benefits, allow us to find that the proposed transaction overall would be in the public interest. In
particular, AT&T filed a letter on September 18, 2013,275 in which it has voluntarily committed to
undertake an aggressive build-out schedule for upgraded networks in the Allied service areas that it is
acquiring through these transactions,276 as well as provided a roaming commitment that helps ensure a
reasonable transition for providers who have been relying on CDMA and Evolution Data Optimized ("EV-
DO") roaming through the Allied networks.277 Further, AT&T has provided certain commitments with
respect to customer transition and migration.278

273 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10739-40 111; AT&T-Verizon Wireless Order,
25 FCC Rcd at 8718 25; AT&T-Centennial Order, 24 FCC Rcd at 13929 30.
274 AT&T-Verizon Wireless Order, 25 FCC Rcd at 8747-48 101.
275 Letter from Joan Marsh, Vice President Federal Regulatory, AT&T, to Ruth Milkman, Chief, Wireless
Telecommunications Bureau, WT Docket No. 13-54 (filed Sept. 18, 2013) ("AT&T Commitment Letter").
276 See discussion 92-94 infra.
277 See discussion 95-96 infra.
278 See discussion 97-98 infra.
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1.

Network Deployment Commitments

92.
AT&T has committed to deploy 4G HSPA+ service at all current Allied cell sites that will
be integrated into the AT&T network within 15 months of the transaction closing.279 Similarly, AT&T has
committed, within 18 months of the transaction closing, to deploy 4G LTE service at all current Allied cell
sites that will be integrated into the AT&T network, and at which AT&T holds AWS-1 or Lower 700 MHz
Band B or C Block spectrum and where high speed backhaul service is currently available280 to AT&T.281
AT&T expects to deploy high speed broadband service at an additional ten percent of the integrated cell
sites within 36 months after the date of the transaction closing.282 Based on AT&T's anticipated
deployment schedule, AT&T estimates that 100 percent of the population covered in the Allied markets
will have access to HSPA+ services on AT&T's network within 15 months of closing.283 AT&T further
estimates that 75 percent of the population covered in the Allied markets will have access to LTE
services on AT&T's network within 18 months of closing and approximately 85 percent within 36 months
of closing.284
93.
We find that these commitments will lead to significant public interest benefits
regarding access to advanced broadband technologies by consumers in these service territories,
including customers of both Allied and AT&T. For instance, in the 30 markets subject to the proposed
transaction, we find that there would be an approximate 20 percent gain in HSPA+ population coverage,
and a 27 percent gain in HSPA+ land area coverage as a result of these commitments. In addition, we
estimate that the benefits in coverage are greater in the ten local markets in which we find harms are
likely with an approximate 33 percent gain in population coverage and a 39 percent in land area.285 As
one example, in Georgia, where we find harm likely in five of the markets, the gains from increased

279 AT&T Commitment Letter at 3.
280 AT&T notes that it has preliminarily identified a fiber Ethernet to the cell backhaul solution at approximately
70% of the Allied cell sites that will be integrated into the AT&T network. AT&T commits to work diligently to
identify backhaul solutions for sites currently lacking fiber backhaul availability and shall report to the Commission
on its progress in that regard in the progress reports that it will be periodically filing pursuant to its commitment
letter. AT&T Commitment Letter at 3.
281 AT&T Commitment Letter at 3. AT&T asserts that its ability to meet these commitments is, to a certain extent,
dependent on the actions of third parties. As a result, in the event AT&T, despite its commercially reasonable
efforts, is unable to deploy HSPA+ or LTE service at one or more cell sites because of its inability to obtain
necessary regulatory approvals, cell site access, field strength agreements to resolve interference concerns, or for
other good cause, AT&T seeks to preserve the opportunity to seek a waiver of this commitment as to the affected
cell sites. AT&T Commitment Letter at 3 n.3.
282 AT&T Commitment Letter at 3.
283 AT&T Fifth Supplemental Response, September 18, 2013, at 1.
284 Id.
285 The gains from increased HSPA+ and LTE coverage are estimated on a population weighted average basis,
utilizing Mosaik, July 2013, and 2010 U.S. Census data.
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HSPA+ coverage would encompass approximately 29 percent of the population and 53 percent of the
land area, and would result in 15 months in HSPA+ coverage of close to 100 percent of the population
and approximately 83 percent of the land area in these markets. Finally, we estimate that AT&T
currently covers only approximately 22 percent of the population of the Allied markets with LTE, so that
AT&T's estimated increase in LTE coverage to 75 percent of this population within 18 months would
more than triple its current LTE coverage, resulting in more than half of the population in these markets
receiving LTE coverage that they do not have today.
94.
Accordingly, we impose the commitments made by AT&T with respect to network
buildout as a condition of our consent to the proposed transaction. AT&T's commitments outlined
above will help to ensure that all consumers in the current Allied service territories will benefit from the
deployment of advanced 4G network technologies.
2.

Roaming Commitments

95.
AT&T has committed to offer CDMA voice and data roaming services, consistent with
applicable Commission rules, over Allied's 3G EV-DO network until at least June 15, 2015 (except at nine
sites in CMA 381 and CMA 384).286 AT&T commits to honoring the prices, terms, and conditions of the
roaming agreements that it is assuming from Allied.287 AT&T's commitment would apply only to
properties it is acquiring as a result of the transaction with Allied (except as otherwise excluded), and
does not apply to any properties that AT&T would not control upon consummation of the proposed
transaction.288 In the absence of this commitment, service providers that currently have or need CDMA
roaming services in the Allied service areas confront uncertainty about the ongoing availability of such
roaming services.
96.
We impose the commitment made by AT&T to continue to offer CDMA voice and data
roaming services over Allied's 3G EV-DO network until at least June 15, 2015, as a condition of our
consent to the proposed transaction. As a result of this commitment, wireless service providers will
retain the ability for their customers to roam pursuant to the Commission's roaming rules on the
existing Allied CDMA network. These same providers will have at least 18 months subsequent to the
closing of the proposed transaction to take the necessary steps to obtain alternative CDMA roaming
arrangements in the current Allied service areas, if that is what they choose to do. We find that AT&T's

286 AT&T Commitment Letter at 3. At these nine sites, Allied currently provides CDMA roaming service using
lease spectrum and does not otherwise hold spectrum in these two CMAs. AT&T is not acquiring these spectrum
leases and will not be providing CDMA roaming services at these nine sites after the closing. Id. at 3 n.1.
287 Id. at 3. AT&T states that this commitment on its part would not require it to modify the rates or other terms and
conditions of any CDMA roaming agreement it assumes from Allied. Id.
288 Id. In CMA 378, Allied service is provided through GA RSA #8 Partnership ("Partnership"), in which Allied
holds a 30% interest that it is transferring to AT&T. If AT&T acquires de facto control of the Partnership, then the
commitment will apply to the Partnership. Id. at 3 n.2.
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voluntary commitment to maintain the CDMA network for an additional period of time is in the public
interest.
3.

Customer Transition Commitments

97.
AT&T has made a number of commitments with respect to its plans for transition of the
existing Allied customers to the AT&T network. At such time as AT&T is ready to transition a postpaid
Allied customer to AT&T's network, AT&T indicates that it will offer the customer a handset comparable
to his or her existing handset, at no cost to the customer and without requiring a contract extension.289
AT&T plans to provide each such Allied customer with a list of comparable handsets from which they
may choose at no cost, as well as the option to purchase a different handset.290 AT&T represents that all
the devices it plans to offer Allied customers as comparable replacements for their CDMA devices will be
3G UMTS terrestrial radio access devices or better.291 The significance of this plan is that even if an
Allied customer currently has a 2G device, AT&T will provide a 3G or better device to that customer at
no cost to the customer.292 Finally, an Allied customer with a CDMA iPhone as of the date of the closing
will receive the same or a more recent iPhone model that works on AT&T's network without an
additional change and without having to change their existing rate plan.293
98.
We impose the commitments made by AT&T regarding the transition of the current
Allied subscribers to the AT&T network as a condition of our consent to the proposed transaction.
These commitments, along with the additional explanations of its customer transition plans provided by
AT&T,294 provide greater assurance that the transition from the existing CDMA network to AT&T's
network will be successful with minimal disruption to customers. At the same time, recognizing the
potential issues that might arise in this type of transition, we will carefully monitor AT&T's
implementation of these commitments and its announced transition plans.
4.

Progress Reports

99.
AT&T has committed that it will file quarterly reports with the Commission for a period
of three years following the date on which the transaction closes for purposes of reporting on the status
of its implementation of these commitments.295 Among other things, these quarterly reports will

289 Id. at 3-4.
290 Id. at 4. Each Allied customer who chooses a device from the provided list will receive a new device. Id.
291 Id.
292 Id.
293 Id. As is the case with all Alled customers, customers with iPhones will have the option to upgrade their device
and adopt an AT&T rate plan that is compatible with the upgraded device. Id.
294 See AT&T Third Supplemental Response, August 28, 2013, at 1-4; AT&T Fifth Supplemental Response,
September 18, 2013, at 2-3.
295 AT&T Commitment Letter at 4.
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include a discussion of the efforts undertaken by AT&T to migrate prepaid customers and the status of
such migration.296 If the network deployment commitments are not met within the three-year reporting
period, this reporting requirement, with respect to those deployment commitments, will be extended
until such time that these commitments have been fully satisfied or have been waived by the
Commission.297 We will condition consent to the proposed transaction on AT&T complying with this
quarterly reporting obligation. AT&T's submission of these reports will allow Commission staff to
monitor the progress of AT&T's efforts.298

VII.

BALANCING THE PUBLIC INTEREST BENEFITS AND THE HARMS

100.
In considering the Applications, we find that the proposed transaction results in some
probable competitive harm, and that under our sliding-scale approach, we cannot conclude that the
potential public interest benefits will outweigh these public interest harms. However, when we consider
AT&T's voluntary commitments in the areas of roaming, network deployment, and customer transition
in conjunction with certain public interest benefits, our competitive concerns will likely be mitigated.

VIII.

CONCLUSION

101.
For the reasons stated above, we find that the proposed transaction is overall in the
public interest, and accordingly, we approve it.

IX.

ORDERING CLAUSES

102.
ACCORDINGLY, having reviewed the Applications and the record in these matters, IT IS
ORDERED that, pursuant to Sections 4(i) and (j), 214, 303(r), 309, and 310(d) of the Communications Act
of 1934, as amended, 47 U.S.C. 154(i), 154(j), 214, 303(r), 309, 310(d), the applications for the
transfer of control of and assignment of cellular, PCS, Lower 700 MHz Band B and C Block, and common
carrier fixed point-to-point microwave licenses, spectrum leasing authorizations, and an international

296 AT&T Fifth Supplemental Response, September 18, 2013, at 3.
297 AT&T Commitment Letter at 4.
298 Allied was a winning bidder in the Mobility Fund Phase I auction (Auction 901) and was authorized to receive
$45,853,493.28 in Mobility Fund Phase I support, secured by letters of credit. Pursuant to the Commission's rules, a
winning bidder in Auction 901 that is authorized to receive Mobility Fund Phase I support will be subject to
repayment of the support disbursed together with an additional performance default payment of ten percent on the
total level of support for which the winning bidder is eligible if it fails or is unable to meet its minimum coverage or
service requirements or fails to fulfill any term or condition of Mobility Fund Phase I support. Upon consummation
of this Transaction, Allied will no longer satisfy the spectrum access requirements necessary to receive Mobility
Fund Phase I support and Allied will be subject to the ten percent default payment in the amount of $4,585,349.34.
In accordance with the September 18, 2013 letter submitted by ATN and Allied, Allied will satisfy its performance
default payment obligation on or before consummation of the Transaction. See Letter from Leonard Q. Slap, Senior
Vice President, General Counsel and Secretary, Atlantic Tele-Network, Inc., and Secretary, Allied Wireless
Communications Corporation, to Ruth Milkman, Chief, Wireless Telecommunications Bureau, WT Docket 13-54
(Sept. 18, 2013). If Allied fails to satisfy this default payment on or before consummation, the Commission will,
consistent with its rules, proceed to draw upon Allied's letters of credit.
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section 214 authorization are GRANTED to the extent specified in this Memorandum Opinion and Order
and subject to the conditions specified herein.
103.
IT IS FURTHER ORDERED that the above grant shall include authority for the transfer or
assignment of any applications regarding the Allied assets that are pending at the time of consummation
as well as any licenses or authorizations that may have inadvertently been omitted from the application
forms filed by the Applicants.
104.
IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 309, and 310(d) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), (j), 309, and 310(d), the petitions to deny
the Applications filed by Buffalo-Lake Erie Wireless Systems Co., L.L.C. and Public Knowledge, and The
Writers Guild of America, West are DENIED for the reasons stated herein.
105.
IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 309, and 310(d) of the
Communications Act of 1934, as amended, 154(i), (j), 309, and 310(d), the request for conditions in
the Petitions or Comments filed by Buffalo-Lake Erie Wireless Systems Co., L.L.C., Public Knowledge and
The Writers Guild of America, West, and the Rural Telecommunications Group, Inc. are DENIED for the
reasons stated herein
106.
IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 309, and 310(d) of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), (j), 309, and 310(d), the request for
consolidation in the Statement filed by Maneesh Pangasa is DENIED for the reasons stated herein.
107.
IT IS FURTHER ORDERED that this Order SHALL BE EFFECTIVE upon release. Petitions for
reconsideration under section 1.106 of the Commission's rules, 47 C.F.R. 1.106, may be filed within
thirty days of the date of release of this Memorandum Opinion and Order.
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108.
This action is taken under delegated authority pursuant to sections 0.51, 0.131, 0.261,
and 0.331 of the Commission's Rules, 47 C.F.R. 0.51, 0.131, 0.261, and 0.331.
FEDERAL COMMUNICATIONS COMMISSION
Ruth Milkman
Chief
Wireless Telecommunications Bureau
Mindel De La Torre
Chief
International Bureau
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APPENDIX A

Commenters in WT Docket No. 13-54

Petitions To Deny and Comments:

Buffalo-Lake Erie Wireless Systems Co., L.L.C. ("Blue Wireless") (Petition To Deny)
Public Knowledge and The Writers Guild of America, West (Petition To Deny)
Rural Telecommunications Group, Inc. (Comment)

Opposition:

AT&T Inc. and Atlantic Tele-Network, Inc. (Joint Opposition)

Replies:

Buffalo-Lake Erie Wireless Systems Co., L.L.C
Rural Telecommunications Group, Inc.
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APPENDIX B

AT&T Commitment Letter

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61

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