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AT&T/Leap Transaction Order

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Released: March 13, 2014

Federal Communications Commission

DA 14-349

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Applications of Cricket License Company, LLC,
)
WT Docket No. 13-193
et al., Leap Wireless International, Inc., and
)
AT&T Inc. for Consent To Transfer Control of
)
Authorizations
)
)

Application of Cricket License Company, LLC
)
and Leap Licenseco Inc. for Consent to
)
Assignment of Authorization
)

MEMORANDUM OPINION AND ORDER

Adopted: March 13, 2014

Released: March 13, 2014
By the Acting Chief, Wireless Telecommunications Bureau, and Chief, International Bureau:

TABLE OF CONTENTS

Heading
Paragraph #
I. INTRODUCTION.................................................................................................................................. 1
II. BACKGROUND.................................................................................................................................... 5
A. Description of the Applicants .......................................................................................................... 5
1. AT&T ........................................................................................................................................ 5
2. Leap Wireless............................................................................................................................ 6
B. Description of the Transaction......................................................................................................... 7
C. Transaction Review Process .......................................................................................................... 11
III. STANDARD OF REVIEW.................................................................................................................. 13
IV. QUALIFICATIONS OF APPLICANTS ............................................................................................. 17
V. POTENTIAL PUBLIC INTEREST HARMS...................................................................................... 20
A. Competitive Overview and Market Definitions............................................................................. 21
1. Competitive Overview ............................................................................................................ 21
2. Market Definitions .................................................................................................................. 22
B. Competitive Effects of the Proposed Transaction.......................................................................... 38
1. Initial Screen............................................................................................................................ 41
2. Competitive Analysis .............................................................................................................. 49
a. General Arguments Regarding Loss of Leap as an Independent Facilities-Based
Provider............................................................................................................................. 51
(i) Record ........................................................................................................................ 51
(ii) Discussion .................................................................................................................. 66
b. Market-by-Market Analysis.............................................................................................. 75
(i) San Diego and the California Central Valley............................................................. 77
(ii) South Texas Markets.................................................................................................. 84
(iii) Other Markets............................................................................................................. 99
3. Roaming ................................................................................................................................ 103

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C. Other Issues.................................................................................................................................. 109
VI. POTENTIAL PUBLIC INTEREST BENEFITS ............................................................................... 130
A. Analytical Framework ................................................................................................................. 131
B. Potential Benefits......................................................................................................................... 133
C. Discussion.................................................................................................................................... 144
VII.REMEDIES ........................................................................................................................................ 155
A. Introduction.................................................................................................................................. 155
B. Spectrum Divestitures.................................................................................................................. 161
C. Spectrum Deployment Commitments.......................................................................................... 164
D. LTE Network Deployment in South Texas.................................................................................. 166
E. Rate Plan Commitments .............................................................................................................. 168
F. Feature Phone Trade-In Program, iPhone SIM Card Replacement Program, and Device
Trade-In Credits Program ............................................................................................................ 172
G. Roaming Commitments ............................................................................................................... 178
H. Flat Wireless Commitments......................................................................................................... 183
I. Progress Reports .......................................................................................................................... 186
VIII.BALANCING THE PUBLIC INTEREST BENEFITS AND THE HARMS .................................. 188
IX. ORDERING CLAUSES................................................................................................................... 190
APPENDIX A – List of Applications
APPENDIX B – List of Filings
APPENDIX C – Markets Identified by the Initial Screen
APPENDIX D – Spectrum Divestitures by AT&T

I.

INTRODUCTION

1.
In this Memorandum Opinion and Order, we approve, subject to conditions, the
applications of AT&T Inc. (“AT&T”) and Leap Wireless International, Inc. (“Leap”) (together, the
“Applicants”) for Commission consent to the transfer of control of, and assignment of, a number of AWS-
1, PCS, and associated microwave licenses and international section 214 authorizations from Leap’s
subsidiaries, Cricket License Company, LLC and STX Wireless License, LLC, to AT&T.
2.
As a result of the proposed transaction, approximately 4.6 million customers, as well as
spectrum, network equipment, and other assets, will be transferred from Leap to AT&T. Based on our
analysis, we find that the proposed transaction has the potential to cause some competitive and other
public interest harms in several local markets, as well as to value-conscious consumers. The possibility of
public interest harms resulting from the proposed transaction would likely be counterbalanced to some
degree by certain claimed public interest benefits. Even taking into consideration those benefits,
however, we remain concerned about the potential for the proposed transaction to result in certain public
interest harms.
3.
AT&T has made certain voluntary commitments, however, that will ameliorate the
potential public interest harms and that will help to ensure the achievement of the asserted public interest
benefits. Those commitments include spectrum divestitures in certain markets, which will help ensure
that AT&T’s competitors have access to spectrum. AT&T has also made commitments to deploy LTE
service using unused Leap spectrum within 90 days or 12 months of closing, which will ensure that that
spectrum is being deployed and that consumers in the current Leap service areas will benefit from
network improvements to AT&T’s advanced 4G network technologies. AT&T has also made
commitments to build out LTE service in six specific markets in south Texas within 18 months, which
will ensure that consumers in those markets have access to advanced 4G services. In addition, AT&T has
committed to offer certain rate plans targeted to help value-conscious and Lifeline customers. AT&T also
has agreed to offer a device trade-in credit program and a feature phone device trade-in program to certain
Leap customers prior to discontinuing CDMA service in a particular area in order to ensure that Leap
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customers have future access to wireless service. The commitments providing for spectrum divestitures,
the deployment of unused spectrum, the build out of LTE service, rate plans, and customer migration will
all apply to south Texas markets. They will ameliorate the potential harms and ensure public interest
benefits in those markets by, among other things, ensuring that AT&T has every incentive to provide
higher quality service, and minimizing customer dislocations that might result from the proposed
transaction. In addition, in order to ensure that CDMA roaming services remain available while AT&T
transitions Leap’s CDMA network, AT&T has made a commitment to honor existing CDMA roaming
agreements that AT&T is assuming from Leap so long as it operates the CDMA network. Finally, AT&T
has offered a commitment to dispose of Leap’s interests in a competitive wireless telecommunications
provider if they are not sold prior to closing as well as certain other commitments to protect against
possible anticompetitive effects before those interests are sold.
4.
Based on our review of the record and in light of these commitments, which become
conditions to our approval, we find that the public interest benefits of the proposed transaction outweigh
the likelihood of significant public interest harms, such that overall, the proposed transaction is in the
public interest.

II.

BACKGROUND

A.

Description of the Applicants

1.

AT&T

5.
AT&T, headquartered in Dallas, Texas, is a communications holding company that ranks
among the leading providers of telecommunications services in the United States.1 As of December 31,
2013, AT&T reported 110 million wireless subscribers, and approximately $70 billion in wireless service
revenues, which accounted for approximately 54 percent of total revenues.2 AT&T’s nationwide wireless
network currently covers approximately 308 million people, or 99.9 percent of the population of the
mainland United States.3 AT&T reports that it covers all major metropolitan areas and nearly 280 million
people with its fourth generation Long Term Evolution (“LTE”) mobile technology, and the company
expects to cover 300 million people by the summer of 2014.4 In May of 2013, AT&T announced the
creation of Aio Wireless, a subsidiary of AT&T offering prepaid wireless service “to value-conscious
customers interested in an unlimited talk/text/data plan with no annual contract.”5 Aio Wireless service is
currently available nationwide to customers who order online, although Aio Wireless only has dealers in a
limited number of markets.6

1 See AT&T Inc., SEC Form 10-K, at 1 (filed Feb. 21, 2014) (“AT&T 10-K”), available
athttp://www.sec.gov/Archives/edgar/data/732717/000073271714000010/0000732717-14-000010-index.htm.
2 See AT&T Inc. 2013 Annual Report, Ex. 13 (filed Feb. 21, 2014), at 1, 5, available
athttp://www.sec.gov/Archives/edgar/data/732717/000073271714000010/ex13.htm.
3 Of the 308 million people covered by its wireless network, AT&T covers 304.9 million people with 3G, 299.4
million people with High Speed Packet Access+ (“HSPA+”), and 266.8 million people with LTE. Mosaik Solutions
Data (“Mosaik”), January 2014.
4 See AT&T 10-K at 2.
5 See Aio Wireless™ Announces New Nationwide Voice and Data Service (May 9, 2013), available at
http://www.att.com/gen/press-room?pid=24185&cdvn=news&newsarticleid=36421&mapcode= (last visited Feb.
20, 2014).
6 See Aio Wireless™ Available Soon for All U.S. Customers (Aug. 29, 2013), available at
http://www.att.com/gen/press-
(continued….)
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2.

Leap Wireless

6.
Leap, headquartered in San Diego, California, provides wireless services in the United
States under the Cricket brand.7 For the fiscal year 2013, Leap reported approximately $2.90 billion in
revenues.8 As of December 31, 2013, Leap had approximately 4.6 million customers.9 As of the same
date, Leap held licenses covering approximately 137 million people, of whom approximately 97 million
are covered by Leap’s network footprint.10 The Applicants contend that Leap is not a nationwide
facilities-based provider and has no current plans to become one; it has attempted to expand its retail
footprint through a 3G Mobile Virtual Network Operator (“MVNO”) arrangement, but has attracted a
relatively small number of customers.11

B.

Description of the Transaction

7.
On August 1, 2013, AT&T and Leap filed the Applications12 pursuant to sections 214 and
310(d) of the Communications Act of 1934, as amended (the “Communications Act”), seeking
Commission consent to the transfer of control of, and assignment of, a number of principally AWS-1,
PCS, and associated microwave licenses and international section 214 authorizations. The Applications
are part of AT&T’s agreement to acquire Leap in an all-cash transaction.13 The total cash consideration is
$15 per share and expected to be approximately $1.3 billion, and AT&T would acquire all of Leap’s
outstanding indebtedness.14 Leap had a net debt of approximately $2.7 billion as of June 30, 2013.15
Leap will become a wholly-owned subsidiary of AT&T.16
8.
In the proposed transaction, AT&T is proposing to acquire 10 to 50 megahertz of
spectrum in 1,354 counties in 356 Cellular Market Areas nationwide.17 Post-transaction, in markets in
(Continued from previous page)
room?pid=24753&cdvn=news&newsarticleid=36953&mapcode=consumer%7Cfinancial (last visited Feb. 20,
2014).
7 Lead Application, Exhibit 1, Description of Transaction, Public Interest Showing and Related Demonstrations at 1
(“Public Interest Statement”).
8 See Leap Wireless International, Inc., LLC, SEC Form 10-K, at 43 (filed Mar. 6, 2014) (“Leap 10-K”), available at
http://www.sec.gov/Archives/edgar/data/1065049/000106504914000003/leap-december2013q4x10k.htm (last
visited Mar. 10, 2014).
9 See Leap 10-K at 4.
10 See Public Interest Statement at 1.
11 See id. at 10-11.
12 A list of the Applications is contained in Appendix A.
13 See Public Interest Statement at 2.
14 See id.
15 See id.
16 See Public Interest Statement at 2. AT&T’s agreement with Leap requires Leap to dispose of its ownership
interest in PR Wireless, LLC. Id. at 2 n. 7. On March 5, 2014, PR Wireless repurchased all of the interests in PR
Wireless that were held by Cricket Communications, Inc. See Letter from James H. Barker, Esq. and Elizabeth R.
Park, Esq., counsel for Leap Wireless International, Inc. and Cricket Communications, Inc. to Marlene H. Dortch,
Secretary, Federal Communications Commission, WT Docket No. 13-193 (filed Mar. 7, 2014).
17 See 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-
(continued….)
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DA 14-349

which there is geographical overlap, the merged entity would hold 46 to 180 megahertz of spectrum
covering approximately 137 million people, or approximately 44 percent of the population of the
continental United States.18 Leap covers approximately 31 percent of the population nationwide with its
network footprint; 100 percent of this population is also covered by AT&T.19 The Applicants assert that
the proposed transaction would combine AT&T’s nationwide network with Leap’s prepaid/no-contract
business to the benefit of consumers seeking a high-quality, competitively-priced prepaid wireless
experience.20 Further, according to the Applicants, the transaction will result in an improved network
experience for customers of both companies.21 The Applicants also contend AT&T can make use of
Leap’s PCS and AWS-1 spectrum more efficiently to enhance AT&T’s LTE deployment.22 The
Applicants contend as well that the transaction will result in substantial operating synergies and
substantial savings in roaming and resale expenses because the combined company will offer a
significantly greater on-net footprint and expanded coverage compared to Leap’s current network.23
9.
In addition to cash, Leap’s shareholders will each receive a contingent value right
(“CVR”), that will entitle them to net proceeds received from the sale of Leap’s Lower 700 MHz A Block
license in Chicago (the “Chicago License”).24 Leap Licenseco, a subsidiary of AT&T, will become the
licensee for the Chicago License.25 According to the Applicants, however, Laser, Inc. (“Laser”), a newly
formed indirect, wholly-owned subsidiary of AT&T, will serve as the stockholders’ representative and
will exercise de facto control over the Chicago License.26 The stockholders’ representative will have the
power to make all decisions and to act on behalf of and as agent for the CVR holders, including the
authority to conduct a sale process with respect to the Chicago License for the benefit of the former Leap
shareholders.27 If the stockholders’ representative fails to enter into an agreement to sell the Chicago
License within two years after the closing of the AT&T/Leap transaction (or if an agreement has been
entered into, but the Chicago License has not been sold by the third anniversary of the closing of the
AT&T/Leap transaction), then AT&T will have the right to sell the license, and the net proceeds will go
to the former Leap shareholders.28
(Continued from previous page)
To-Point Microwave Licenses, and International 214 Authorizations, and the Assignment of One 700 MHz License,
WT Docket No. 13-193, Public Notice, 28 FCC Rcd 12776, 12777 (WTB IB 2013) (“Accepted for Filing PN”).
18 See id.
19 See Mosaik, January 2014.
20 See Public Interest Statement at 7-13.
21 See id. at 13.
22 See id. at 13-17.
23 See id. at 19-20.
24 See Public Interest Statement at 3.
25 See id.
26 See id.
27 See id. In addition, as part of the stockholders’ representative’s responsibility for maintaining the Chicago
License, Laser will have the authority to enter into a consensual arrangement to address the technical issues relating
to the digital television protection criteria applicable to the Channel 51 broadcast station signal adjacent to the
Chicago License. Id.
28 See Public Interest Statement at 3.
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10.
Cricket Communications, Inc. (“CCI”), a subsidiary of Leap, has been a minority owner
of Flat Wireless, LLC (“Flat”), since 2010.29 Flat is a regional wireless telecommunications provider that
operates in Texas, Colorado, Arizona, and California.30 CCI currently holds [

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CONFIDENTIAL INFORMATION

].31 In its Public Interest Statement, the Applicants represented that
Leap was contractually committed to dispose of its interest in Flat prior to closing on the proposed
transaction.32 AT&T, however, has recently informed the Commission that it has agreed to waive that
condition prior to consummation of this transaction.33 There is a dispute between CCI and Flat about the
ability of CCI to dispose of its membership interests in Flat.34 An arbitrator has stayed the disposition of
CCI’s interests in Flat pending resolution of the arbitration.35

C.

Transaction Review Process

11.
On August 1, 2013, the Applicants filed the Applications. On August 20, 2013, the
Applicants amended the Applications to make a supplemental filing providing additional information
requested by staff.36 On August 28, 2013, the Commission released a public notice announcing
acceptance of the Applications for filing and establishing a pleading cycle, with petitions to deny due
September 27, 2013, oppositions due October 7, 2013, and replies due October 15, 2013.37 Due to the
government shutdown, the pleading schedule was revised; oppositions were due October 23, 2013, and
replies were due October 31, 2013.38 In response to the Comment Public Notice, the Commission
received eight petitions and one comment, a Joint Opposition from the Applicants, and seven replies.39

29 See Letter from Donald J. Evans, Esq., counsel for Flat Wireless, LLC to Marlene H. Dortch, Secretary, Federal
Communications Commission, WT Docket No. 13-193, at 1 (filed Jan. 6, 2014) (“Jan. 6, 2014 Flat Wireless Ex
Parte
”).
30 Jan. 6, 2014 Flat Wireless Ex Parte at 1.
31 See id. Leap responds that “Cricket has irrevocably and forever waived” its interest in those warrants. See Letter
from James H. Barker, Esq. and Alexander Maltas, Esq., counsel for Leap Wireless International, Inc. to Marlene H.
Dortch, Secretary, Federal Communications Commission, WT Docket No. 13-193, at 2-3 (filed Jan. 16, 2014)
(“Leap January 16, 2014 Ex Parte”).
32 See Public Interest Statement at 2 n.7.
33 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 2 (updated Mar. 11, 2014).
34 Jan. 6, 2014 Flat Wireless Ex Parte at 2. See also Leap January 16 Ex Parte at 2.
35 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 2.
36 Applications, Letter from William E. Cook, Jr., Esq., counsel for AT&T and James H. Barker, Esq., counsel for
Leap Wireless International, Inc. to Marlene H. Dortch, Secretary, Federal Communications Commission (filed Aug.
20, 2013) (“Aug. 20, 2013 Applicants Supplemental Response”).
37 Accepted for Filing PN.
38 Revised Filing Deadlines Following Resumption Of Normal Commission Operations, Public Notice, 28 FCC Rcd
14091, 14092 (CGB EB IB MB PS&HSB WTB WCB OET OGC OMD 2013).
39 A list of filings in this proceeding is contained in Appendix B. On November 4, 2013, The Greenlining Institute
reported that, based on discussions it had with AT&T, it no longer opposed the Applications, so long as there was no
material change in the transaction, and subject to the following conditions: (1) Cricket will remain an ETC in
California and will continue to offer the federal Lifeline discount to existing and new Lifeline-eligible customers
who reside in the geographic area served by Cricket's facilities-based CDMA network at merger closing for a period
of eighteen months after merger close; (2) In any application to relinquish Cricket's ETC status in California, the
(continued….)
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We address issues raised in these filings below.40
12.
On August 29, 2013, the Wireless Telecommunications Bureau (“WTB” or “the 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.41 Also, on November 8, 2013, pursuant to section 308(b) of the
Communications Act, the Bureau requested additional information and documents from AT&T and
Leap.42 The Bureau also released protective orders to ensure that any confidential or proprietary
documents submitted to the Commission would be adequately protected from public disclosure, and to
announce the process by which interested parties could gain access to confidential information filed in the
record.43

III.

STANDARD OF REVIEW

13.
Pursuant to sections 214(a) and 310(d) of the Act,44 we must determine whether the
Applicants have demonstrated that the proposed transfer of control of licenses and authorizations will
serve the public interest, convenience, and necessity. In making this determination, we first assess
whether the proposed transaction complies with the specific provisions of the Act,45 other applicable
(Continued from previous page)
effective date will be no earlier than eighteen months after merger close; and (3) Every six months, AT&T
California executives, including AT&T California President Ken McNeely, will meet with Greenlining's Executive
Director, Orson Aguilar, and members of the Greenlining Coalition. At these meetings, AT&T California will
provide updates on AT&T's commitments. These meetings will occur for a period of at least eighteen months after
merger close. Based upon those representations, Greenlining no longer opposes the transaction. See Letter from
Orson Aguilar, Executive Director, The Greenlining Institute to Marlene H. Dortch, Secretary, Federal
Communications Commission (filed Nov. 4, 2013).
40 As a preliminary matter, Maneesh Pangasa urged the Commission to combine its review of the AT&T/ATN
transaction and this proposed transaction. That request is now moot. See Maneesh Pangasa Statement for the
Record (filed Sep. 9, 2013).
41 See Applications of AT&T, Leap Wireless International, Inc., Cricket License Company, LLC, and Leap
Licenseco, Inc. For Consent to Transfer Control And Assign Licenses and Authorizations, Numbering Resource
Utilization and Forecast Reports and Local Number Portability Reports to Be Placed Into the Record, Subject to
Protective Order, WT Docket No. 13-193, Public Notice, 28 FCC Rcd 12821 (WTB 2013); Applications of AT&T,
Leap Wireless International., Inc., Cricket License Company, LLC, And Leap Licenseco, Inc. For Consent to
Transfer Control and Assign Licenses and Authorizations, WT Docket No. 13-193, Protective Order, 28 FCC Rcd
12810 (WTB 2013).
42 See Letter from Jim Schlichting, Acting Chief, Wireless Telecommunications Bureau to Michael P. Goggin,
AT&T Inc., WT Docket No. 13-193 (rel. Nov. 8, 2013); Letter from Jim Schlichting, Acting Chief, Wireless
Telecommunications Bureau to Robert D. Irving, Jr., Leap Wireless International, Inc., WT Docket No. 13-193 (rel.
Nov. 8, 2013)
43 See Applications of AT&T., Leap Wireless International, Inc., Cricket License Company, LLC, and Leap
Licenseco, Inc. For Consent to Transfer Control and Assign Licenses and Authorizations, WT Docket No. 13-193,
Protective Order, 28 FCC Rcd 11796 (WTB 2013); Applications of AT&T., Leap Wireless International, Inc.,
Cricket License Company, LLC, and Leap Licenseco, Inc. For Consent to Transfer Control and Assign Licenses and
Authorizations, WT Docket No. 13-193, Second Protective Order, 28 FCC Rcd 11803 (WTB 2013); AT&T-Leap,
Revised Appendix A to the Second Level Protective Order, WT Docket No. 13-193, 28 FCC Rcd 15860 (WTB
2013).
44 47 U.S.C. §§ 214(a), 310(d).
45 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 Sprint Nextel Corp. and SoftBank
(continued….)
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statutes, and the Commission’s rules, including whether the applicants are qualified to hold licenses. 46 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 or implementation of the Act
or related statutes.47 We then employ a balancing test weighing any potential public interest harms of the
proposed transaction against any potential public interest benefits.48 The Applicants bear the burden of
proving, by a preponderance of the evidence, that the proposed transaction, on balance, will serve the
public interest.49
14.
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. 50
Our public interest analysis also entails assessing whether the proposed transaction will affect the quality
of communications services or result in the provision of new or additional services to consumers.51 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.52
15.
Our competitive analysis, which forms an important part of the public interest evaluation,
is informed by, but not limited to, traditional antitrust principles.53 The Commission and the Department
of Justice (“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.54 Like
the DOJ, the Commission considers how a transaction will affect competition by defining a relevant
(Continued from previous page)
Corp. and Starburst II, Inc. for Consent to Transfer Control of Licenses and Authorizations, 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 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”).
46 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9650, ¶ 23; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd
at 10710, ¶ 28; 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, 17598-99 ¶ 23 (2011) (“AT&T-Qualcomm
Order
”).
47 See id.
48 See id.
49 See id.
50 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9651, ¶ 24; AT&T-Qualcomm Order, 26 FCC Rcd at 17603, ¶
32, n.96.
51 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9651, ¶ 24; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10752, ¶ 143.
52 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9651, ¶ 24; AT&T-Qualcomm Order, 26 FCC Rcd at 17599, ¶
24.
53 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9651, ¶ 25; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10710, ¶ 29.
54 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 25; AT&T-Qualcomm Order, 26 FCC Rcd at 17599-600 ¶
25; 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, 8717 ¶ 24 (2010) (“AT&T-Verizon Wireless Order”).
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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.55 The DOJ, however,
reviews telecommunications mergers pursuant to section 7 of the Clayton Act, and if it sues to enjoin a
merger, it must demonstrate to a court that the merger may substantially lessen competition or tend to
create a monopoly.56 The DOJ review is also limited solely to an examination of the competitive effects
of the acquisition, without reference to diversity, localism, or other public interest considerations.57 The
Commission’s competitive analysis under the public interest standard is somewhat broader, for example,
considering 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 markets.58
If we are unable to find that the proposed transaction serves the public interest for any reason or if the
record presents a substantial and material question of fact, we must designate the application(s) for
hearing.59
16.
Finally, our analysis recognizes that a proposed transaction may lead to both beneficial
and harmful consequences.60 For instance, combining assets may allow a firm to reduce transaction costs
and offer new products, but it may also create market power, create or enhance barriers to entry by
potential competitors, and create opportunities to disadvantage rivals in anticompetitive ways.61 Our
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.62 Section

55 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9652, ¶ 25; 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, 17462 ¶ 28 (2008) (“Verizon Wireless-ALLTEL Order”).
56 15 U.S.C. § 18.
57 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 25; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17462 ¶ 28.
58 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 25; AT&T-Qualcomm Order, 26 FCC Rcd at 17599 ¶ 25.
59 47 U.S.C. § 309(e); see also SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 25; News Corp. and DIRECTV
Group, Inc., Transferors, and Liberty Media Corp., Transferee, for Authority to Transfer Control, MB Docket No.
07-18, Memorandum Opinion and Order, 23 FCC Rcd 3265, 3277 ¶ 22 (2008); Applications of EchoStar
Communications Corp., General Motors Corp. and Hughes Electronics Corp., and EchoStar Communications Corp.,
CS Docket No. 01-348, Hearing Designation Order, 17 FCC Rcd 20559, 20574 ¶ 25 (2002).
60 See, e.g., AT&T-Qualcomm Order, 26 FCC Rcd at 17600 ¶ 26; Applications of Comcast Corporation, General
Electric Company, and NBC Universal, Inc. for Consent to Assign Licenses and Transfer Control of Licensees, MB
Docket No. 10-56, Memorandum Opinion and Order, 26 FCC Rcd 4238, 4249 ¶ 25 (2011) (“Comcast-NBCU
Order
”); Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 29; see also Verizon Wireless-SpectrumCo
Order
, 27 FCC Rcd at 10711 ¶ 30.
61 See, e.g., Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 29.
62 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 25; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10711 ¶ 30; Comcast-NBCU Order, 26 FCC Rcd at 4249 ¶ 25; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17462 ¶ 29; Applications of AT&T Wireless Services, Inc. and Cingular Wireless Corp. for Consent to Transfer
Control of Licenses and Authorizations, WT Docket No. 04-70, Memorandum Opinion and Order, 19 FCC Rcd
21522, 21545, ¶ 43 (2004) (“Cingular-AT&T Wireless Order”) (conditioning approval on the divestiture of
operating units in select markets). See also Application of WorldCom, Inc. and MCI Communications Corporation
for Transfer of Control of MCI Communications Corporation to WorldCom, Inc., CC Docket No. 97-211,
Memorandum Opinion and Order, 13 FCC Rcd 18025, 18115 ¶ 156 (conditioning approval on the divestiture of
MCI’s Internet assets); Applications of VoiceStream Wireless Corporation, PowerTel, Inc., Transferors, and
(continued….)
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303(r) of the Communications Act authorizes the Commission to prescribe restrictions or conditions not
inconsistent with law that may be necessary to carry out the provisions of the Act.63 Similarly, section
214(c) of the Act authorizes the Commission to attach to the certificate “such terms and conditions as in
its judgment the public convenience and necessity may require.”64 Indeed, unlike the role of antitrust
enforcement agencies, our public interest authority enables us to rely upon our extensive regulatory and
enforcement experience to impose and enforce conditions to ensure that the transaction will yield overall
public interest benefits.65 In exercising this broad authority, the Commission generally has imposed
conditions to confirm specific benefits or remedy specific harms likely to arise from transactions and that
are related to the Commission’s responsibilities under the Act and related statutes.66

IV.

QUALIFICATIONS OF APPLICANTS

17.
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.”67 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
qualifications requirements to hold and transfer licenses under section 310(d) and the Commission’s
rules.68
18.
Discussion. As an initial matter, we note that no parties have raised issues with respect to
the basic qualifications of Leap. The Commission generally does not reevaluate the qualifications of
(Continued from previous page)
Deutsche Telekom AG, Transferee, IB Docket No. 00-187, Memorandum Opinion and Order, 16 FCC Rcd 9779
(2001) (conditioning approval on compliance with agreement with Department of Justice and Federal Bureau of
Investigation addressing national security, law enforcement, and public safety concerns).
63 47 U.S.C. § 303(r). See also SoftBank-Sprint Order, 28 FCC Rcd at 9652, ¶ 25; Verizon Wireless-SpectrumCo
Order
, 27 FCC Rcd at 10711 ¶ 30; AT&T-Qualcomm Order, 26 FCC Rcd at 17600 ¶ 26; Comcast-NBCU Order, 26
FCC Rcd at 4249 ¶ 25; FCC v. Nat’l Citizens Comm. for Broadcasting, 436 U.S. 775 (1978) (upholding broadcast-
newspaper cross-ownership rules adopted pursuant to section 303(r)); United States v. Southwestern Cable Co., 392
U.S. 157, 178 (1968) (section 303(r) powers permit Commission to order cable company not to carry broadcast
signal beyond station’s primary market); United Video, Inc. v. FCC, 890 F.2d 1173, 1182-83 (D.C. Cir. 1989)
(syndicated exclusivity rules adopted pursuant to section 303(r) authority).
64 47 U.S.C. § 214(c). See also SBC Communications Inc. and AT&T Corp. Applications for Approval of Transfer
of Control, WC Docket No. 05-65, Memorandum Opinion and Order, 20 FCC Rcd 18290, 18303 ¶ 19 (2005).
65 See, e.g., Comcast-NBCU Order, 26 FCC Rcd at 4249 ¶ 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, 12366, ¶ 33 (2008) (“Sirius-XM Order”); Cingular-
AT&T Wireless Order
, 19 FCC Rcd at 21545, ¶ 43. See also Schurz Communications, Inc. v. FCC, 982 F.2d 1043,
1049 (7th Cir. 1992) (discussing Commission’s authority to trade off reduction in competition for increase in
diversity in enforcing public interest standard).
66 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10711 ¶ 30; AT&T-Qualcomm Order, 26 FCC Rcd
at 17600 ¶ 26; Comcast-NBCU Order, 26 FCC Rcd at 4249 ¶ 25; Sirius-XM Order, 23 FCC Rcd at 12366, ¶ 33;
Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 29.
67 47 U.S.C. §§ 308, 310(d); see also, 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, LLC, WT Docket No. 12-187, 28 FCC Rcd at 10433, 10444 ¶ 28 (“Alaska Wireless Order”);
SoftBank-Sprint Order, 28 FCC Rcd at 9652 ¶ 26; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10712 ¶ 33.
68 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.
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assignors unless issues related to basic qualifications have been sufficiently raised in petitions to warrant
designation for hearing.69 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 Leap.
19.
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.70 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

20.
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.71 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.72 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.73 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 competitive
harms solely to markets identified by its initial screen, if it encounters other factors that may bear on the
public interest inquiry.74

A.

Competitive Overview and Market Definitions

1.

Competitive Overview

21.
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

69 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10445 ¶ 29; SoftBank-Sprint Order, 28 FCC Rcd at 9653 ¶ 27;
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, 16466 ¶ 18
(2012) (“AT&T-WCS Order”).
70 See, e.g., Applications of AT&T Inc., Cellco Partnership d/b/a Verizon Wireless, Grain Spectrum, LLC, and
Grain Spectrum II, LLC, WT Docket No. 13-56, Memorandum Opinion and Order, 28 FCC Rcd 12897,12885-86 ¶
17 (WTB 2013) (“AT&T-Verizon Wireless-Grain Order”); AT&T-WCS Order, 27 FCC Rcd at 16466-67 ¶ 19.
71 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 17598-99 ¶ 23, 17622-23 ¶ 81.
72 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10716 ¶ 48; AT&T-Qualcomm Order, 26 FCC Rcd
at 17602 ¶ 31; 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, 13938 ¶ 50 (2009) (“AT&T-Centennial Order”).
73 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 ¶ 34.
74 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”); 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).
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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.75 To begin our market-by-market analysis,
we examine the likelihood of competitive harm by first estimating the extent to which market
concentration, as measured by the Herfindahl-Hirschman Index (“HHI”), would increase as a result of the
proposed transaction.76 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.77 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.78 In our final analysis of the potential effects of increased market or spectrum concentration,
we consider various other factors that help to predict the likelihood of competitive harm post-transaction.
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.79
2.

Market Definitions

22.
We begin our competitive analysis by determining the appropriate market definitions for
the proposed transaction,80 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.
23.
Product Market. In recent transactions, the Commission has defined the product market
as 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).81
24.
Public Knowledge argues that the relevant market for this transaction is the market for

75 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.
76 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.1. infra.
77 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.
78 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.
79 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.
80 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.
81 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.
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prepaid wireless service.82 Public Knowledge asserts that prepaid plans are distinct from postpaid plans
because they often cost less, do not require lengthy contracts, and generally do not involve credit
checks.83 Public Knowledge cites to the Department of Justice Horizontal Merger Guidelines in support
of its argument that a prepaid market for mobile wireless services exists, arguing that a hypothetical
monopolist could easily and profitably impose a “small but significant and non-transitory price increase”
in the prepaid market at the expense of customers.84 Greenlining urges the Commission to adopt a
combined mobile telephony/broadband services’ product market but recognize the existence of a separate
submarket for “value-conscious services.”85 Public Knowledge asserts that prepaid customers are distinct
from the postpaid customers in that they may exhibit one of the following characteristics: a lower
creditworthiness, lower employment rates, or less purchasing power.86 Public Knowledge contends that
AT&T, as well as other major providers, rely on separate stores, bands, pricing, support and service to
differentiate the prepaid and postpaid markets.87
25.
The Applicants argue that there is no separate product market for prepaid or “value-
conscious” services.88 The Applicants assert that prepaid and postpaid offerings have increasingly
overlapped in terms of devices, network quality, features, and price points, and recent marketplace
developments have further blurred the line between “value” and other wireless offerings.89 The
Applicants claim that their market observations are confirmed by an analysis of survey data that provide
information on subscribers switching between post-paid and pre-paid plans.90 The Applicants claim that
the results of this analysis show that there is significant switching by customers from postpaid to prepaid
plans, and vice versa.91
26.
We decline to modify our product market definition based on the record before us, but
will consider potential product differentiation in the offering of prepaid or value-conscious wireless
services, as appropriate, when we analyze the competitive effects. We continue to use the product market
definition that the Commission has applied in recent transactions: a combined “mobile

82 See Public Knowledge Petition to Deny at 11-14; Public Knowledge Reply at 2-6.
83 See Public Knowledge Petition to Deny at 12; Public Knowledge Reply at 4-5. See also David K. Smith
(“Smith”) Petition to Deny at 9.
84 See Public Knowledge Petition to Deny at 3 (citing 2010 DOJ/FTC Horizontal Merger Guidelines at section 4).
85 See Greenlining Petition to Deny at 5-7.
86 See Public Knowledge Petition to Deny at 4-5 (claiming that prepaid customers have substantially less average
revenue per user and they are more likely to be women).
87 See Public Knowledge Petition to Deny at 4-5, 13 (citing Implementation of Section 6002(b) of the Omnibus
Budget Reconciliation Act of 1993 Annual Report and Analysis of Competitive Market Conditions With Respect to
Mobile Wireless, Including Commercial Mobile Services, WT Docket No. 11-186, Sixteenth Report, 28 FCC Rcd
3700, FCC 13-34 (Mar. 21, 2013) (“Sixteenth Annual Competition Report”)).
88 See Joint Opposition at 21-24.
89 See Joint Opposition at 22. See also Israel Declaration at ¶ 13 (asserting that one historical distinction between
contract and no-contract plans was that providers would offer upfront handset subsidies that were recouped via
payments over the life of the contract or a penalty for early termination; however, marketplace developments largely
have rendered this distinction between contract and no-contract plans moot).
90 See Joint Opposition at 22-23; Israel Reply Declaration at ¶¶ 14-16. The analysis uses deactivation surveys for
both AT&T and Leap as well as a general industry survey to calculate percentages of subscribers that switch from a
post-paid plan to a pre-paid plan, and vice versa. See Israel Reply Declaration at ¶¶ 14-15.
91 See Joint Opposition at 22-23 (citing Israel Reply Declaration at ¶¶ 14-16).
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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).92 As set out in prior transaction proceedings, the product market we define
encompasses differentiated services (e.g., voice-centric or data-centric), devices (e.g., feature phone,
smartphone, tablet, etc.), and contract features (e.g., prepaid vs. postpaid),93 which are distinctions that
wireless providers often recognize in their internal analyses of the marketplace.94 While such distinctions
may suggest the possibility of smaller markets nested within that product market, we find it unnecessary
to examine that possibility in order to analyze the potential competitive effects of the proposed
transaction. We consider these aspects of product differentiation, as appropriate, when we analyze the
competitive effects of the transaction within the markets we define.
27.
Geographic Markets. In prior transactions, 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.95 As discussed below, for this proposed transaction, we
continue to use CMAs as the local geographic markets, and in addition, analyze the nationwide
competitive effects on the mobile telephony/broadband services market.96
28.
Youghiogheny Communications and Public Knowledge argue that Leap is an important
local and national wireless carrier and that the proposed transaction will have a harmful effect at the
national level for prepaid wireless services.97 The Applicants contend that it does not matter whether the
geographic market is viewed as local or national in the proposed transaction because AT&T and Leap are
not close competitors and, they assert, Leap exerts no influence on the competitive decision making of
AT&T.98
29.
Because most consumers use their mobile telephony/broadband services at or close to
where they live, work, and shop, they purchase mobile telephony/broadband services from service

92 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.
93 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10717 ¶ 53 n.119; AT&T-Qualcomm Order, 26
FCC Rcd at 17603 ¶ 33; AT&T-Verizon Wireless Order, 25 FCC Rcd at 8721 ¶ 35; AT&T-Centennial Order, 24
FCC Rcd at 13932 ¶ 37. The Commission has previously determined that there are separate relevant product
markets for interconnected mobile voice and data services, and also for residential and enterprise services, but found
it reasonable to analyze all of these services under a combined mobile telephony/broadband services product market.
See AT&T-Qualcomm Order, 26 FCC Rcd at 17603 ¶33; AT&T-Verizon Wireless Order, 25 FCC Rcd at 8721 ¶ 35;
AT&T-Centennial Order, 24 FCC Rcd at 13932 ¶ 37.
94 See, e.g., ATT-FCC-001306080 at 2-5; ATT-FCC-000978727.
95 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9657 ¶ 38; AT&T-WCS Order, 27 FCC Rcd at 16468 ¶ 25;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10718 ¶ 54.
96 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.
97 See Public Knowledge Petition to Deny at 16 (arguing that Leap is an important disruptive force in the U.S.
prepaid market); Youghiogheny Communications Petition to Deny at 3 (stating that “[t]here can be no doubt that the
loss of Leap would leave a significant hole in both the national and the local market for prepaid and less costly
wireless services”); Youghiogheny Communications Reply at 4-5.
98 See Public Interest Statement at 23-26. See also Israel Declaration at ¶¶ 29-30, 32-38.
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providers that offer and market services locally.99 Service sold in distant locations is generally not a good
substitute for service near a consumer’s home or work.100 In addition, service providers compete at the
local level in terms of coverage and service quality.101 Consistent with past transactions, we will use
CMAs as the local geographic markets in which we analyze the potential competitive harms arising from
spectrum aggregation as a result of these transactions.102
30.
However, as the Commission has previously recognized, two key competitive variables –
monthly prices and service plan offerings – do not vary for most providers across most geographic
markets.103 The four nationwide mobile telephony/broadband service providers (AT&T, Verizon
Wireless, Sprint, and T-Mobile), as well as some other providers, including Leap, set the same rates for a
given plan everywhere and advertise nationally.104 In addition, certain key elements in the provision of
mobile wireless services, such as the development of mobile broadband equipment and devices, are done
largely on a national scale.105
31.
For the purposes of evaluating the competitive effects of the proposed transaction, we use
local geographic markets, but also analyze its potential national effects. Although the proposed
transaction does not cover all markets in the United States, it does span 356 CMAs that are geographically
dispersed throughout the United States, 51 of which are Top 100 markets.106 Moreover, AT&T is
currently the second largest nationwide service provider in the United States, and Leap, a multi-
metropolitan service provider, is the sixth largest provider. Leap covers approximately 31 percent of the
population nationwide with its network footprint, and 100 percent of this population is also covered by
AT&T.107 As a result of the proposed transaction, in the markets in which there is geographical overlap
of spectrum holdings, the combined company would cover approximately 44 percent of the population in
the United States.108 We therefore find that, in analyzing the relevant geographic markets, it is
appropriate to consider any potential competitive effects that may result from the proposed transaction on
both local and national markets.

99 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9657 ¶ 38; AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 26;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10718 ¶ 56; see also Sixteenth Annual Competition Report, 28
FCC Rcd at 3735 ¶¶ 22-23.
100 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.
101 See id.
102 See, e.g., AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 26; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10718 ¶ 56; AT&T-Qualcomm Order, 26 FCC Rcd at 17604 ¶ 34.
103 See, e.g., AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 27; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10718 ¶ 57; AT&T-Qualcomm Order, 26 FCC Rcd at 17604-05 ¶¶ 34-37.
104 See, e.g., AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 27; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10718-19 ¶ 57; Sixteenth Annual Competition Report, 28 FCC Rcd at 3797-3818 ¶¶ 137-174.
105 See AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 27; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719
¶ 57.
106 In those 356 CMAs, Leap holds 10 to 50 megahertz of spectrum, including 10 to 40 megahertz of spectrum in the
Top 100 markets. In addition, Leap has a substantial market presence in 38 CMAs, primarily in Texas, California,
Arkansas, Colorado, and Arizona, including 17 Top 100 markets (as ranked by 2010 U.S. Census data).
107 See Mosaik, January 2014.
108 See Accepted for Filing PN, 28 FCC Rcd at 12777.
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32.
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.109 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 available,110 and
most recently, Wireless Communications Services (“WCS”) spectrum, all meet this definition, and they
have therefore been included in the initial spectrum screen.111 The Commission traditionally has applied
an initial screen to help identify local markets where a proposed transaction might raise particular
concerns with respect to spectrum holdings.112 The current screen identifies local markets where an entity
would hold more than approximately one-third of the total spectrum suitable and available for the
provision of mobile telephony/broadband services post-transaction.113
33.
RWA and Youghiogheny Communications set forth arguments regarding the type and
amount of spectrum the Commission should include as suitable and available spectrum for mobile
telephony/broadband services. Youghiogheny Communications addresses the availability of BRS
spectrum as it relates to certain markets in south Texas that are involved in the proposed transaction.114 In
particular, Youghiogheny Communications asserts that BRS service is actually available to consumers in
only three of these south Texas markets.115 Concerning the south Texas markets identified in their
petition,116 Youghiogheny Communications claims that although BRS spectrum has been “transitioned”
in these markets, the spectrum is not available to consumers for mobile broadband service and therefore
should not be considered “operating.”117 In its comments, RWA contends that the current spectrum
screen should be modified to include only 14 megahertz of SMR spectrum and 70 megahertz of 700 MHz
Band spectrum.118
34.
For purposes of our analysis of the instant transaction, we decline to modify the current
input market for spectrum and continue to apply the spectrum screen that the Commission has used in

109 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10448-49 ¶ 38; SoftBank-Sprint Order, 28 FCC Rcd at 9657-58
¶ 39; AT&T-WCS Order, 27 FCC Rcd at 16469 ¶ 29; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719 ¶
59.
110 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).
111 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.
112 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10449 ¶ 38; AT&T-WCS Order, 27 FCC Rcd at 16470 ¶ 29;
Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10719 ¶ 59.
113 See Alaska Wireless Order, 28 FCC Rcd at 10449 ¶ 38; AT&T-WCS Order, 27 FCC Rcd at 16470 29; Verizon
Wireless-SpectrumCo Order
, 27 FCC Rcd at 10719 ¶ 59; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17473 ¶
54.
114 See Youghiogheny Communications Petition to Deny at 6-8, Appendix A.
115 See id. at 6, Appendix A.
116 See id. at Appendix A.
117 See id. at 7, Appendix A.
118 See RWA Comments at 6-7.
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recent mobile wireless transactions.119 Regarding Youghiogheny Communications’ arguments
concerning the suitability and availability of BRS spectrum, we note that, under its analysis, it does not
consider BRS spectrum to be suitable and available in a county unless Clearwire is actually providing
commercial service in that county.120 The Commission has held that 55.5 megahertz of BRS spectrum is
suitable and available in a market once the BRS spectrum in that market has transitioned to the new band
plan established by the Commission in 2004.121 In each of the south Texas markets identified by
Youghiogheny Communications, BRS licensees have transitioned to the new band plan.122
Youghiogheny Communications has failed to provide any justification for fundamentally modifying the
Commission’s approach and instead including spectrum in the screen in a local market only after it is
being used as part of a commercial service. Concerning the other modifications of the spectrum screen,
including RWA’s request, we note that this issue and the type and amount of spectrum included in the
input market generally, 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.123
35.
Market Participants. In previous transactions, the Commission has considered 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 has assessed the competitive effect
of MVNOs and resellers.124
36.
The Applicants assert that Leap offers its facilities-based services to less than one-third of
the U.S. population,125 and its attempt to expand outside its retail footprint through an MVNO agreement
has “fallen short of expectations.”126 Youghiogheny Communications argues that Leap has held itself out
to be a national provider, by both its facilities-based operations and its MVNO capabilities.127 Public

119 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.
120 See Youghiogheny Communications Petition to Deny at Exhibit A (“Each zip code was then run through
Clearwire’s online service locator (at Clearwire.com) to determine whether or not Clearwire was available in that
particular area. Counties that contain zip codes with Clearwire service available contain a ‘YES’ under ‘BRS
Available?’ on the above chart. Any county listed with a ‘NO’ in the BRS column did not have Clearwire service
available in any of the zip codes within its boundaries.”)
121 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9658 n.120; AT&T-Qualcomm Order, 26 FCC Rcd at 17606
n.120.
122 See post-transition notifications filed in WT Docket No. 06-136.
123 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.
124 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. for
Consent to Transfer of Control of Licenses and Authorizations, WT Docket No. 12-301, Memorandum Opinion and
Order and Declaratory Ruling
, 28 FCC Rcd at 2333-34 ¶ 34, 2334-5 ¶ 37 (WTB, IB 2013) (“T-Mobile-MetroPCS
Order
”).
125 See Public Interest Statement at ii.
126 See id. at 11.
127 See Youghiogheny Communications Petition to Deny at 3.
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Knowledge contends that MVNOs are dependent on the networks of facilities-based providers and they
are fundamentally limited in the ways they can compete with facilities-based providers and cannot, for
instance, improve their networks in particular areas to gain a competitive edge.128 In response, the
Applicants maintain that MVNOs are significant providers of prepaid and value services.129 The
Applicants argue that TracFone, for example, is the largest single provider of prepaid service in the
country, with the ability to serve customers nationally, and that many other MVNOs are also
competitors.130 The Applicants assert that, unlike other MVNOs, Leap has a limited geographic footprint
and is unable to offer 4G LTE service.131 The Applicants maintain that Leap’s MVNO operations have
not made Leap a “meaningful national competitor” and that Leap’s 3G MVNO offering has only attracted
a relatively small number of customers.132
37.
For purposes of our analysis of the instant transaction, we note that Leap offers both
facilities-based service options and MVNO service options. As in previous transactions, we will exclude
MVNOs and resellers from consideration when computing initial concentration measures,133 and thus,
facilities-based service providers only will be taken into account in our calculations of market
concentration. However, MVNOs and resellers may provide additional constraints against any
anticompetitive behavior.134 Therefore, 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 MVNOs and
resellers in our competitive evaluation.135

B.

Competitive Effects of the Proposed Transaction

38.
In analyzing the competitive effects of the proposed transaction, we consider the various
arguments in the record, which raise issues regarding the potential effects of the transaction in particular
local markets and on a broader national scale. We also conduct our own market-by-market review of
certain local markets where there appears to be a particular potential for competitive harm.
39.
As an initial step, we apply the Commission’s two-part initial screen to identify local
geographic markets that may be of particular competitive concern in this transaction because of the loss of
Leap as a competitor.136 The number of local markets triggered by the screen also helps identify the
potential for competitive effects that are broader than individual markets. However, the initial screen is
only the beginning of our competitive analysis because we then analyze the impact of the proposed

128 See Public Knowledge Reply at 6-8. See also Public Knowledge Petition to Deny at 15-16.
129 See Joint Opposition at 28.
130 See id. at 28-29.
131 See id. at 29.
132 See Joint Opposition at 20; Public Interest Statement at 11; Public Interest Statement, Hutcheson Declaration at
¶¶ 8, 13 (“Hutcheson Declaration”).
133 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8722 ¶ 41; AT&T-Centennial Order, 24 FCC Rcd at
13936 ¶ 45; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21563 ¶ 92.
134 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8724 ¶ 41; AT&T-Centennial Order, 24 FCC Rcd at
13936 ¶ 45.
135 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10449-50 ¶ 41; SoftBank-Sprint Order, 28 FCC Rcd at 9660
¶ 43.
136 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 ¶ 42; SoftBank-Sprint Order, 28 FCC Rcd at 9660 ¶ 44;
AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720-21 ¶ 32.
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transaction on the local markets identified by the screen.137 As set out in various transactions orders, our
consideration of potential competitive harms is not limited solely to markets identified by the screen, we
also consider other factors that may bear on our public interest inquiry.138
40.
After application of the initial screen, we address the most significant competitive
arguments raised by parties that are not specific to individual local markets. We then turn to a market-by-
market analysis before finishing with a discussion of roaming and other issues raised in the record.
1.

Initial Screen

41.
As discussed above, we apply a two-part initial screen to help identify local markets
where competitive concerns are more likely.139 The first part of the screen is based on the size of the
post-transaction HHI, and the change in the HHI.140 The second part of the screen, which is applied on a
county-by-county basis, identifies CMAs where an entity would hold more than approximately one-third
of the total spectrum suitable and available for the provision of mobile telephony/broadband services
post-transaction.141
42.
Record. RWA asserts that the Commission should promulgate new industry-wide rules
so that a provider cannot hold more than 25 percent of all suitable or available spectrum and no more than
40 percent of suitable and available spectrum below 1 GHz.142 If the instant transaction is reviewed prior
to the Commission setting forth new rules on spectrum holdings,143 RWA contends that the Commission
should require AT&T to divest or lease spectrum in excess of a 25 percent threshold or permit AT&T to
hold greater than 25 percent of all suitable and available spectrum and 40 percent of suitable and available
spectrum below 1 GHz in any given market with certain conditions regarding roaming and mobile
devices.144 CCA also argues for a new threshold for spectrum below 1 GHz, and they suggest that this

137 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 ¶ 42; AT&T-WCS Order, 27 FCC Rcd at 16467 ¶ 21.
138 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 ¶ 35; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at
10716 ¶ 48.
139 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 ¶ 42; SoftBank-Sprint Order, 28 FCC Rcd at 9660 ¶ 44;
AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720-21 ¶ 32.
140 The 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.
141 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 ¶ 42; AT&T-WCS Order, 27 FCC Rcd at 16470 ¶ 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.
142 See RWA Comments at i, 3-7, 9-10; see generally RWA Reply.
143 RWA also argues that until the Commission completes its review in the mobile spectrum holdings proceeding,
the Commission should review any proposed spectrum transaction, including this transaction, with “a reduced
spectrum screen and an analysis that fosters the existence of at least four separate carriers with sufficient spectrum in
every affected county.” RWA Comments at 4-5.
144 See RWA Comments at i, 5-10; RWA Reply at 3-4. RWA asserts that the Commission should impose the
following conditions for the markets where AT&T’s spectrum holdings would exceed RWA’s recommended 25
(continued….)
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threshold should be one-quarter of the “useable spectrum in a given market.”145 In addition, CCA further
contends that there should be “a new national threshold set somewhat below the level that would
correspond to one-third of the spectrum deemed suitable and available for mobile broadband.”146 While
Public Knowledge does not assert that the Commission should modify its existing spectrum screen, Public
Knowledge maintains that the Commission should consider analyzing AT&T’s spectrum concentration by
band.147 Public Knowledge contends that, for example, AT&T would have 50 percent or more of the
available PCS spectrum post-transaction in a significant number of counties.148
43.
Several petitioners contend that the application of the spectrum screen triggers many
local markets and gives rise to competitive concerns at the local level. Public Knowledge asserts that the
instant transaction triggers the spectrum screen in 40 CMAs149 in nearly two dozen states.150 In particular,
Public Knowledge claims that Nevada, Texas, and Idaho would have the largest increases in spectrum
concentration post-transaction.151 In addition, CCA argues that the spectrum screen is triggered in local
markets that cover approximately seven million people and, they contend, the Applicants should therefore
be required to divest spectrum in every local market where the proposed transaction exceeds the spectrum
screen.152 Moreover, Public Knowledge advocates for a thorough case-by-case review of the local
markets in order to fully measure the proposed threat of harm that may occur as a result of spectrum
consolidation.153
44.
RWA, Youghiogheny Communications, and Mr. Smith urge the Commission to hold the
proposed transaction in abeyance until the Commission completes its mobile spectrum holdings
rulemaking proceeding.154 Mr. Smith asserts that this rulemaking proceeding will address “the harmful
threats of greater market power and spectrum consolidation in the wireless industry,” which he argues are
(Continued from previous page)
percent threshold: (1) offer data roaming at rates that are on par with what AT&T charges MVNOs; (2) offer fully
interoperable devices to AT&T customers; and (3) ensure that all mobile devices sold by AT&T are capable of
being unlocked by consumers and used on the networks of those carriers who utilize the same technology as AT&T.
145 See CCA Petition to Condition at 13. See also CCA Reply at 9.
146 See CCA Petition to Condition at 13. CCA does assert that the Commission should continue to use its current
one-third threshold for evaluating an entity’s aggregated spectrum holdings. See CCA Petition to Condition at 13.
147 See Public Knowledge Petition to Deny at 5-6; Public Knowledge Reply at 11.
148 See Public Knowledge Petition to Deny at 5; Public Knowledge Reply at 11. Public Knowledge claims that the
proposed transaction would result in AT&T having 50% or greater of all available PCS spectrum in 74 counties,
with a population of nearly 5 million, and more than 33% of all PCS spectrum in almost one-third of all counties.
See Public Knowledge Petition to Deny at 5.
149 See Public Knowledge Petition to Deny at 6; Public Knowledge Reply at 8. Public Knowledge argues that the
Applicants count of CMAs triggering the screen is different from the number calculated by Public Knowledge
because of methodological differences. See Public Knowledge Reply at 9-10.
150 See Public Knowledge Petition to Deny at 5.
151 See Public Knowledge Petition to Deny at 5. Public Knowledge contends that in Nevada, Texas, and Idaho there
would be an increase in concentration at 21%, 18%, and 14% over the spectrum screen, respectively. See id.
152 See CCA Reply at 10-11.
153 See Public Knowledge Petition to Deny at 11.
154 See Smith Petition to Deny at 1-2, 13-15; Smith Reply at 1, 3-6; RWA Comments at 5; Youghiogheny
Communications Petition to Deny at 10.
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the same threats posed by the instant transaction.155 CCA maintains that the Commission should modify
its spectrum screen by completing the mobile spectrum holdings proceeding “immediately” because this
will allow for increased clarity and consistency in the upcoming auctions.156 Youghiogheny
Communications further contends that instead of deciding on transactions such as this transaction during
the pendency of the mobile spectrum holdings rulemaking, the Commission should either hold a hearing
or condition any approval of the proposed transaction on the outcome of that rulemaking proceeding.157
45.
Regarding the current spectrum screen, the Applicants argue that the Commission should
continue to apply the existing screen, which applies to all spectrum.158 The Applicants apply the existing
screen and assert that the screen is triggered in 38 CMAs.159 The Applicants also assert that the
Commission should not single out PCS spectrum for a separate screen.160 Concerning the pending mobile
spectrum holdings proceeding, the Applicants contend that the Commission should not modify its current
screen during the pendency of that proceeding.161 The Applicants argue that, as the Commission has done
in the past, it should address the spectrum proposals put forth in the mobile spectrum holdings proceeding
and apply the existing screen to the instant transaction.162 Further, the Applicants assert that the
Commission should reject the requests by Youghiogheny Communications and Mr. Smith to freeze all
secondary spectrum market transactions until the mobile spectrum holdings proceeding is completed.163
46.
Discussion. For purposes of the instant transaction, we decline to modify the current
spectrum screen with respect to trigger level and weighting or separate screen based on type of spectrum,
as requested by certain parties. As noted above, the Commission is reviewing these issues, along with a
number of related issues, in the ongoing mobile spectrum holdings rulemaking proceeding,164 and we will
not hold the proposed transaction in abeyance.
47.
Accordingly, we apply our two-part initial screen to this transaction to help identify local
markets where competitive concerns are more likely.165 For purposes of determining HHIs in this
transaction, we use June 2013 NRUF data, which includes phone number usage by all

155 See Smith Reply at 1, 3-6; see also Smith Petition to Deny at 1-2, 13-15. Similarly, CCA argues that the
spectrum screen “should account for the unique competitive challenges facing today’s consolidating industry.”
CCA Petition to Condition at 13; CCA Reply at 9.
156 See CCA Petition to Condition at 13-14. See also CCA Reply at 9.
157 See Youghiogheny Communications Petition to Deny at 9-10. See also Letter from Donald J. Evans, Counsel for
Youghiogheny Communications, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT
Docket 13-193, at 2 (filed Dec. 16, 2013) (“Youghiogheny Communications Dec. 16, 2013 Ex Parte”).
158 See Joint Opposition at 17.
159 See id. at 12.
160 See id. at 17.
161 See id.
162 See id. at 17-18.
163 See id. at 18.
164 See Mobile Spectrum Holdings NPRM, 27 FCC Rcd at 11725-28 ¶¶ 33-39.
165 See, e.g., Alaska Wireless Order, 28 FCC Rcd at 10450 ¶ 42; SoftBank-Sprint Order, 28 FCC Rcd at 9660 ¶ 44;
AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720-21 ¶ 32.
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telecommunications service providers.166 Consistent with our discussion of the local geographic markets
above, in calculating HHIs and the change in the HHI, we analyze service provider data by CMA. The
second part of the screen (which we apply on a county-by-county basis) identifies CMAs where an entity
would hold more than approximately one-third of the total spectrum suitable and available for the
provision of mobile telephony/broadband services post-transaction.167
48.
Our application of the HHI screen to the proposed transaction triggers 84 local
markets.168 In applying the spectrum screen, 38 local markets are triggered.169 There are 18 local markets
triggered by both the HHI screen and the spectrum screen.170 Of the markets triggered by the HHI screen,
33 local markets are considered Top 100 markets.171 There is one local market that was triggered by the
HHI screen and the spectrum screen that is a Top 100 market.172 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.
2.

Competitive Analysis

49.
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
as plan features, call quality, geographic coverage, and customer service.173 Competition may be harmed

166 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.
167 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.
168 See Appendix C.
169 See id.
170 See id.
171 See id.
172 The one Top 100 market that was triggered by the HHI screen and the spectrum screen is McAllen-Edinburg-
Mission, TX (CMA 128). See Appendix C.
173 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,
(continued….)
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either through unilateral actions by the combined entity, or through coordinated interaction among service
providers competing in the relevant markets. 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.174 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.175 Either or both unilateral and coordinated effects may arise from a proposed transaction, and the
distinction between them is not always clear cut.176 In the record, no one directly argues that coordinated
effects may arise from this proposed transaction.
50.
Below we address competitive concerns in the record with respect to any unilateral
effects and other potential competitive concerns arising out of this proposed transaction. In reviewing the
application involving the proposed transaction, we first discuss arguments related to the loss of Leap as an
independent facilities-based competitor. These arguments include claims that (1) Leap is a disruptive
force in the wireless market and has ability to act as a maverick; (2) the loss of Leap as a substitute to
AT&T would generate upward pricing pressure on the merged entity’s services post-transaction; and (3)
the loss of Leap as a value provider in competition with Aio Wireless in certain market segments would
cause competitive harms in that market segment. We then undertake a case-by-case review of markets
where the acquisition of customers and/or spectrum would result in significant concentration of either or
both.177
a.

General Arguments Regarding Loss of Leap as an Independent
Facilities-Based Provider

(i)

Record

51.
Many petitioners raise general concerns about the loss of Leap as an independent
facilities-based provider. RWA contends that the loss of Leap as an independent, facilities-based
provider would separate the marketplace into two distinct groups: small, rural, and local providers on one
side and on the other side, four nationwide providers, harming consumers.178 Youghiogheny
Communications asserts that AT&T and Leap have repeatedly characterized Cricket as a national carrier
(Continued from previous page)
Memorandum Opinion and Order, 19 FCC Rcd 21522, 21570 ¶ 116 (2004).
174 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.
175 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.
176 See 2010 DOJ/FTC Horizontal Merger Guidelines at § 2. See also, e.g., Alaska Wireless Order, 28 FCC Rcd at
10446 ¶ 33 n.104.
177 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9656 ¶ 34.
178 See RWA Comments at 2.
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in filings before the Commission and have argued that the elimination of Cricket as an independent player
in the national market reduces the number of national facilities-based actors from five to four.179 CCA,
Greenlining, and Youghiogheny Communications, for instance, argue that the proposed transaction would
result in harm to consumers because Leap is an important competitor.180 Mr. Smith argues that the
proposed transaction would harm competition at the local level because it would eliminate a chief local
competitor and reduce consumer choice.181
52.
The Applicants contend that Leap does not compete as a facilities-based provider at the
national level, and that because this proposed transaction does not reduce the number of national wireless
providers, it will not have an adverse impact on national competition.182 The Applicants assert that
Leap’s declining presence in the markets in which it operates demonstrates its current market share,
which they claim, overstates Leap’s current, and particularly its future, competitive prospects.183 The
Applicants contend that since 2011, Leap’s competitive significance has declined significantly.184 In
addition, the Applicants claim that Leap has deployed LTE in only a small portion of its network footprint
and Leap’s financial resources and limited spectrum depth make it uneconomic to upgrade its current 3G
CDMA platform to LTE across its network.185 Leap asserts that as wireless data traffic continues to rise,
the constraints on Leap’s LTE deployment will likely increasingly hamper its ability to compete with
national wireless service providers.186 Finally, the Applicants assert that Leap’s MVNO operations have
not made Leap a “meaningful national competitor.”187
53.
Loss of a Maverick Competitor. Some petitioners express particular concern about the
effects of eliminating Leap as a competitor on the market because, they contend, Leap is a disruptive or

179 See Youghiogheny Communications Reply 4-5.
180 See CCA Petition to Condition at 5-7; CCA Reply at 4-5; Greenlining Petition to Deny at 8-9; Youghiogheny
Communications Petition to Deny at 18-21; Youghiogheny Communications Dec. 16, 2013 Ex Parte at 2-3. See
also
Letter from Alan Pearce and Martyn Roetter, Information Age Economics, to Marlene H. Dortch, Secretary,
Federal Communications Commission, WT Docket 13-193, at 1 (filed Feb. 28, 2014) (“IAE Feb. 28, 2014 Ex
Parte
”).
181 See Smith Reply at 8-9.
182 See Public Interest Statement at iii, 24-34; Joint Opposition at 10, 19-21.
183 See Joint Opposition at 32.
184 See Joint Opposition at 19 (asserting that Leap has lost an estimated 22 percent of its subscriber base and saw its
estimated national market share decline to [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
percent between March 31, 2012 and June 30, 2013). See id.
According to Leap, in response to this decline in subscribership, Leap implemented cost cutting initiatives and made
changes to its wireless plans, including the elimination of its daily Cricket PAYGo (pay-as-you-go) plan in October
of 2012. See Leap Wireless International, LLC, SEC Form 10-K, at 3 (filed Feb. 25, 2013), available at
http://www.sec.gov/Archives/edgar/data/1065049/000106504913000003/leap-dec2012q4x10k.htm (last visited Mar.
11, 2014); Hutcheson Declaration at ¶¶ 5-6. See also Leap’s Cricket dumps PAYGo daily plans,
http://www.fiercewireless.com/story/leaps-cricket-dumps-paygo-daily-plans/2012-10-24 (last visited Mar. 10,
2014). Leap continues to offer monthly Cricket PAYGo plans. See http://www.leapwireless.com/brands (last
visited Mar. 10, 2014).
185 See Joint Opposition at 19. See also Public Interest Statement, Hutcheson Declaration at ¶¶ 5-7, 9-13.
186 See Hutcheson Declaration at ¶¶ 9, 11.
187 See Joint Opposition at 20. See also Hutcheson Declaration at ¶¶ 13-15.
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maverick competitor.188 Mr. Smith asserts that Leap serves a valuable function at both the national and
local levels, challenging the existing market leaders to offer competitive prices and innovative services.189
Mr. Smith contends that Leap plays a critical role at the national level, and that Leap has developed
industry-changing products, such as Muve Music.190 Similar to Mr. Smith’s contentions, RWA argues
that the proposed transaction would result in denying consumers competitive pricing and innovative
services and technologies.191 Public Knowledge argues that Leap is a disruptive force in the prepaid
market because Leap was one of the first prepaid providers to offer unlimited talk, text, and data offerings
as well as being the first U.S. prepaid providers to offer the iPhone.192
54.
In response to the petitioners’ arguments that Leap is a “disruptive maverick,” the
Applicants contend that a firm cannot be a maverick if the provider has not affected competition
significantly.193 The Applicants assert that this term cannot be applied to a provider such as Leap because
it has been losing market share and has not evoked competitive responses.194
55.
Upward Pricing Pressure. The Applicants also argue that loss of Leap would not
materially affect the pricing or other key competitive decisions of the nationwide wireless providers,195
and that, in particular, this transaction is unlikely to lead to significant upward pressure on post-
transaction prices.196 The Applicants claim that AT&T and Leap are not close substitutes, and that Sprint
and T-Mobile are closer substitutes to Leap than AT&T.197 The Applicants analyze porting data obtained

188 See CCA Petition to Condition at 5-6; Youghiogheny Communications Petition to Deny at 18-21; Youghiogheny
Communications Reply at 4; Smith Petition to Deny at 6-7; Smith Reply at 6-10; Public Knowledge Petition to
Deny at 8-10, 16. See also Letter from Donald J. Evans, Counsel for Youghiogheny Communications, LLC, to
Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket 13-193, at 2 (filed Jan. 29, 2014).
(“Youghiogheny Communications Jan. 29, 2014 Ex Parte”).
189 See Smith Reply at 6-8; Smith Petition to Deny at 9-10.
190 See Smith Reply at 7-8 (noting that AT&T and Leap argued that in 2011 Leap was a disruptive force in the
national market in the AT&T/T-Mobile proceeding). See also Youghiogheny Communications Petition to Deny at
Exhibit B.
191 See RWA Comments at 5.
192 See Public Knowledge Petition to Deny at 16-17 (contending that if AT&T is interested in the prepaid market, it
has adequate resources to enter the market without eliminating a disruptive competitor).
193 See Joint Opposition at 20.
194 See id.
195 See id. at 30 (citing Israel Declaration at ¶ 25, where he states, “[A] lower diversion ratio means that the firms in
question are not particularly close competitors, thus limiting any competitive concerns.”).
196 See Israel Declaration at ¶ 24.
197 See Public Interest Statement at 25-29; Israel Declaration at ¶¶ 27-38; Hutcheson Declaration at 7-8; Jan. 3, 2014
AT&T Second Supplemental Response, Exhibit 4.1 at 6-7. The Applicants calculate T-Mobile’s percent of Leap’s
ports out 2 years before T-Mobile’s acquisition of MetroPCS and Leap’s ports out after the T-Mobile/MetroPCS
transaction. From 2 years prior to the T-Mobile/MetroPCS transaction to after the close of the transaction Leap’s
ports out to T-Mobile increased from [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
%. See Israel Reply Declaration at ¶¶ 24-38. The Applicants
also argue that there are certain limitations with porting data such as: (1) porting data include only subscribers who
keep their phone numbers when switching, meaning that the data capture only a subset of switchers; (2) porting data
do not capture only those customers who switch due to changes in quality-adjusted prices, but rather include
customers who switch for any reason. See Israel Declaration at ¶ 26. These calculations do not reflect porting at the
local or national level but instead align with Leap’s facilities-based service area. They reflect all local areas where
(continued….)
25

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from AT&T and Leap,198 and conclude that consumers do not view AT&T and Leap as close
substitutes.199 They also argue that the rate of substitution calculated from the porting data compared with
AT&T’s and Leap’s market shares indicates that competitive concerns from high market shares are not
warranted.200 The Applicants claim that this limited substitution between AT&T and Leap is not
surprising given the differentiated nature of their products.201 The Applicants argue that the product
offerings of Sprint’s pre-paid brands, Boost and Virgin Mobile, and T-Mobile’s MetroPCS brand are
closer substitutes for Leap’s offerings than AT&T’s.202 The Applicants further claim that in the markets
where T-Mobile has introduced the MetroPCS brand there has been an increase in the number of ports out
by Leap customers to T-Mobile’s customers.203
56.
The Applicants also argue that this transaction is unlikely to lead to significant upward
pressure on post-transaction prices based on the results of a Gross Upward Pricing Pressure Index
(“GUPPI”) analysis submitted in response to the Information and Discovery Request.204 Their analysis
estimates nationwide and Leap-service-area GUPPIs for the AT&T-Leap transaction,205 as well as CMA-
(Continued from previous page)
AT&T has at least one port out to Leap and all of Leap’s port out data for all geographies where Leap provides a
facilities-based service. See Aug. 20, 2013 Applicants Supplemental Response at 7.
198 See Israel Declaration at ¶ 26.
199 See Israel Declaration ¶¶ 27-28; Hutchinson Declaration at 7. According to the Applicants’ analysis of the data,
only 13% of subscribers port from Leap to AT&T, and that only 3.3% of subscribers port from AT&T to Leap. See
Israel Declaration at ¶ 27-28.
200 See Public Interest Statement at 26; Israel Declaration at ¶¶ 27-28; Joint Opposition at 30; see also Aug. 20, 2013
Applicants Supplemental Response at 6-8.
201 See Public Interest Statement at 25; Israel Declaration at ¶¶ 27-31.
202 See Public Interest Statement at 26-29; Israel Declaration at ¶¶ 32-38; Joint Opposition at 24-27; Israel Reply
Declaration at ¶¶ 25-29. The Applicants also point to MVNOs such as TracFone/Straight Talk as being a closer
substitute for Leap, although they do not have porting data to support this claim. See Public Interest Statement at
28-29, 28 n.134; Joint Opposition at 28-29. Leap anticipates increased head-to-head competition from T-Mobile’s
MetroPCS brand which has begun to expand aggressively into Leap’s markets. See Hutchinson Declaration at 7;
Joint Opposition at 24.
203 See Joint Opposition at 26; Israel Reply Declaration at ¶¶ 23-26; Jan. 3, 2014 AT&T Second Supplemental
Response, Exhibit 4.1 at 8. Leap’s ports out to T-Mobile since its introduction of the MetroPCS brand into Leap
markets has increased from [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
%. See Joint Opposition at 26; Israel Reply Declaration at ¶¶26-27.
204 See Nov. 22, 2013 AT&T Initial Response at 12-14; Jan. 3, 2014 AT&T Second Supplemental Response at 1,
Exhibit 4.1 at 2, 10-17. As described by AT&T, the GUPPI is an economic tool designed to analyze the unilateral
incentives to raise price that may arise from a merger of two firms competing in a differentiated products industry,
before considering the synergies and efficiencies arising from the transaction. See Nov. 22, 2013 AT&T Initial
Response at 1.
205 See Nov. 22, 2013 AT&T Initial Response at 14; Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit
4.1 at 2, 10-17. The average AT&T and Leap GUPPIs are less than [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| [END HIGHLY CONFIDENTIAL INFORMATION] % across all CMAs and less
than[BEGIN HIGHLY CONFIDENTIAL INFORMATION] ||| [END HIGHLY CONFIDENTIAL
INFORMATION]
% across all CMAs where Leap has an estimated market share of at least two percent. See Nov.
22, 2013 AT&T Initial Response at 14. Leap reduced its national distribution footprint from approximately 13,000
retail outlets in 2012 to approximately 5,000 retail outlets in 2013 in order to further reduce its costs. See Public
Interest Statement, Hutcheson Declaration at ¶ 8. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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level GUPPIs for seven south Texas CMAs and three Central Valley, California CMAs.206 The
Applicants contend that their GUPPI analysis does not change the conclusion that the transaction would
not lead to any upward price increases because pricing is national and competitive conditions in any
particular CMA would have, at most, a limited effect on pricing in that CMA.207
57.
Youghiogheny Communications contests the Applicants’ claims that AT&T and Leap are
not close competitors.208 Youghiogheny Communications argues that Leap competes with AT&T’s pre-
paid GoPhone and Aio Wireless service offerings, and with MVNOs that access the AT&T network.209
Further Youghiogheny Communications claims that competition between post- and pre- paid mobile
wireless services is intensifying, and therefore consumers view these as substitute services.210
Youghiogheny Communications also contests the Applicants’ claims that the porting data confirm that
AT&T and Leap are not close competitors, noting that the data on Leap’s porting rates shows that Leap’s
customers are porting to the four nationwide providers, including AT&T, although the porting to AT&T
is less than to Sprint or T-Mobile.211
58.
Effects on Value-Conscious Consumers. Mr. Smith maintains that Leap serves a
valuable function as a rival competitor and an important low cost alternative at the national and local
level.212 Mr. Smith further contends that the proposed transaction undermines competition by removing
one of the wireless market’s chief regional carriers and providers of prepaid, no-contract wireless
services.213 Moreover, Public Knowledge contends that independent competitors, such as Leap, promote
competition in the wireless market and avoid excessive spectrum aggregation.214
59.
CCA, Greenlining, and Youghiogheny Communications contend that, in addition to the
loss of Leap as a competitor, the instant transaction would cause the elimination of Aio Wireless, thus

206 See Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit 4.1 at 21-25. In the 10 selected CMAs, none of
the weighted average GUPPIs is greater than [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END
HIGHLY CONFIDENTIAL INFORMATION]
% and most are below [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]|
| | [END HIGHLY CONFIDENTIAL INFORMATION] %. See Jan. 3, 2014 AT&T Second
Supplemental Response, Exhibit 4.1 at 23. Leap states that its network operates primarily on 3G CDMA EVDO
technology, and it is not providing 4G services on an MVNO basis. Leap maintains that, given its financial
constraints and limited spectrum resources, it has limited its deployment of LTE to 11 metropolitan areas, covering
approximately 21 million people. See Public Interest Statement, Hutcheson Declaration at ¶¶ 9, 13.
207 See Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit 4.1 at 22. Given the results of their GUPPI
analysis, Applicants did not construct or submit an economic model, such as a merger simulation model, that could
take into account responses by other mobile wireless service providers, and may also incorporate efficiencies
resulting from the transaction.
208 See Youghiogheny Communications Petition to Deny at 17-18; IAE Declaration at 14-15; IAE Reply Declaration
at 5-7; IAE Ex Parte, Jan. 6, 2014 at 4-5, Appendix 1. Youghiogheny Communications argues that rather than
finding AT&T and Leap to not be close competitors, the proper terminology should be “weak” competitor. See IAE
Reply Declaration at 5-6.
209 See IAE Declaration at 14.
210 See id. at 15; Youghiogheny Communications Reply at 7-8.
211 See IAE Ex Parte Jan. 6, 2014 at 4.
212 See Smith Petition to Deny at 4-5; Smith Reply at 7-8.
213 See Smith Petition to Deny at 4-5.
214 See Public Knowledge Petition to Deny at 8-9 (asserting that AT&T has been acquiring significant amounts of
spectrum on the secondary market both through acquiring competitors and through purchasing licenses).
27

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resulting in harm to competition. These petitioners assert that the Aio Wireless brand was intended to
compete directly against Leap in the prepaid market and the proposed transaction would result in the
elimination of Aio Wireless as an important competitive force that prompted AT&T to act to enter the
prepaid market in the first place.215 In particular, CCA claims that, while AT&T would still offer prepaid
services, the proposed transaction would eliminate a competitor, and they claim that this would diminish
innovation, eliminate options, and likely raise prices for consumers.216
60.
The Applicants maintain that even if the Commission examined a narrower prepaid or
“value” segment, it should find that the proposed transaction does not threaten competition.217 The
Applicants contend that prepaid/no-contract service will continue to be provided by numerous providers
offering a wide and growing variety of options for consumers.218 The Applicants point to T-
Mobile/MetroPCS and Sprint, and contend that these are significant competitors that each have a
nationwide presence and offer more extensive, advanced 4G rollouts and service offers than Leap.219
Moreover, the Applicants contend that MVNOs are significant providers of prepaid and value services.220
61.
The Applicants argue that the proposed transaction is procompetitive given Leap’s
declining significance and claims about the loss of potential competition from Aio Wireless are
unfounded.221 Concerning Aio Wireless, the Applicants assert that in combining Aio Wireless with
Leap’s existing operations under the Cricket brand name,222 AT&T would continue to build and expand
its value offerings, and the proposed transaction would accelerate and strengthen the competitive effect of
those offerings by allowing AT&T to integrate Leap’s assets and expand the Cricket brand nationwide.223
62.
Spectrum Aggregation. CCA, RWA, and Mr. Smith claim that the marketplace is already
dominated by AT&T and Verizon Wireless, due in large part to their dominant spectrum positions, and
that the proposed transaction would only increase AT&T’s dominant position thereby making it more
difficult for other providers to compete.224 CCA further asserts that with the majority of the available
spectrum resources controlled by these two providers, it stymies the ability of other industry stakeholders
to provide competitive services to consumers.225 CCA maintains that AT&T’s dominance in the wireless
market through spectrum acquisitions could result in significant competitive advantages over smaller
providers.226 Youghiogheny Communications argues that there are concerns regarding industry

215 See CCA Reply at 4-5; Greenlining Petition to Deny at 9-11; Youghiogheny Communications Petition to Deny at
17.
216 See CCA Petition to Condition at 4-7; CCA Reply at 4-5; Greenlining Petition to Deny at 8-9.
217 See Joint Opposition at 24.
218 See id.
219 See id. at 24-28.
220 See id. at 28-29.
221 See id. at 31.
222 See Nov. 22, 2013 AT&T Initial Response at 43 (citing ATT-FCC-000032674 at 2).
223 See Joint Opposition at 31-32. See also Nov. 22, 2013 AT&T Initial Response at 50-51.
224 See CCA Petition to Condition at 2, 4, 7-12; CCA Reply at 7-9; RWA Comments at i., 2,4-5; RWA Reply at 1-2;
Smith Petition to Deny at 1, 6-8; Smith Reply at 1, 3-4. See also Youghiogheny Communications Jan. 29, 2014 Ex
Parte
at 2.
225 See CCA Petition to Condition at 7-8, 10. See also Youghiogheny Communications Dec. 16, 2013 Ex Parte at 2.
226 See CCA Petition to Condition at 7-8; CCA Reply at 7-8; Smith Petition to Deny at 6.
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consolidation and a resulting duopoly,227 and contends that the Commission should broaden its review to
include the impact of all acquisitions in the wireless marketplace rather than in isolation because a narrow
focus blinds the Commission to the incremental effects of previous cases.228 RWA argues that
competitive harm would result from spectrum concentration in any market with fewer than four providers
and occurs regardless of whether those providers are nationwide providers.229 Public Knowledge argues
that the proposed transaction will increase AT&T’s spectrum holdings in some particular markets.230
63.
The Applicants contend that the post-transaction spectrum aggregation does not result in
competitive concerns, and the Commission’s current spectrum screen “confirms the absence of
competitive harm.”231 The Applicants contend that, concerning the potential competitive effects on the
national level, the instant transaction would affect less than two percent of the spectrum available and
suitable nationwide for mobile services, and in every market involved in this transaction, the four national
carriers already hold spectrum, and there are other spectrum holders that can deploy their spectrum or
make it available for use by other providers.232 The Applicants refer to Dr. Israel’s Declaration, which
concludes that there should not be concern here, where spectrum “is dispersed across other national
carriers, additional licensees have unused spectrum, and a substantial additional amount of spectrum is
about to be licensed.”233
64.
Interoperability. In addition, Youghiogheny Communications and James Jones raise
interoperability-related concerns. Youghiogheny Communications contends that approval of the
proposed transaction should be conditioned on AT&T offering interoperable devices.234 Mr. Jones argues
that the Chicago License should be used for “real world” interoperability testing.235
65.
With respect to interoperability concerns, the Applicants argue that the interoperability
issue is being resolved in the separate proceeding and that any harms relating to interoperability are not
specific to the proposed transaction, particularly since AT&T is not acquiring any 700 MHz spectrum
from Leap (other than the transaction relating to the Chicago License).236
(ii)

Discussion

66.
Discussion. We are not persuaded by certain general arguments raised by petitioners, for

227 See Youghiogheny Communications Jan. 29, 2014 Ex Parte at 2; Youghiogheny Communications Dec. 16, 2013
Ex Parte at 1-2.
228 See Youghiogheny Communications Reply at 3-4. See also Youghiogheny Communications Dec. 16, 2013 Ex
Parte
at 1-2.
229 See RWA Comments at 2-3, 5.
230 See Public Knowledge Petition to Deny at 5-6, Appendix. A - Revised Spectrum Aggregation Chart at 35,
Appendix. B - Competitors Chart at 265-266 (arguing that AT&T will control more than half of all available PCS
spectrum in some markets).
231 See Joint Opposition at 12. See also Joint Opposition at 13-17.
232 See Public Interest Statement at iv, 32-34; Joint Opposition at 10-11. The Applicants also assert that substantial
additional spectrum is planned to be available for mobile services in the near-term, including through the PCS H
Block and broadcast incentive auctions. See Joint Opposition at 12.
233 See Joint Opposition at 14 (citing Israel Declaration at ¶ 45 and Israel Reply Declaration at ¶¶ 49-53).
234 See Youghiogheny Communications Petition to Deny at 24-25.
235 Jones Comments at 2.
236 See Joint Opposition at 43.
29

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instance that the loss of Leap is likely to have significant nationwide competitive effects. Leap offers
facilities-based services in markets covering approximately one-third of the population of the United
States, as well as MVNO services beyond its network footprint, but its nationwide significance has been
declining. Leap generally has a modest market presence today, and with only a handful of exceptions,
each of the four nationwide service providers will continue to compete in the markets where Leap
operates, and in some markets, there is additional competition from regional providers.237 We do find,
however, that there is some potential for competitive harm in certain local markets, and that Leap has
been providing a meaningful alternative for value-conscious consumers through its facilities-based
prepaid service offerings.
67.
Loss of a Maverick Competitor. When evaluating the competitive effects of a
transaction, we consider whether a firm has acted as a “disruptive force,” or “maverick,” providing more
of a competitive constraint in the market than would otherwise be expected of a firm of its size.238 In
general, the elimination of a firm that acts as a disruptive force in a highly concentrated market raises the
likelihood of anticompetitive conduct that might have been constrained before the proposed transaction.239
Based on our evaluation of the record, we find that Leap has not recently been a maverick or a disruptive
force at the national or local level.
68.
When Leap initially entered the wireless market, it was among the first to offer both
prepaid plans and unlimited calling plans. Contrary to petitioners’ arguments, however, our evaluation of
the entire record does not support the proposition that Leap’s actions since then have been disruptive.
Certain petitioners point to Leap’s introduction of the Muve music service, which Leap bundled with
some of its plans, as evidence of this type of disruptive behavior.240 However, there is no support in the
record that Leap’s actions had a significant effect on the industry, and the other providers who once
offered similar services have since ceased doing so. AT&T recently introduced its own streaming music
service, which it offers for an additional fee. But not only did AT&T’s action occur after it agreed to
purchase Leap, it occurred well after Leap’s introduction of the Muve music service.241 Disruptive
behavior usually has a stronger and more immediate effect. For example, on July 10, 2013, T-Mobile
announced a ground-breaking new offer, “Jump!(TM)” which allows T-Mobile subscribers to “upgrade
their phones when they want, up to twice a year as soon as six months from enrollment.”242 In response,
on July 16, 2013, AT&T announced “AT&T Next,” a program providing AT&T subscribers with a new

237 See Public Interest Statement at 32-33.
238 See 2010 DOJ/FTC Horizontal Merger Guidelines, at § 2.1.5 at 3; § 7.1 at 25.
239 See United States v. H&R Block, Inc., No. 11-00948, slip op. at 63 (D.D.C. Nov. 10, 2011) (citing FTC v.
Staples, Inc.
, 970 F. Supp. 1066, 1083 (D.D.C. 1997)); DOJ/FTC Horizontal Merger Guidelines §§ 2.1.5, 7.1; see
also
ABA Section of Antitrust Law, Antitrust Law Developments (6th ed. 2007) at 356 (Antitrust Law Developments
(Sixth)
) (citing 1992 Horizontal Merger Commentary at 24).
240 See, e.g., Smith Petition to Deny at 8; Smith Reply at 7. Further, without more, we do not credit either AT&T’s
or Leap’s then statements that Leap, or companies “like” Leap, has been a maverick or a leading industry innovator.
241 We also note that in February 2013 Leap stated that it intended to spin-off the Muve music service as a separate
company with the hope that other wireless companies would offer the service to their customers, which Leap
believed they might have been unwilling to do while it was a “Leap” product. See Youghiogheny Communications
Petition to Deny at Exhibit B.
242 See T-Mobile Announces Boldest Moves Yet as America's Un-carrier, http://newsroom.t-
mobile.com/phoenix.zhtml?c=251624&p=irol-newsarticle&ID=1836669 (last visited Mar. 12, 2014).
30

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smartphone or tablet every year,243 and, on July 18, 2013, Verizon Wireless announced its own early
update plan, allowing its subscribers to upgrade their devices after six months if 50 percent of the
purchase price has been paid.244
69.
The petitioners point to no other examples of allegedly disruptive behavior by Leap. We
disagree that evidence of a provider striving to compete in the market, for instance,245 or responding to
price changes,246 indicates that a provider is a maverick. In conclusion, we have not found support in the
record for the petitioners’ assertions that Leap has been a competitor that has recently operated as a
maverick or been a disruptive force in the market.
70.
Upward Pricing Pressure. In response to competitive concerns regarding whether the
loss of Leap would materially affect the pricing or other key competitive decisions of the nationwide
wireless providers, we find that, although AT&T and Leap are not each other’s closest substitutes over
Leap’s entire facilities-based service area,247 Leap has provided meaningful choices for certain
consumers, particularly in specific local markets. For instance, the porting rate between AT&T and Leap,
in certain geographic markets, is much higher than the average porting rate between AT&T and Leap
calculated over all markets where Leap has a facilities-based presence. For example, in Pine Bluff, AR
(CMA 291) approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | [END
HIGHLY CONFIDENTIAL INFORMATION]
percent of Leap’s customers port to AT&T and in
Laredo, TX (CMA 281) approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| |
[END HIGHLY CONFIDENTIAL INFORMATION] percent of AT&T’s customers port to Leap.248
Therefore given certain local market characteristics, AT&T and Leap are much closer substitutes in some
markets than they are when aggregated throughout Leap’s facilities-based service areas. However,
porting data alone is not dispositive of potential competitive harms that may arise from a particular
transaction in either local or national markets and any conclusion on the likelihood of competitive harms
for any relevant market requires consideration of other factors.249

243 See AT&T Customers Can Get a New Smartphone or Tablet Every Year With No Down Payment With "AT&T
Next," http://www.att.com/gen/press-room?pid=24538&cdvn=news&newsarticleid=36749&mapcode= (last visited
Mar. 12, 2014).
244 See Verizon gives handset upgrades every 6 months with new Edge program,
http://www.fiercewireless.com/story/verizon-gives-handset-upgrades-every-6-months-new-edge-program/2013-07-
18 (last visited Mar. 12, 2014).
245 See CCA Petition to Condition at 5-6; Smith Reply at 7-8; see also Youghiogheny Communications Petition to
Deny at 17-18; Youghiogheny Reply at 7-9.
246 See Youghiogheny Communications Petition to Deny at 16.
247 [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION]
248 2013 LNP Data. According to the Applicants’ data, in Laredo approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | [END HIGHLY CONFIDENTIAL INFORMATION] percent of
AT&T’s customers port to Leap and approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| |
[END HIGHLY CONFIDENTIAL INFORMATION] percent of AT&T’s prepaid ports go to Leap. See Nov. 22,
2013 AT&T Initial Response Exhibit 25_3_a-c.
249 See AT&T-Qualcomm Order at 17598-99 ¶ 23; Sprint- Nextel Order at 14004-05 ¶ 102.
31

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71.
We are not persuaded that the Applicants’ GUPPI analysis demonstrates that this
transaction presents no, or little, potential competitive harm in terms of upward pricing pressure. As set
out in the 2010 DOJ/FTC Horizontal Merger Guidelines, a GUPPI analysis is one method of assessing
the likelihood of upward pricing pressure that may result from a transaction.250 Generally, adverse
upward pricing pressure is considered unlikely if the GUPPI is less than five percent.251 The GUPPIs
calculated by the Applicants are below five percent for the entire Leap service area, although they are
higher than five percent in select markets. 252 We note, however, the choice of assumptions may
significantly affect the GUPPI results. For example, one key assumption here is the recapture rate used to
calculate the diversion ratio.253 For customers leaving Leap, the Applicants [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
percent recapture rate, which is the share of customers leaving a wireless provider
due to a price increase that switch to another provider within some reasonable period of time.254 If a
higher recapture rate had been assumed, then the GUPPIs would have increased, potentially well above
five percent.255 In addition, while GUPPI analysis may provide evidence of the likelihood of upward
pricing pressure, it is not dispositive of the presence or absence of competitive harms.
72.
Effects on Value-Conscious Consumers. We find that 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 as plan features, call quality, geographic coverage,
and customer service. The record indicates that although Leap’s nationwide importance has been
declining, it serves a valuable function as a low-cost alternative in its footprint and specifically with
respect to the narrower prepaid or “value” segment of the marketplace. In evaluating the potential
competitive harm in this segment, we analyzed the role of Leap in competing against AT&T and other
providers for customers in this market segment, including a review of Leap’s device offerings and pricing
plans as well as consumer preferences for qualities and services for prepaid products. In addition, we
evaluated AT&T’s pre-merger prepaid offerings on GoPhone and Aio Wireless, and how AT&T
positioned these products both in its product portfolio and in the prepaid space. We also took into
account the effect of this merger on market structure and the extent to which choices are eliminated and
consumer welfare harmed. As a result, we have concerns about loss of Leap as a competitor in its
footprint and with respect to the narrower prepaid or “value” segment of the marketplace, and we find that
the potential for competitive harm is more likely in that segment. With respect to concerns generally at
the national level, the record indicates that Leap’s business model has been focused on providing

250 See 2010 DOJ/FTC Horizontal Merger Guidelines, at § 6.1, p. 21.
251 See Carl Shapiro remarks as prepared for the American Bar Association Section of Antitrust Law Fall Forum, at
24 (Nov. 18, 2010), available at http://www.justice.gov/atr/public/speeches/264295.pdf (last visited Mar. 12, 2014).
252 See Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit 4.1 at 10-17, 23. Specifically, the Applicants
calculate GUPPIs of between [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION].
253 The diversion ratio is a measure of buyer substitution that is closely related to the cross price elasticity. See
Applications of AT&T Inc. And Deutsche Telekom AG for Consent to Assign or Transfer Control of Licenses and
Authorizations, WT Docket No. 11-65, Staff Analysis and Findings, 26 FCC Rcd 16184, 16320, Appendix C ¶ 9
(WTB 2011); Gregory J. Werden, 1996, “A Robust Test for Consumer Welfare Enhancing Mergers Among Sellers
of Differentiated Products.” The Journal of Industrial Economics, 44(4), p. 410; CRA Competition Memo, 2010,
http://www.crai.com/uploadedFiles/Publications/Commentary-on-the-GUPPI.pdf (last visited Mar. 12, 2014).
254 See Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit 4.1, at 28.
255 See Jan. 3, 2014 AT&T Second Supplemental Response, Exhibit 4.1 in Response to Request 4, at 28. Changes
in the recapture rate were not part of any sensitivity testing submitted by the Applicants to the Commission.
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facilities-based wireless service in only selected metropolitan areas, and it provides nationwide coverage
through other arrangements.256
73.
Spectrum Aggregation. We address spectrum aggregation issues for specific markets
subject to this transaction in our market-by-market analysis below. All other general spectrum
aggregation concerns are not specific to this transaction.257 As noted above, the Commission is reviewing
its general spectrum holding polices and related competitive issues, in the ongoing mobile spectrum
holdings rulemaking proceeding.258
74.
Interoperability. We also decline to impose the interoperability conditions requested by
Youghiogheny Communications or to mandate the use of the Chicago License requested by Jones. The
proposed interoperability conditions are not narrowly tailored to remedy any purported harms arising out
of this transaction.259 The Commission recently took action to implement an industry solution to provide
interoperable LTE service in the Lower 700 MHz band in an efficient and effective manner to improve
choice and quality for consumers of mobile services.260
b.

Market-by-Market Analysis

75.
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. In undertaking our market-by-market analysis,261 we
consider various competitive variables that help to predict the likelihood of competitive harm post-
transaction. These competitive variables include, but are not limited to: the total number of rival service

256 See Public Interest Statement, Hutcheson Declaration at ¶ 3. According to Leap, it approached a significant
number of other potential strategic acquirers and wireless providers throughout the past several years regarding
business combination transactions, conversion to an MVNO model combined with an asset or spectrum sale,
network sharing transactions, the sale of under-performing markets and the sale of all or substantially all of Leap’s
spectrum. Leap concluded that none of these approaches resulted in a meaningful interest by or negotiations with
such potential acquirers. See Leap Wireless International, LLC, SEC Schedule 14A, at 36 (filed Sep. 17, 2013),
available at http://www.sec.gov/Archives/edgar/data/1065049/000119312513368430/d575780ddefm14a.htm (last
visited Mar. 11, 2014). See also Public Interest Statement, Hutcheson Declaration at ¶¶ 12-13.
257 Concerning Public Knowledge’s claim that post transaction AT&T will hold more than half of the PCS spectrum,
we note that our analysis (and Applicants') records indicate that post transaction, AT&T will not hold that amount of
the PCS spectrum in any market identified by Public Knowledge.
258 See Mobile Spectrum Holdings NPRM, 27 FCC Rcd at 11725-28 ¶¶ 33-39.
259 See AT&T-ATN Order, 28 FCC Rcd at 13704 ¶¶ 62-63 (rejecting request to place interoperability conditions on
AT&T because alleged harms were not transaction-specific).
260 See Promoting Interoperability in the 700 MHz Commercial Spectrum, Requests for Waiver and Extension of
Lower 700 MHz Band Interim Construction Benchmark Deadlines, WT Docket Nos. 12-69, 12-332, Report and Order
and Order of Proposed Modification
, 28 FCC Rcd 15122 (2013). See also Promoting Interoperability in the 700 MHz
Commercial Spectrum, WT Docket No. 12-69, Order of Modification, 29 FCC Rcd 281 (WTB 2014) (modifying
AT&T’s Lower 700 MHz B and C Block licenses consistent with the Report and Order and Order of Proposed
Modification
).
261 We derive market shares and HHIs from our analysis of data compiled in our 2013 NRUF and LNP database.
We derive network coverage from Mosaik January 2014 data and 2010 U.S. Census data, and we obtain spectrum
holdings from our licensing databases and the Applications. In addition, we examine porting data from our 2013
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.
33

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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. Further, in the instant transaction, AT&T is
acquiring AWS-1 spectrum in the majority of the CMAs, and consistent with Commission precedent, we
also consider the potential competitive effect of the proposed transaction on those local markets where
AT&T would hold a substantial amount of AWS-1 spectrum post-transaction.262
76.
Concerning the markets that were identified by the initial HHI and the spectrum screens
and other spectrum and competitive concerns, after careful evaluation of the competitive effects in each
market, we find that the potential for competitive harm is unlikely in the majority of these markets. For
the markets identified below, however, we undertake a further market-by market review to examine the
competitive landscape and evaluate whether competitive harm is likely in any of these local markets.
(i)

San Diego and the California Central Valley

77.
Record. Greenlining asserts that it is concerned about the effect of the proposed
transaction on competition in local markets where the Cricket band has a strong presence, particularly in
San Diego and California’s Central Valley because the markets are home to large minority populations.263
78.
The Applicants claim that Greenlining does not provide an explanation or supporting
evidence for their competitive concerns.264 The Applicants contend that there will be no adverse local
impact in California because four national carriers will continue to compete vigorously in those markets
with sufficient spectrum to expand service.265 The Applicants argue that Sprint has a significant share of
subscribers in the markets at issue, and T-Mobile's estimated share is approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | [END HIGHLY CONFIDENTIAL INFORMATION]
percent or greater in San Diego, CA (CMA 18), Fresno, CA (CMA 74), Modesto, CA (CMA 142), and
California 4 – Madera (CMA 339).266 The Applicants assert that T-Mobile has also introduced MetroPCS
service in San Diego and Fresno, thus intensifying competition in value-conscious offerings.267 Further,
according to the Applicants, MetroPCS has a strong presence in Modesto, has added at least 40 retail
locations in the Central Valley, and has almost 100 retail locations in the San Diego market, an area it did
not previously serve.268
79.
AT&T states that it agreed to commitments with the California Public Utilities
Commission that, for a period of 18 months after closing, Cricket will offer a $40 per month (including
all taxes and fees) feature phone prepaid plan featuring unlimited talk, text, and data and no roaming

262 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd 10698.
263 See Greenlining Petition to Deny at 8-9 (noting concern in the California counties of San Joaquin, Stanislaus,
Merced, Madera, Fresno, Kings, Tulare, and Kern within the Central Valley). These counties are encompassed by
the following CMAs: Fresno, CA (CMA 74); Bakersfield, CA (CMA 97); Stockton, CA (CMA 107); Modesto, CA
(CMA 142); Visalia-Tulare-Porterville, CA (CMA 150); California 4 – Madera (CMA 339); and California 12 –
Kings (CMA 347). We note that no assets are being assigned as part of this transaction in Bakersfield or Stockton.
264 See Joint Opposition at 38.
265 See id. at ii, 38.
266 See id. at 38.
267 See id.
268 See id.
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charges to new and existing customers in California.269 Further, AT&T states that it intends to offer the
same $40 per month prepaid plan wherever the Cricket brand is available nationwide during the same 18-
month period.270 In response, Greenlining states that, based on AT&T and Leap's assurances both in the
documents submitted to the California Public Utilities Commission and as a result of discussions between
the Parties, Greenlining is satisfied that the Applicants’ commitments will help mitigate the proposed
transaction's potential public interest harms.271
80.
Discussion. We here conduct our market-specific review of six CMAs in California that
are triggered by the initial screen. Four of these CMAs – San Diego, Fresno, Modesto, and California 12
– Kings (CMA 347) – are non-rural markets with populations ranging from 153,000 to 3.1 million and
with population densities of 110 to 736 people per square mile. The other two CMAs – Visalia-Tulare-
Porterville, CA (CMA 150) and California 4 – are rural markets with populations of approximately
442,000 and 462,000, respectively, and population densities of 92 and 85 people per square mile. All six
CMAs trigger the HHI screen,272 and Modesto and California 4 trigger the spectrum screen as well.273
81.
Post-transaction, AT&T would hold [BEGIN HIGHLY CONFIDENTIAL

INFORMATION]

| | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] percent in
these six California markets.274 With the exceptions of San Diego and Modesto, Leap currently holds a
significant market share in these CMAs.275 In all of the CMAs except for Visalia-Tulare-Porterville, the
other three nationwide providers have significant market share.276 In these six markets, the share of

269 See Joint Opposition at 6-7 (citing Letter from J. David Tate, General Attorney & Associate General Counsel,
AT&T, to Ryan Dulin, Director, Communications Division, California Public Utilities Commission, re Notice by
AT&T Inc. of Proposed Indirect Transfer of Control of Cricket Communications, Inc. (U-3076- C) at 6 (Oct. 8,
2013)).
270 See Joint Opposition at 7.
271 See Letter from Orson Aguilar, Executive Director, Greenlining Institute to Marlene H. Dortch, Secretary Federal
Communications Commission, WT Docket 13-193 (filed Nov. 4, 2013).
272 The post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] in San Diego, Fresno, Visalia-Tulare-
Porterville, and California 12, respectively and the change in the HHI would be [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
in these respective CMAs.
273 The post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | |
[END HIGHLY CONFIDENTIAL INFORMATION] in Modesto and California 4, respectively and the change
in the HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
in these respective CMAs. Post-transaction, AT&T would hold 156
megahertz of spectrum in Modesto and 151-166 megahertz of spectrum in California 4.
274 Post-transaction, AT&T would hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], in San Diego,
Fresno, Modesto, Visalia-Tulare-Porterville, California 4, and California 12, respectively.
275 Leap holds [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | [END HIGHLY CONFIDENTIAL INFORMATION] percent in San Diego, Fresno, Modesto, Visalia-Tulare-
Porterville, California 4, and California 12, respectively.
276 In San Diego, CA, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
respectively. In Fresno, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
respectively. In Modesto, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
(continued….)
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AT&T’s customers porting to Leap generally tracks the average percentage of ports calculated by the
Applicants.277 However, the share of Leap’s customers porting to AT&T in several of these markets is
substantially higher than the average calculated by the Applicants.278 In terms of population coverage, the
transaction would result in a decrease from five to four providers with significant 3G coverage.279 In
terms of land area coverage, the number of providers with significant 3G land area coverage falls from
four to three in Modesto and from three to two in Fresno and California 12. 280 There is no change in San
Diego, Visalia-Tulare-Porterville, and California 4 because Leap does not have significant land area 3G
coverage in those CMAs.281 Because Leap has not deployed an LTE network in any of these markets,
there is no change in the number of providers with significant LTE population or land area coverage.282
82.
In San Diego, Fresno, Visalia-Tulare-Porterville, and California 12, AT&T would hold
140 to 148 megahertz of spectrum. Further in these CMAs, the other significant providers hold between
40 and 114 megahertz of spectrum.283 In Modesto and California 4, AT&T would hold 156 megahertz
(Continued from previous page)

INFORMATION]

| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In Visalia-Tulare-Porterville, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In California 4, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In California 12, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
277 In these six CMAs [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
of AT&T’s customers port to Leap. See 2013 LNP Data.
278 In these six CMAs [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
of subscribers port from Leap to AT&T. See 2013 LNP Data.
279 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 the market. See AT&T-ATN
Order
, 28 FCC Rcd at 13704 ¶ 43; T-Mobile-MetroPCS Order, 28 FCC Rcd at 2339 ¶ 50 n.119; AT&T-Verizon
Wireless Order
, 25 FCC Rcd at 8733 ¶ 65. In San Diego, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all
cover more than 94% of the population. In Fresno, Modesto, and Visalia-Tulare-Porterville, AT&T, Leap, Verizon
Wireless, Sprint, and T-Mobile all cover more than 85% of the population. In California 4 and California 12,
AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover more than 75% of the population.
280 In Fresno, AT&T, Leap, and Verizon Wireless have significant 3G land area coverage of 66%, 51%, and 72%,
respectively. In Modesto, AT&T, Leap, Verizon Wireless, and T-Mobile have significant 3G land area coverage of
72%, 63%, 83%, and 61%, respectively. In California 12, AT&T, Leap, and Verizon Wireless have significant 3G
land area coverage of approximately 99%, 85%, and 100%, respectively.
281 In Visalia-Tulare-Porterville, AT&T and Verizon Wireless have significant 3G land area coverage of 50% and
64%, respectively. In California 4, AT&T and Verizon Wireless have significant 3G land area coverage of 69% and
83%, respectively. In San Diego, AT&T, Verizon Wireless, and T-Mobile all have significant 3G land area
coverage of 83%, 82%, and 58%, respectively.
282 In San Diego, AT&T, Verizon Wireless, Sprint, and T-Mobile have deployed LTE networks covering 97%, 99%,
96%, and 96% of the population, respectively, and 45%, 72%, 32%, and 41% of the land area, respectively. In
Fresno, Modesto, Visalia-Tulare-Porterville, and California 4, AT&T, Verizon Wireless, and T-Mobile have
deployed LTE networks covering 76 to 100%, 99 to 100%, 58 to 99%, and 74 to 99% of the population,
respectively, and 16 to 64%, 65 to 83%, 19 to 51%, and 45 to 76% of the land area, respectively. In California 12,
AT&T and Verizon Wireless have deployed LTE networks covering approximately 74% and 100% of the
population, respectively, and approximately 75% and 100% of the land area, respectively.
283 In San Diego, Fresno, Visalia-Tulare-Porterville, and California 12, Verizon Wireless holds 97 to 114 megahertz,
Sprint holds 98.5 to 114 megahertz, and T-Mobile holds 40 to 65 megahertz of spectrum.
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and 151 to 166 megahertz, respectively. In these two markets, the other significant providers hold
between 40 and 109 megahertz of spectrum.284
83.
Based on our analysis of the market-specific factors of these six CMAs, we find, first,
that the potential for competitive harms in San Diego is unlikely because Leap is neither a significant
provider nor does it cover a significant portion of the land area of the CMA. We also find there is not
likely to be any substantial competitive harms in the Fresno, Modesto, California 4, and California 12
markets as a result of market concentration. Although Leap is a significant provider in three of these four
markets, in all four CMAs post-transaction, there would be three additional providers besides the merged
entity with significant market share and significant 3G population coverage, and one or two additional
providers with significant LTE population coverage. In Visalia-Tulare-Porterville, the sixth CMA, we
find on balance only a limited likelihood for competitive harms as a result of market concentration.
Although the likelihood of competitive harms is greater than in the other markets because AT&T’s post-
transaction market share is greater and there are only two other providers with significant market share,
we note that three additional providers will remain that cover a significant portion of the CMA population
with 3G and two other providers have deployed LTE networks. Finally, after reviewing the two CMAs
triggered by the spectrum screen, we conclude that spectrum divestitures here are not necessary to address
the potential that AT&T’s post-transaction spectrum aggregation would raise rivals’ costs in Modesto or
California 4.285
(ii)

South Texas Markets

84.
Youghiogheny Communications claims that AT&T’s acquisition of Leap in certain south
Texas markets would harm competition and consumers in these markets.286 Youghiogheny
Communications argues that in south Texas, post-transaction, AT&T would exceed the spectrum screen
in certain markets.287 Public Knowledge contends that post-transaction AT&T would hold 50 megahertz
or 56 percent of AWS-1 spectrum in McAllen, Edinburg-Mission, TX (CMA 128).288 Further,
Youghiogheny Communications claims that Leap has a large market share in many of the south Texas
CMAs289 and that the HHI screen is triggered in 11 out of 12 of the markets in and proximate to south

284 In Modesto, Verizon Wireless, Sprint, and T-Mobile hold 89, 103.85, and 75 megahertz of spectrum, respectively
and in California 4, they hold 89 to 109, 103.85 to 104, and 40 to 80 megahertz of spectrum, respectively. In both of
these CMAs, the only paired spectrum remaining is 10 megahertz held by Aloha. An application has been filed
assigning this spectrum from Aloha to AT&T. See ULS File No. 0006065982.
285 We note, however, that AT&T currently has on file another application in which it is proposing to acquire
additional spectrum in five of the CMAs analyzed above (the exception being San Diego). See ULS File No.
0006065982.
286 See Youghiogheny Communications Petition to Deny at 15-17; IAE Declaration at 22; IAE Feb. 28, 2014 Ex
Parte
at 4.
287 See Youghiogheny Communications Petition to Deny at 6.
288 See Public Knowledge Petition to Deny at 6.
289 See Youghiogheny Communications Petition to Deny at 15. These markets include San Antonio, TX (CMA 33),
Corpus Christi, TX (CMA 112), McAllen-Edinburg-Mission, TX (CMA 128), Brownsville-Harlingen, TX (CMA
162), and Laredo, TX (CMA 281), with Leap’s market shares ranging from approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | [

END HIGHLY CONFIDENTIAL INFORMATION]

percent in San
Antonio to[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | [

END HIGHLY CONFIDENTIAL
INFORMATION]

percent in Laredo.
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Texas.290 Youghiogheny Communications contends that the transaction would create a classic duopoly in
south Texas between AT&T and Sprint,291 and a duopoly of AT&T and Verizon Wireless in the provision
of LTE services as a result of their substantial below 1 GHz spectrum holdings.292 Other providers in
these markets face barriers to entry because only AT&T and Verizon Wireless hold significant amounts
of below 1 GHz spectrum.293 Youghiogheny Communications asserts that in the past, direct head-to-head
competition in the south Texas markets resulted in lower prices for prepaid mobile services, as well as a
more extensive network coverage area by Leap.294
85.
The Applicants claim that there is no harm from spectrum aggregation in the south Texas
markets based on total amount of spectrum held by the nationwide providers, other spectrum held by
other licensees, and that the Commission will be auctioning the PCS H Block and 600 MHz spectrum in
the coming year.295 The Applicants argue that all four nationwide providers offer service in south Texas
and competition will continue to be vibrant post-transaction.296 In particular, the Applicants argue that
Sprint is a strong competitor based on its market share.297 In addition, the Applicants contend that Leap’s

290 See Youghiogheny Communications Petition to Deny at 15, 26-27; IAE Declaration at 19, Appendix B;
Youghiogheny Communications Reply at 2-3. The markets included in Youghiogheny Communications’ analysis
are 11 Texas CMAs: San Antonio, Corpus Christi, McAllen-Edinburg-Mission, Brownsville-Harlingen, Galveston-
Texas City, TX (CMA 170), Laredo, Victoria, TX (CMA 300), Texas 15 – Concho (CMA 666), Texas 18 –
Edwards (CMA 669), Texas 19 – Atascosa (CMA 670), and Texas 20 – Wilson (CMA 671) as well as Lake Charles,
LA (CMA 197). Further, the petitioner claims that Leap is the dominant pre-paid provider in south Texas. See
Youghiogheny Communications Petition to Deny at 15.
291 See Youghiogheny Communications Petition to Deny at 26; IAE Declaration at 21, Exhibit B; Youghiogheny
Communications Reply at 3, 10-11. Youghiogheny Communications claims that AT&T’s and Sprint’s combined
market shares would be as high as [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | [

END HIGHLY
CONFIDENTIAL INFORMATION]

percent of the market. See Youghiogheny Communications Petition to Deny
at 26.
292 See IAE Declaration at 21
293 See IAE Declaration at 20.
294 See Youghiogheny Communications Petition to Deny at 16. This competition was between Leap and Pocket
Communications, LLC (“Pocket”), prior to Leap and Pocket, Punxsutawney Communications, LLC, Elitel, Inc. and
certain of their affiliates forming a joint venture in 2010. See ULS file nos. 00041469410 and 00041694237. Leap
holds an approximate 75.75% interest in the joint venture and Paul Posner holds approximately 24.25 % in the joint
venture and holds a 100% interest in Youghiogheny Communications, LLC. See Form 602, STX Wireless, filed
May 16, 2012.
295 See Joint Opposition at 15-17. The Applicants specifically analyze Corpus Christi, TX (CMA 112), McAllen-
Edinburg-Mission, TX (CMA 128), and Brownsville-Harlingen, TX (CMA 162). See Joint Opposition at 15-16,
n.53. The Applicants claim that this analysis would apply to a broader definition of south Texas that would include
11 Texas CMAs. See Joint Opposition at 37, n.136 (citing IAE Declaration at 31-32, Appendix B; Israel Reply
Declaration at ¶ 61 n. 100).
296 See Joint Opposition at 33-34; Israel Reply Declaration at 35. According to the Applicants, the market shares of
the four nationwide competitors in the south Texas CMAs are never smaller than [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | [

END HIGHLY CONFIDENTIAL INFORMATION]

percent in any
of the five South Texas CMAs. See Israel Reply Declaration at 35 n.101.
297 See Joint Opposition at 34-35; Israel Reply Declaration at 35. Sprint has approximately a [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | [

END HIGHLY CONFIDENTIAL INFORMATION]

percent market
share in the south Texas region. See Joint Opposition at 34; Israel Reply Declaration at 35.
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market share has declined significantly in the south Texas CMAs,298 and this decline implies that it would
be an even less effective competitor as a standalone company in the future than it is today.299 Further, the
Applicants argue that T-Mobile has launched the MetroPCS brand in south Texas and is targeting Leap
customers and will compete aggressively against AT&T post-transaction.300
86.
Youghiogheny Communications argues that the Applicants’ analysis of the south Texas
markets is misleading because they point to Sprint as a strong competitor and Leap as a competitor in
decline, whereas the data shows that there was an equal or greater decline in Sprint’s market share for the
same time period.301
87.
Discussion. As a result of our case-by-case analysis of the south Texas markets,
including those markets discussed in the Youghiogheny Communications petition,302 we conclude that the
instant transaction would likely result in competitive harm in certain markets in Texas. We analyze the
twelve Texas CMAs in three groups. In four CMAs we conclude that there is the potential of harm from
the loss of a strong facilities-based provider.303 In an additional four CMAs we conclude that AT&T’s
post-transaction spectrum aggregation would result in an increased likelihood of foreclosure or of raising
rivals’ costs.304 In the remaining four markets, we find that competitive harm is unlikely.305 The
following analyzes the market-specific facts leading to these conclusions.
88.
The first four CMAs, Laredo, TX (CMA 281), Texas 18 – Edwards (CMA 669), Texas
19 – Atascosa (CMA 670), and Texas 20 – Wilson (CMA 671), raise the most significant concerns. They
are rural markets with populations ranging from approximately 169,000 to 252,000, and population
densities ranging from 14 to 74 people per square mile.306 These four CMAs are located in South Texas
and are contiguous. All four markets were identified by both the HHI screen307 and the spectrum

298 According to the Applicants, between March 31, 2012 and June 30, 2012, Leap lost approximately [BEGIN
HIGHLY CONFIDENTIAL INFORMATION]
| | | [

END HIGHLY CONFIDENTIAL INFORMATION]

of its
subscribers in the five south Texas CMAs and [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [

END
HIGHLY CONFIDENTIAL INFORMATION]

of its subscribers in the 11 Texas CMAs listed in Information
Age Economics’ Appendix B. See IAE Declaration at Exhibit B.
299 See Israel Reply Declaration at 36.
300 See Joint Opposition at 35-36; Israel Reply Declaration at 36. According to the Applicants, there is a notable
increase in Leap’s port outs to T-Mobile/MetroPCS in south Texas since MetroPCS’s launch. See Joint Opposition
at 36; Israel Reply Declaration at 36, Figure 2.
301 See Youghiogheny Communications Reply at 9-10.
302 See Youghiogheny Communications Petition to Deny at 6, 7, 14-18, Exhibit A. Lake Charles, LA (CMA 197) is
analyzed below in the other market section.
303 These four CMAs are Laredo, Texas 18, Texas 19, and Texas 20.
304 These four CMAs are Beaumont-Port Arthur, TX (CMA 101), Corpus Christi, McAllen-Edinburg-Mission, TX,
and Brownsville-Harlingen.
305 These four CMAs are Galveston-Texas City, San Antonio, Victoria, and Texas 15.
306 2010 U.S. Census data. Rural is defined as 100 people or less per square mile.
307 The post-merger HHI in Laredo would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | |
[END HIGHLY CONFIDENTIAL INFORMATION], with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | [END HIGHLY CONFIDENTIAL INFORMATION], in Texas 18 the post-merger
HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | [END HIGHLY CONFIDENTIAL INFORMATION], in Texas 19, the post-merger
(continued….)
39

Federal Communications Commission

DA 14-349

screen.308 In terms of market share, post-transaction AT&T would have approximately [BEGIN
HIGHLY CONFIDENTIAL INFORMATION]
| | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
percent to [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
percent of subscribers in these markets.309 Indeed, in
each of these CMAs, AT&T’s market share would be approximately two to five times larger than the
provider with the second largest market share.310 In Laredo and Texas 19, the other three nationwide
providers have significant market share,311 while in Texas 18 and Texas 20, two of the other three
nationwide providers have significant market share.312 In each of these four CMAs, there are no
additional facilities-based providers with significant share. Also, in these four CMAs, the percent of
customers porting from AT&T to Leap range from approximately [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] percent, which is
higher than the average reported by the Applicants. The percentage of ports from Leap to AT&T is
approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | [END HIGHLY
(Continued from previous page)
HHI would be[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
, with a change of [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
, and in Texas 20, the post-merger HHI, would be [BEGIN
HIGHLY CONFIDENTIAL INFORMATION]
| | | | | [END HIGHLY CONFIDENTIAL INFORMATION]
with a change of [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END HIGHLY
CONFIDENTIAL INFORMATION]
.
308 Post-transaction, AT&T would hold 156 megahertz of total spectrum, including 40 megahertz of AWS-1, in
Laredo; in Texas 18, 138-168 total megahertz of spectrum, including 40-50 megahertz of AWS-1; in Texas 19, 126-
156 total megahertz of spectrum, including 20-50 megahertz of AWS-1; and in Texas 20, 125-160 total megahertz
of spectrum, including 20 to 30 megahertz of AWS-1.
309 In Laredo, AT&T and Leap have [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | |
[END HIGHLY CONFIDENTIAL INFORMATION] market shares, respectively; in Texas 18, AT&T and Leap
have [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, respectively; in Texas 19, AT&T and Leap have [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
respectively and in Texas 20, AT&T and Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | |
| | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION]respectively.
310 In Laredo, AT&T’s share would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
times as large as the next largest provider; in Texas 18, AT&T’s
share would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END HIGHLY CONFIDENTIAL
INFORMATION]
times as large, in Texas 19, AT&T’s share would be [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION] times as large and in Texas 20,
AT&T’s share would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END HIGHLY
CONFIDENTIAL INFORMATION]
times as large.
311 In Laredo, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In Texas 19, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
312 In Texas 18, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In Texas 20, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
40

Federal Communications Commission

DA 14-349

CONFIDENTIAL INFORMATION]

percent, which is substantially higher than the average reported
by the Applicants.313
89.
The loss of consumer choice in available network services varies across these four
CMAs. The number of providers with significant 3G population coverage would decrease from five to
four in Laredo, from four to three in Texas 19 and Texas 20, and from three to two in Texas 18.314 In
terms of land area coverage, the number of 3G providers would be unchanged in Laredo, Texas 18 and
Texas 19, and would decrease from three to two providers in Texas 20.315 In terms of LTE coverage, the
number of providers covering a significant portion of the population would decrease from five to four in
Laredo; there would be no change in Texas 18, Texas 19, or Texas 20, with no provider having significant
LTE population coverage in Texas 19.316 In terms of LTE land area coverage, there would be no change
in the number of providers with significant land area coverage in these CMAs, with no provider having
significant land area coverage in three of the four CMAs.317
90.
The spectrum screen is triggered in all four of these CMAs. In Laredo post-transaction,
AT&T would be five megahertz over the screen. In Texas 18 post-transaction, AT&T would be over the
screen by two to 17 megahertz on a county-by-county basis.318 In Texas 20, AT&T would be over the
screen by nine megahertz in three counties, one megahertz below the screen in two additional counties,
and 26 megahertz below the screen in the remaining three counties.319 In Texas 19 post-transaction,
AT&T would be over the screen by five megahertz in two out of the 12 counties in the CMA, which
account for approximately 33 percent of the CMA population and 14 percent of the CMA land area. In

313 Using LNP (Applicant) data provided by AT&T, ports from AT&T to Leap are [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
% for Laredo, Texas 18, Texas 19, and Texas 20, respectively. Using 2013
LNP data, ports from Leap to AT&T are [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | |
| | | | [END HIGHLY CONFIDENTIAL INFORMATION] % for Laredo, Texas 18, Texas 19, and Texas 20,
respectively. Further, using Applicant data, ports by AT&T’s pre-paid customers to Leap were approximately
[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
% for Laredo, Texas 18, Texas 19, and Texas 20, respectively.
314 In Laredo, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover more than 90% of the population with
3G. In Texas 19 and Texas 20, AT&T, Leap, Verizon Wireless, and Sprint all cover more than 70% of the
population with 3G. In Texas 18, AT&T, Leap and Sprint cover more than 85% of the population with 3G.
315 In Laredo, AT&T, Verizon Wireless, and Sprint all cover more than 75% of the land area with 3G. In Texas 18,
AT&T covers approximately 90% of the land area with 3G. In Texas 19, AT&T and Verizon Wireless cover more
than 70% of the land area with 3G. In Texas 20, AT&T, Leap, and Verizon Wireless cover 50% or more of the land
area with 3G.
316 In Laredo, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover more than 90% of the population with
LTE, in Texas 18, Sprint covers more than 85%, and in Texas 20, Verizon Wireless and Sprint cover more than
80%. In Texas 19, Sprint has the most extensive LTE population coverage of approximately 58 percent.
317 In Laredo, Verizon Wireless has the most extensive LTE land area coverage of approximately 22%. In Texas 18
- Edwards, Sprint has the most extensive LTE land area coverage of approximately 36%. In Texas 19, Verizon
Wireless has the most extensive LTE land area coverage of approximately 26%. In Texas 20, Verizon Wireless and
Sprint cover 60% or more of the land area.
318 AT&T would be over the 151 megahertz screen by 2 megahertz in two counties, by 7 megahertz in five counties,
by 12 megahertz in 3 counties and by 17 megahertz in 1 county, and over the 132 megahertz screen (BRS is not
available in this county) by 6 megahertz in 1 county.
319 The three counties where AT&T would be 26 megahertz below the screen reflect approximately 29% of the
population and 40% of the land area, respectively.
41

Federal Communications Commission

DA 14-349

the remaining 10 counties AT&T would be below the screen by 15 to 25 megahertz. The three other
nationwide providers hold 30 to 131.5 megahertz in these four CMAs, and there are additional licensees
in each of these CMAs that hold spectrum.320
91.
In all four of these CMAs, an analysis of market-specific factors indicates that the
acquisition of Leap by AT&T may result in competitive harms. In each of these CMAs, Leap has had
significant market share, with substantially more share in some of these CMAs, AT&T’s post-transaction
market share would be large, and there is a reduction in the number of significant facilities-based
providers. In the three rural CMAs, the number of providers with significant 3G population coverage,
which now can be considered baseline wireless coverage, would decrease from four to three or, in Texas
18, from three to two. In Laredo, we note that Leap’s share is not much lower than AT&T’s share and
Leap covers a significant portion of the CMA population with LTE. The loss of such a strong
independent facilities-based provider in the Laredo market may result in potential competitive harm,
particular to the value-conscious consumer.
92.
In the second group of four CMAs in south Texas, we conclude that potential competitive
harm is limited to AT&T’s post-transaction spectrum aggregation, which would result in an increased
likelihood of foreclosure or of raising rivals’ costs. Beaumont-Port Arthur, TX (CMA 101), Corpus
Christi, TX (CMA 112), McAllen-Edinburg-Mission, TX (CMA 128), and Brownsville-Harlingen, TX
(CMA 162) are non-rural markets with populations ranging from approximately 390,000 to 775,000 and
population densities ranging from 185 to 493 people per square mile. Corpus Christi, McAllen-Edinburg-
Mission, and Brownsville-Harlingen were identified by both the HHI screen321 and the spectrum screen.322
Beaumont-Port Arthur was identified only by the spectrum screen. Post-transaction, AT&T would hold
between [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
percent market share in these four CMAs.323 In Corpus Christi,

320 Verizon Wireless holds 52 to 104 megahertz of spectrum in these four CMAs, Sprint holds 75.5-131.5
megahertz, and T-Mobile holds 30-60 megahertz. AT&T also would hold 40 megahertz of AWS-1 spectrum in
Laredo, 40 to 50 megahertz in Texas 18, 20 to 50 megahertz in Texas 19, and 20-30 megahertz in Texas 20. In these
four CMAs, Verizon Wireless holds 0-30 megahertz of AWS-1 and T-Mobile holds 20-30 megahertz.
321 The post-transaction HHI in Beaumont-Port Arthur would be [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | [END HIGHLY CONFIDENTIAL INFORMATION], with a change of [BEGIN
HIGHLY CONFIDENTIAL INFORMATION]
| | [END HIGHLY CONFIDENTIAL INFORMATION], in
Corpus Christi the post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | |
[END HIGHLY CONFIDENTIAL INFORMATION], with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION], in McAllen-Edinburg-Mission the
post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION], and in Brownsville-Harlingen, the
post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION].
322 Post-transaction, AT&T would hold 175 megahertz of total spectrum, including 30 megahertz of AWS-1 in
Beaumont-Port Arthur, 170 megahertz of total spectrum, including 40 megahertz of AWS-1 in Corpus Christi, 180
megahertz of total spectrum, including 50 megahertz of AWS-1 in McAllen-Edinburg-Mission, and 180 megahertz
of total spectrum, including 50 megahertz of AWS-1 in Brownsville-Harlingen.
323 In Beaumont-Port Arthur, AT&T and Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | |
| | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively; in Corpus Christi, AT&T and
Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, respectively; in McAllen-Edinburg-Mission, AT&T and Leap hold
[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
(continued….)
42

Federal Communications Commission

DA 14-349

McAllen-Edinburg-Mission, and Brownsville-Harlingen, the number of providers with significant market
share would fall from five to four, and there is no change in Beaumont-Port Arthur. In each of these four
CMAs, the other three nationwide providers have significant market share.324 Also, in these four CMAs,
the percent of customers porting from AT&T to Leap range from approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
which for some CMAs generally tracks the average percentage of ports calculated by the Applicants and
is higher in other CMAs. Also, in these four CMAs, the percent of customers porting from Leap to AT&T
range from approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
percent,325 which generally tracks the average
percentage of ports calculated by the Applicants.
93.
In terms of coverage, the proposed transaction would result in a decrease from five to
four in the number of providers with significant 3G population and land area coverage in Corpus Christi,
McAllen-Edinburg-Mission, and Brownsville-Harlingen.326 In terms of LTE population coverage in these
three CMAs, this would decrease the number of providers from five to four in Corpus Christi and
Brownsville-Harlingen, and from four to three in McAllen-Edinburg-Mission.327 LTE land area coverage
also would decline in these three CMAs from five to four providers in Brownsville-Harlingen, from four
to three providers in Corpus Christi, and from three to two providers in McAllen-Edinburg-Mission.328 In
Beaumont-Port Arthur, there would be a reduction from five to four providers in terms of 3G population
(Continued from previous page)

INFORMATION]

, respectively; and in Brownsville-Harlingen, AT&T and Leap hold [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
respectively.
324 In Beaumont-Port Arthur, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively;
in Corpus Christi, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively;
in McAllen-Edinburg-Mission, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [

END HIGHLY CONFIDENTIAL
INFORMATION]

, respectively; and in Brownsville-Harlingen, Verizon Wireless, Sprint, and T-Mobile hold
[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, respectively.
325 Using 2013 LNP (Applicant) data, ports from AT&T to Leap are [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
% for Beaumont-Port Arthur, Corpus Christi, McAllen-Edinburg-Mission, and Brownsville-
Harlingen, respectively. Using 2013 LNP data, ports from Leap to AT&T are [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION]
% for Beaumont-Port Arthur, Corpus Christi, McAllen-Edinburg-Mission, and Brownsville-Harlingen, respectively.
Further using Applicant data, ports by AT&T’s pre-paid customers to Leap were approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION]
% for Beaumont-Port Arthur, Corpus Christi, McAllen-Edinburg-Mission, and Brownsville-Harlingen, respectively.
326 In Corpus Christi, McAllen-Edinburg-Mission, and Brownsville-Harlingen, AT&T, Leap, Verizon Wireless,
Sprint and T-Mobile cover at least 90 % of the population and 51 % of the land area with 3G.
327 In Corpus Christi and Brownsville-Harlingen, AT&T, Leap, Verizon Wireless, Sprint and T-Mobile cover at
least 75 % of the population with LTE. In McAllen-Edinburg-Mission, AT&T, Leap, Verizon Wireless and T-
Mobile cover at least 84% of the population with LTE.
328 In Brownsville-Harlingen, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least 55% of the land
area with LTE; in Corpus Christi, AT&T, Leap, Verizon Wireless, and Sprint, cover at least 54%; and in McAllen-
Edinburg-Mission, AT&T, Leap, and Verizon Wireless cover at least 53%.
43

Federal Communications Commission

DA 14-349

coverage and no change in terms of either 3G land area or LTE population and land area coverage.329
94.
The spectrum screen is triggered throughout Beaumont-Port Arthur and Corpus Christi
and in parts of McAllen-Edinburg-Mission and Brownsville-Harlingen. Post-transaction, AT&T would
hold 170 to 175 megahertz throughout Beaumont-Port Arthur and Corpus Christi. The other four
nationwide providers also hold spectrum throughout these CMAs. Specifically, Verizon Wireless holds
77 to 92 megahertz in these four CMAs, Sprint holds 99 to 111.5 megahertz, and T-Mobile holds 45 to 70
megahertz. Therefore post-transaction, AT&T would hold 1.8 to 2.3 times as much spectrum in these
CMAs as Verizon Wireless, 1.6 to 1.8 times as much as Sprint, and 2.6 to 3.9 times as much as T-Mobile.
Although there are a few other licensees, the amount of spectrum not deployed for mobile wireless
services is limited.330 In three of these CMAs, AT&T would hold 40-50 megahertz of AWS-1 spectrum
and the remaining 40-50 megahertz is held by Verizon Wireless and T-Mobile.331
95.
In Beaumont-Port Arthur, Corpus Christi, McAllen-Edinburg-Mission, and Brownsville-
Harlingen, a review of market factors indicates that this transaction is unlikely to result in significant
competitive harm from a loss of a competitor, but that the transaction could potentially raise rivals costs
in these markets due to AT&T’s spectrum aggregation of 19 to 29 megahertz over the screen. AT&T’s
spectrum holdings in these markets are substantially higher than the spectrum holdings of the other
significant market participants by a magnitude of at least 1.5. Further, the amount of spectrum held by
other licensees in this market that have not deployed mobile wireless services is extremely limited.
Therefore, the ability of the other significant providers to expand capacity or deploy new and innovative
services would likely be harmed by the amount of spectrum held by the merged entity.
96.
We find no likelihood of competitive harm in the final group of four CMAs in south
Texas. Three of the CMAs trigger the HHI screen – San Antonio, TX (CMA 33), Victoria, TX (CMA
300), and Texas 15 – Concho (CMA 666), while Galveston-Texas City, TX (CMA 170) triggers both the
HHI and spectrum screens.332 Post-transaction, AT&T would hold between [BEGIN HIGHLY

329 In Beaumont-Port Arthur, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least 88 percent of the
population with 3G. Also in this CMA, AT&T, Verizon Wireless, Sprint, and T-Mobile cover at least 65 percent of
the land area with 3G and at least 75 percent of the population with LTE. AT&T, Verizon Wireless and Sprint cover
at least 74 percent of the land area with LTE.
330 In all four CMAs, Cavalier Wireless holds the 700 MHz A block license, and Echostar holds six megahertz of
unpaired 700 MHz spectrum. Further, Command Connect holds 20 megahertz of AWS-1 spectrum in Beaumont-
Port Arthur.
331 In Corpus Christi, AT&T would hold 40 megahertz of AWS-1 spectrum, Verizon Wireless 20 megahertz, and T-
Mobile 30 megahertz. In McAllen-Edinburg-Mission, AT&T would hold 50 megahertz of AWS-1 spectrum and T-
Mobile holds 40 megahertz. In Brownsville-Harlingen, AT&T would hold 50 megahertz of AWS-1 spectrum and
T-Mobile holds 40 megahertz.
332 The post-transaction HHI in San Antonio would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| |
| | | [END HIGHLY CONFIDENTIAL INFORMATION], with a change of [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION], in Victoria the
post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION], in Texas 15 the post-transaction
HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
with a change of [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION] and in Galveston-Texas City the
post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION].

44

Federal Communications Commission

DA 14-349

CONFIDENTIAL INFORMATION]

| | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
percent market share in these four CMAs.333 In San Antonio and Galveston-Texas
City, the number of providers with significant market share would fall from five to four and would remain
unchanged in Victoria and Texas 15.334 Also, in these four CMAs, the percent of customers porting from
AT&T to Leap range from approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | |
| | [END HIGHLY CONFIDENTIAL INFORMATION] percent , which generally tracks the average
percentage of ports calculated by the Applicants. The percent of customers porting from Leap to AT&T
range from approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
percent,335 which for some CMAs generally tracks the
average percentage of ports calculated by the Applicants and is higher in other CMAs.
97.
In terms of coverage, the proposed transaction would result in a decrease from five to
four providers with significant 3G population and land area coverage in San Antonio as well as a decrease
from five to four providers with, significant LTE population coverage.336 The number of providers with
significant LTE land area coverage in San Antonio would remain unchanged. In Galveston-Texas City,
the transaction would result in a decrease from five to four of 3G population and land area coverage.337 In
Victoria, the transaction would result in a decrease from five to four and three to two of 3G population

333 In San Antonio, AT&T and Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | |
| | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively; in Galveston-Texas City, AT&T and
Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
, respectively; in Victoria, AT&T and Leap hold [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION],
respectively; and in Texas 15, AT&T and Leap hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | |
| | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
334 In San Antonio, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively;
in Galveston-Texas City, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively;
in Victoria, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | [

END HIGHLY CONFIDENTIAL INFORMATION]

,
respectively; and in Texas 15, Verizon Wireless, Sprint, T-Mobile, Central Texas Telephone Cooperative, and Five
Star Wireless hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
[

END HIGHLY CONFIDENTIAL INFORMATION]

, respectively.
335 Using 2013 LNP (Applicant) data, ports from AT&T to Leap are [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] % for
San Antonio, Galveston-Texas City, Victoria, and Texas 15, respectively. Using 2013 LNP data, ports from Leap to
AT&T are [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
% for San Antonio, Galveston-Texas City, Victoria, and Texas 15,
respectively. Further using Applicant data, ports by AT&T’s pre-paid customers to Leap were approximately
[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
% for San Antonio, Galveston-Texas City, Victoria, and Texas 15, respectively.
336 In San Antonio, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least 97% of the population and
74% of the land area with 3G. In terms of LTE, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least
91 % of the population and AT&T, Verizon Wireless, Sprint, and T-Mobile cover at least 52% of the land area.
337 In Galveston-Texas City, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least 98% of the
population and 83% of the land area with 3G. In terms of LTE, Leap, Verizon Wireless, and Sprint cover at least
96% of the population and at least 77% of the land area.
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DA 14-349

and land area coverage, respectively.338 In Texas 15, there is no change in the number of providers with
significant 3G and LTE population and land area coverage.339 Post-transaction, AT&T would hold 103 to
155 megahertz of spectrum in these four CMAs340 and each of the significant providers hold 30 to 133.5
megahertz.341
98.
In these final four markets, a review of market factors indicates that this transaction is
unlikely to result in significant competitive harm from a loss of a competitor. In San Antonio, in addition
to the merged entity three other significant providers will remain and each of these has significant 3G and
LTE population and land area coverage. In Galveston-Texas City, in addition to the merged entity three
other significant providers will remain and each of these has significant 3G population and land area
coverage. In Victoria and Texas 15, Leap is not a significant provider and in Texas 15, Leap does not
provide significant 3G coverage.
(iii)

Other Markets

99.
In an additional five CMAs, we find that the proposed transaction is likely to result in
competitive harm from AT&T’s post-transaction spectrum aggregation. The five CMAs are: Spokane,
WA (CMA 109), Reno, NV (CMA 171), Lake Charles, LA (CMA 197), Kansas 5 – Brown (CMA 432),
and Nevada 3 – Storey (CMA 545). Spokane and Lake Charles are non-rural markets with populations of
approximately 500,000 and 200,000, and population densities of 267 and 181 people per square mile,
respectively. Reno, Kansas 5, and Nevada 3 are rural markets, with populations ranging from
approximately 125,000 to 421,000, and population densities ranging from 50 to 67 people per square
mile. These CMAs were identified by both the HHI screen342 and the spectrum screen.343

338 In Victoria, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile cover at least 88% of the population, and
AT&T, Leap, and Verizon Wireless cover at least 92% of the land area with 3G. Sprint and T-Mobile cover slightly
less than 50% of the land area with 3G. In terms of LTE, AT&T, Verizon Wireless, and Sprint cover at least 97% of
the population and at least 76% of the land area.
339 In Texas 15, AT&T, Verizon Wireless, and Sprint cover at least 80% of the population, and only AT&T has
significant land area coverage with 3G. In terms of LTE, only Sprint has significant population coverage in this
CMA, and no provider covers a significant portion of the land area of this CMA with LTE.
340 AT&T would hold 140 megahertz in San Antonio, 155 megahertz in Galveston-Texas City, 150 megahertz in
Victoria, and 103-143 megahertz in Texas 15.
341 Verizon Wireless holds 84 megahertz in San Antonio, 109 megahertz in Galveston-Texas City, 104 megahertz in
Victoria, and 52-109 megahertz in Texas 15. Sprint holds 112.75-113.75 megahertz in San Antonio, 103.875
megahertz in Galveston-Texas City, 103.25 megahertz in Victoria, and 77.25-133.5 megahertz in Texas 15. T-
Mobile holds 70 megahertz in San Antonio, 60 megahertz in Galveston-Texas City, 70 megahertz in Victoria, and
30-50 megahertz in Texas 15.
342 The post-transaction HHI would be [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] in Spokane, Reno, Lake Charles,
Kansas 5, and Nevada 3, respectively. The change in the HHI would be [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] in these
respective markets.
343 Post-transaction in Spokane, AT&T would hold 165 megahertz of total spectrum, including 40 megahertz of
AWS-1, in Reno, 165 megahertz of total spectrum, in Lake Charles, 180 megahertz of total spectrum, including 40
megahertz of AWS-1, in Kansas 5, 123-178 megahertz of total spectrum, in Nevada 3, 163 megahertz of total
spectrum, including 40 megahertz of AWS-1.
46

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DA 14-349

100.
Leap does not have a significant market share in these five CMAs, with the exception of
Reno.344 Post-transaction, AT&T would hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] percent of the
market share in these CMAs.345 The other three nationwide service providers have a significant market
share in Spokane, Reno, Kansas 5, and Nevada 3.346 In Lake Charles, two of the other nationwide service
providers have a significant market share.347 In terms of coverage, the transaction would result in a
decrease in the number of providers with significant 3G population coverage in Spokane and Reno from
five to four, and from four to three in Lake Charles.348 There would be a decrease in the number of
providers with significant 3G land area coverage from five to four in Spokane, four to three in Lake
Charles, and no change in Reno.349 In Kansas 5 and Nevada 3, Leap does not have significant 3G
population or land area coverage,350 so there is no decline in the number of providers with significant 3G
coverage. Further, Leap does not have LTE population or land area coverage in any of these five CMAs,
so there is no decrease in the number of providers with that coverage.
101.
Post-transaction, AT&T would hold 165 megahertz of spectrum throughout Spokane and
Reno and 163 megahertz throughout Nevada 3. The other three nationwide providers hold between 50
and 114 megahertz of spectrum in these CMAs,351 and AT&T’s post-transaction spectrum holdings would

344 Leap holds [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
in Spokane, Lake Charles, Kansas 5, and Nevada 3, respectively.
In Reno, Leap holds a [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | [END HIGHLY
CONFIDENTIAL INFORMATION]
share. In Reno, according to 2013 LNP (Applicant) data, approximately
[BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
% of AT&T’s subscribers port to Leap and approximately [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION] of Leap’s
subscribers port to AT&T.
345 Post-transaction, AT&T would hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] in Spokane, Reno, Lake Charles,
Kansas 5, and Nevada 3, respectively.
346 In Spokane, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively.
In Reno, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| |
| | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively. In Kansas 5, Verizon
Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | |
| | | | | | [END HIGHLY CONFIDENTIAL INFORMATION], respectively. In Nevada 3, Verizon Wireless,
Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | [END
HIGHLY CONFIDENTIAL INFORMATION]
, respectively.
347 In Lake Charles, Verizon Wireless, Sprint, and T-Mobile hold [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] respectively.
348 In Spokane, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover at least 95% of the population. In
Reno, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover at least 86% of the population. In Lake
Charles, AT&T, Leap, Verizon Wireless, and Sprint cover at least 95% of the population.
349 In Spokane, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover at least 53% of the land area. In
Reno, AT&T, Leap, Verizon Wireless, Sprint, and T-Mobile all cover less than approximately 40% of the land area.
In Lake Charles, AT&T, Leap, Verizon Wireless, and Sprint cover at least 76% of the land area.
350 Leap covers approximately 46% of the population and 6% of the land area in Kansas 5, and covers
approximately 58% of the population and 7% of the land area in Nevada 3.
351 In Spokane, Verizon Wireless, Sprint, and T-Mobile hold 87, 87.25, and 60 megahertz of spectrum, respectively.
In Reno, Verizon Wireless, Sprint, and T-Mobile hold 77, 114, and 60 megahertz of spectrum, respectively. In
(continued….)
47

Federal Communications Commission

DA 14-349

be 1.4 to 3.3 times as great as the other significant providers. In Lake Charles, post-transaction AT&T
would hold 180 megahertz throughout the CMA. The other three nationwide providers hold between 50
and 104 megahertz of spectrum,352 and AT&T’s post-transaction spectrum holdings would be 1.7 to 2.5
times as great as the other significant providers.353 In Kansas 5, AT&T would hold 123 to 178 megahertz
of spectrum. In this CMA, AT&T is above the screen in three out of five counties, which reflect
approximately 81 percent of the population of the CMA. The other three nationwide providers hold
between 40 and 119 megahertz of spectrum. In Spokane, Reno, Lake Charles, and Nevada 3, there is a
small amount of paired spectrum that has not been deployed for a mobile wireless network.354 In Kansas
5, there are several licensees that hold paired spectrum that has not been deployed for a mobile wireless
network, but only one of these licensees holds spectrum throughout the CMA.355
102.
Based on this analysis, we find that in these five CMAs AT&T’s spectrum aggregation as
a result of the instant transaction is likely to raise rivals’ costs of providing mobile wireless services.
Post-transaction, AT&T would hold significantly more spectrum than the other significant providers and
in each of these markets there is little paired spectrum that has not been deployed for mobile wireless
services. Therefore, in order to add capacity or offer new and innovative services, the other service
providers in these markets would need to use alternative and likely more costly means to achieve these,
than AT&T.
3.

Roaming

103.
Background. Roaming occurs when a subscriber of one mobile wireless provider travels
beyond the service area of that provider and uses the facilities of another mobile wireless provider to
place and receive calls, continue in-progress calls, and transmit and receive data.356
104.
Several petitioners and commenters argue that despite Leap’s limited geographic
footprint, the loss of Leap as a roaming partner reduces competitive pressure on nationwide providers to
(Continued from previous page)
Nevada 3, Verizon Wireless, Sprint, and T-Mobile hold 77, 97.5-114, and 50 megahertz of spectrum, respectively.
Further, in Spokane and Nevada 3, Verizon Wireless holds 20 megahertz AWS-1, and T-Mobile holds 30
megahertz.
352 In Lake Charles, Verizon Wireless and Sprint hold 72 and 104 megahertz of spectrum, respectively. Further,
Verizon Wireless and T-Mobile each hold 20 megahertz of AWS-1, and Command Connect holds the remaining 10
megahertz.
353 AT&T would hold approximately 3.6 times as much spectrum as T-Mobile, which covers over 60% of the CMA
population with 3G and LTE and has a [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | [END
HIGHLY CONFIDENTIAL INFORMATION]
market share.
354 In Spokane, Cavalier Wireless holds 12 megahertz, in Reno, Triad holds 12 megahertz of spectrum, in Lake
Charles, Command Connect holds 10 megahertz and CenturyTel holds 12 megahertz, and in Nevada 3, Cleartalk
and Triad each hold 12 megahertz of spectrum.
355 In Kansas 5, Gabelli holds 0-10 megahertz, Rainbow Communications 12 megahertz, Tri-County
Telecommunications 0-10 megahertz, U.S. Cellular 0-22 megahertz, and Viaero Wireless 0-20 megahertz. Some of
these licensees have a small amount of coverage in this CMA – U.S. Cellular covers 3.5% of the population and
Viaero Wireless covers 1.4% of the population.
356 See, e.g., Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10729 ¶ 81; AT&T-Qualcomm Order, 26 FCC
Rcd at 17612 ¶ 52; AT&T-Verizon Wireless-ALLTEL Order, 25 FCC Rcd at 8741 ¶ 87. See also Reexamination of
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) (“Data Roaming Order”).
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DA 14-349

maintain reasonable roaming rates and to compete fairly in the marketplace.357 The commenters argue
that loss of Leap as a roaming partner will increase roaming rates,358 particularly those faced by small and
rural providers,359 and in the clusters identified by Youghiogheny Communications.360 Several parties
also assert that AT&T has refused to offer data roaming agreements to other providers at commercially
reasonable terms and conditions, a problem that may be exacerbated by this transaction.361 Some
petitioners contend that the data roaming rule adopted by the Commission in 2011 does not address these
concerns, because even under the rule providers have difficulty negotiating reasonable roaming
arrangements with the top two nationwide providers.362
105.
To remedy these alleged harms, the commenters request certain roaming-related
conditions. Many of these requested conditions are based on the perceived inadequacy of the
Commission’s current roaming rules. NTCH and Youghiogheny Communications, for instance, request
that similar rates as the current CDMA roaming rates be applied to the future GSM/LTE network, once
the network is transitioned.363 Youghiogheny Communications also requests that AT&T be required to
continue or improve upon Leap’s roaming terms for a period of at least five years.364 Blue Wireless

357 See CCA Petition to Condition at 6-7, 15-17. See also CCA Reply at 6, 11-15; RWA Reply at 3-4;
Youghiogheny Communications Petition to Deny at 11-14, 29; Youghiogheny Communications Jan. 8, 2014 Ex
Parte
at 2-3, 5-9; Youghiogheny Communications Feb. 3, 2014 Ex Parte at 2-3; NTCH, Inc. (NTCH) Petition to
Deny or Condition at 3-4. See also NTCH Reply at 4; IAE Declaration at 12-14, 28; Youghiogheny
Communications Reply at ii, 11-12; Letter from Donald J. Evans, Counsel for Buffalo-Lake Erie Wireless Systems.,
LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket 13-193, at 2-3 (filed Jan.
6, 2014) (“Blue Wireless Jan. 6, 2014 Ex Parte”); Letter from Michael Lazarus and Andrew Morentz of
Telecommunications Law Professionals, PLLC, Counsel to Competitive Carriers Association, to Marlene H. Dortch,
Secretary, Federal Communications Commission, WT Docket 13-193, at 1-4 (filed Jan. 3, 2014) (“CCA Jan. 3, 2014
Ex Parte”); Letter from Michael Lazarus and Andrew Morentz of Telecommunications Law Professionals, PLLC,
Counsel to Competitive Carriers Association, to Marlene H. Dortch, Secretary, Federal Communications
Commission, WT Docket 13-193, at 2-3 (filed Feb. 6, 2014) (“CCA Feb. 6, 2014 Ex Parte”).
358 See generally Smith Reply at 9. See also CCA Petition to Condition at 7, 15-17; RWA Comments at 5;
Youghiogheny Communications Jan. 8, 2014 Ex Parte at 8-9; Youghiogheny Communications Jan. 29, 2014 Ex
Parte
at 1. See also NTCH Reply at 2-4. See also Youghiogheny Communications Jan 8, 2014 Ex Parte at 2, 6.
359 See CCA Petition to Condition at 6-7, 16. See also CCA Reply at 6-7; NTCH Petition to Deny or Condition at 2-
5; NTCH Reply at 3-4; Youghiogheny Communications Petition to Deny at 11-16; IAE Declaration at 16-17;
Youghiogheny Communications Feb. 6, 2014 Ex Parte at 5.
360 See Youghiogheny Communications Petition to Deny at 32-33; IAE Declaration at 20. See also IAE Feb. 28,
2014 Ex Parte at 2-3.
361 See CCA Petition to Condition at 15-17. See also CCA Reply at 6-7, 12; NTCH Petition to Deny or Condition at
2-4 (discussing AT&T and Verizon); NTCH Reply at 2-4; Youghiogheny Communications Petition to Deny at 11-
14 (discussing AT&T and Verizon); IAE Declaration at 16; IAE Reply Declaration at 7, 16-17; CCA Jan. 3, 2014
Ex Parte at 2-3; CCA Feb. 6, 2014 Ex Parte at 2-4; Youghiogheny Communications Jan. 8, 2014 Ex Parte at 2, 8-
14, 19; Youghiogheny Communications Feb. 3, 2014 Ex Parte at 2-4.
362 See CCA Petition to Condition at 15-17. See also RWA Reply at 3; Flat Wireless, LLC, Jan. 6, 2014 Ex Parte at
3-4; Youghiogheny Communications Jan. 8, 2014 Ex Parte at 6-9, 15-16, 19; Letter from Martyn Roetter and Alan
Pearce, Information Age Economics, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT
Docket 13-193, at 1-3 (filed Feb. 5, 2014) (“IAE Feb. 5, 2014 Ex Parte”).
363 See NTCH Petition to Deny or Condition at 1, 4. See also Youghiogheny Communications Petition to Deny at
14, 33; Youghiogheny Communications Reply at 12-13.
364 See Youghiogheny Communications Petition to Deny at 14, 33. See also Youghiogheny Communications Reply
at 12-13.
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contends that Leap has recently been offering inflated roaming rates in anticipation of these conditions,
and that AT&T should be required to offer roaming rates that do not exceed those rates offered by Leap
prior to its entry into the merger agreement.365 Youghiogheny Communications and IAE also describe
several methods that could be used to determine voice and data roaming rates.366 Flat Wireless requests
unspecified protections for Leap’s current roaming partners, to reduce the effects of this transaction on
CDMA roaming.367 Other requested conditions, discussed below, address transitional issues related to
AT&T’s plans to decommission Leap’s CDMA network facilities.
106.
Leap specifies that with a few exceptions, their roaming agreements are terminable by
either party for convenience upon the requisite written notice to the other party. The exceptions include
agreements with Sprint, MetroPCS, and Flat Wireless.368 The Applicants respond that no roaming
conditions should be imposed because Leap “is not a significant provider of roaming services,” and
“alternative roaming providers exist across virtually all of Leap’s network footprint,” therefore this
transaction will not significantly affect options for CDMA roaming.369 In response to Blue Wireless,
Leap replies that Blue Wireless was not a roaming partner of Leap at the time the transaction was
announced, and that they are using the pendency of the current transaction to extract concessions.370 Leap
does not provide any LTE roaming.371
107.
Discussion. With regard to the arguments expressing concern about the availability of

365 See Blue Wireless Jan. 6, 2014 Ex Parte at 3-4. See also Youghiogheny Communications Feb. 3, 2014 Ex Parte
at 2-4; Youghiogheny Communications Jan. 29, 2014 Ex Parte at 1.
366 See Youghiogheny Communications Feb. 6, 2014 Ex Parte at 2-4, 5; Youghiogheny Communications Jan. 8,
2014 Ex Parte at 8, 12-19. See also Letter from Donald J. Evans, Counsel for Youghiogheny Communications,
LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket 13-193 (filed Feb. 7,
2014) (“Youghiogheny Communications Feb. 7, 2014 Ex Parte”); IAE Jan. 8, 2014 Ex Parte at 8, 12-19; IAE Feb.
28, 2014 Ex Parte at 3-5 (arguing for additional conditions including a requirement for AT&T to file with the
Commission all roaming agreements with wireless providers in the United States and Canada, publish certain
roaming rates, and sign roaming agreements with at least two small providers).
367 See Flat Wireless Jan. 6, 2014 Ex Parte at 4.
368 See Nov. 22, 2013 Leap Initial Response at 20-21, where Leaps states that [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |[END HIGHLY CONFIDENTIAL
INFORMATION]
.
369 See Joint Opposition at 39, 41. See also Public Interest Statement, Declaration of Robert A. Strickland at 1.
370See Leap Jan. 16, 2014 Ex Parte at 3.
371 See Nov. 22, 2013 AT&T Initial Response at 70.
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DA 14-349

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 Youghiogheny Communications, NTCH, or any member of CCA, encounters difficulties in
obtaining reasonable roaming services or roaming rates under our rules and policies, it can file complaints
with the Commission pursuant to our established roaming rules.372 We conclude that any roaming rate or
term related conditions proposed by commenters are not narrowly tailored to remedy any purported harms
arising out of this transaction.
108.
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.373 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 an orderly transition.374
We address below issues relating to the provision of roaming services provided on Leap’s CDMA
network during its network transition while providers are making alternative roaming arrangements.

C.

Other Issues

109.
Customer Migration. We also consider potential public interest harms associated with
the transition of Leap customers, particularly given that, with the planned discontinuance of Leap’s
CDMA-based network, customers wishing to remain with the Cricket brand necessarily will be migrating
from that network onto a GSM-based network. AT&T’s original statements – in the Public Interest
Statement – were limited only to general representations, e.g., that it expects to complete migration of
Leap customers to AT&T’s networks within 18 months of closing.375 In a supplement filed on August 20,
2013, the Applicants asserted that, after merger close, it will honor the existing plan of each Leap
customer, provided that the customer does not suspend or terminate his or her service for that plan, or
choose to upgrade to a device or plan that is not comparable to his or her current device or plan.376 AT&T
contends that it plans to combine the nascent operations of Aio Wireless with Leap’s existing operations
under the Cricket brand name, claiming that this will allow Leap customers to migrate to AT&T’s
network organically.377 Applicants estimate that [BEGIN CONFIDENTIAL
INFORMATION]
[END CONFIDENTIAL INFORMATION] percent of Leap’s customers replace
handsets every 18 months.378 AT&T leaves open the possibility that it may formulate offers designed to
encourage Leap customers to migrate to its network, as it learns more about Leap’s customer base.379 In

372 See Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, WT Docket No. 05-
265, Report and Order and Further Notice of Proposed Rulemaking, 22 FCC Rcd 15817, 15828 ¶ 27 (2007);
Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of
Mobile Data Services, WT Docket No. 05-265, Order on Reconsideration and Second Further Notice of Proposed
Rulemaking
, 25 FCC Rcd 4181, 4192 ¶ 2 (2010); Data Roaming Order, 26 FCC Rcd at 5411.
373 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8746-8748 ¶¶ 95-101. See also AT&T-ATN Order, 28 FCC
Rcd at 13702-13703 ¶ 59-60.
374 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8746-8748 ¶¶ 95-101. See also AT&T-ATN Order, 28 FCC
Rcd at 13702-13703 ¶ 59-60.
375 See Public Interest Statement at 16.
376 See Aug. 20, 2013 Applicants Supplemental Response at 2.
377 See Aug. 20, 2013 Applicants Supplemental Response at 2.
378 Joint Opposition at n.26.
379 See Aug. 20, 2013 Applicants Supplemental Response at 3.
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addition, AT&T notes that migrating Leap customers will have the opportunity to “bring their own
devices,” which will allow them to use any unlocked and technically compatible phone on AT&T’s
network.380
110.
In response to the assertions made by the Applicants in the Public Interest Statement
and the August 20, 2013 Supplement, several parties in their Petitions to Deny argue that AT&T’s
proposed customer transition plans are insufficient. Public Knowledge believes that AT&T has failed to
explain whether it will honor the terms and conditions Leap provides to existing Leap customers, such as
unlimited voice, text, and data.381 Youghiogheny Communications contends that the proposed transaction
offers no benefit or certainty to existing Leap customers because AT&T has only promised that it may
formulate offers designed to further encourage the migration of those Leap costumers that do not migrate
to the AT&T network on their own, and that if anything, former Leap customers, rather than gaining
anything, will be losing Cricket’s unique “Muve” music service.382 Youghiogheny Communications
argues that AT&T’s bring-your-own-device option is worthless because existing Leap CDMA devices are
incompatible with AT&T’s network and unlocked devices are likely to be more expensive to obtain.383
Youghiogheny Communications argues that AT&T should be required to present a more concrete
transition plan and suggests a condition to ensure that Cricket's customers are not forced to buy new
phones and pay higher prices if they migrate to the AT&T network.384 Finally, Youghiogheny
Communications asserts that, because Leap’s customer base is exclusively prepaid, the transition
problems that concerned the Commission in connection with the ATN deal are magnified here because
any palliative used to soften the effects of the transaction on Leap’s customers may erase the cost-saving
benefits claimed by the Applicants.385
111.
On October 24, 2013, in its Joint Opposition, AT&T states that it has agreed that, for a
period of 18 months after closing, Cricket will offer a $40 per month (including all taxes and fees)
prepaid plan featuring unlimited talk, text and data and no roaming charges to new and existing customers
in California.386 AT&T adds that it intends to offer the same $40 per month prepaid plan wherever the
Cricket brand is available nationwide during the same 18-month period.387 AT&T claims, in fact, that its
preliminary migration plans are substantially similar to those approved in the T-Mobile-MetroPCS
Order
.388 AT&T has provided no new proposals regarding customer migration in its November 22, 2013,
Initial Response to the Information and Discovery Request, its January 3, 2014, Second Supplemental
Response, or its January 23, 2014, Third Supplemental Response, apart from noting that examples of
possible incentive offers under discussion included [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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380 Aug. 20, 2013 Applicants Supplemental Response at 2-3.
381 See Public Knowledge Petition to Deny at 17-18.
382 See Youghiogheny Communications Petition to Deny at 22; Youghiogheny Communications Reply at 15.
383 See Youghiogheny Communications Petition to Deny at 23.
384 See Youghiogheny Communications Petition to Deny at 24; Youghiogheny Communications Reply at 13.
385 See Youghiogheny Communications Petition to Deny at 23.
386 See Joint Opposition at 7; Letter from J. David Tate, General Attorney & Associate General Counsel, AT&T, to
Ryan Dulin, Director, Communications Division, California Public Utilities Commission, re Notice by AT&T Inc.
of Proposed Indirect Transfer of Control of Cricket Communications, Inc. (U-3076-C) at 6 (filed Oct. 8, 2013).
387 See Joint Opposition at 7.
388 See id. at 7-8.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION].389
112.
With respect to the similarities between this transaction’s customer migration plans and
those in T-Mobile/MetroPCS, Public Knowledge responds that the plans are actually quite different from
those approved in the T-Mobile-MetroPCS Order. According to Public Knowledge, AT&T conditions
upgrades on giving up existing Leap plans, while T-Mobile’s customers do not have to choose between an
updated device and abandoning MetroPCS’s rates, terms, and conditions.390 Mr. Smith argues that
Applicants will honor the flexible, no-commitment plans Leap customers have already chosen only if
those customers accept what amounts to a contract not to change the terms of their service arrangement,
which is exactly the type of fixed agreement that Mr. Smith and other Leap customers consciously sought
to avoid in the first place.391 Mr. Smith also argues that this transaction will force Cricket’s existing
customers to purchase new equipment that is compatible with AT&T’s network.392
113.
In its February 5, 2014, Fourth Supplemental Response, AT&T added that the New
Cricket will offer [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
.393 It is also considering offering certain discounts, credits, and incentives to some
customers,394 but makes no commitments in that respect. AT&T asserts that as of December 2013, more
than [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END HIGHLY CONFIDENTIAL
INFORMATION]
of Leap’s subscribers upgraded their devices during the preceding 18-month period,
and approximately [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | [END HIGHLY
CONFIDENTIAL INFORMATION]
of Leap’s subscribers upgraded their devices during the preceding
12-month period.395 Based in part on the Applicants’ churn estimates [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION].396
114.
AT&T addresses the migration of existing Cricket Lifeline customers starting in its
Second Supplemental Response of January 3, 2014. Through its ETC status in various states, Cricket
provides Lifeline service by giving Lifeline customers a $10 discount from Cricket’s monthly plans,397
which can run as low as $35 per month.398 [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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INFORMATION]
AT&T had committed to the California PUC to maintain its ETC status and to

389 See Jan. 23, 2014 AT&T Third Supplemental Response at 7.
390 See Public Knowledge Reply at 12.
391 See Smith Reply at 10.
392 See Smith Reply at 10.
393 See Feb. 5, 2014 AT&T Fourth Supplemental Response at 3-4.
394 See Feb. 5, 2014 AT&T Fourth Supplemental Response at 4-5.
395 See Feb. 5, 2014 AT&T Fourth Supplemental Response at 5.
396 See Feb. 5, 2014 AT&T Fourth Supplemental Response at 9.
397 See Cricket Lifeline Credit, http://www.mycricket.com/support/cricket-lifeline-credit (last visited Mar. 11, 2014).
398 See Cricket Cell Phone Plans & Deals, available at http://www.mycricket.com/cell-phone-plans#basic-plans (last
visited Mar. 11, 2014).
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provide Lifeline service there for the duration of the 18 months post-merger close.399 AT&T has also
stated that it would honor the existing plan of each Leap customer as of merger close.400
115.
In its February 5, 2014, Fourth Supplemental Response,401 AT&T discussed [BEGIN

HIGHLY CONFIDENTIAL INFORMATION]

| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | [END HIGHLY CONFIDENTIAL INFORMATION].402 In a March 12, 2014 Ex Parte filing,
AT&T indicates that “it would maintain Cricket’s ETC designations for some period of time. As such,
Cricket will continue to fulfill its Lifeline ETC obligations and comply with relevant requirements.
Should Cricket decide to cease participating in the Lifeline program, it would comply with applicable
procedures to effectuate such a decision (including applicable relinquishment procedures).”403
116.
As discussed above, the Applicants initially provided very little in the way of detailed
description of their customer transition plans. In particular, AT&T represented that it has had experience
transitioning customers in previous transactions, many of which involved similar migration plans
(although we note that those were from 2G to 3G networks).404 The Applicants assert that “AT&T has a
history of successfully integrating networks, including the integration of CDMA-based networks and the
migration of existing customers, including prepaid customers, from those networks.405 However,
AT&T’s merger integration strategy largely relies on [BEGIN HIGHLY CONFIDENTIAL
INFORMATION]
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399 See Jan. 3, 2014 AT&T Second Supplemental Response at n.12. In the Jan. 3, 2014 Second Supplemental
Response at 8, AT&T explicitly agreed to continue CDMA service to Lifeline customers “[a]s long as [the] Lifeline
customer does not suspend or terminate his or her service for that Lifeline plan or choose to upgrade to a device or
plan that is not comparable to his or her current Lifeline device or plan. . . until AT&T terminates consumer-based
CDMA services,” which will happen within 18 months of merger close, and in some places, within [BEGIN
HIGHLY CONFIDENTIAL INFORMATION]
| | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
of merger close. In its January 23, 2014, Third Supplemental Response, AT&T reiterated that
“Lifeline customers will be permitted to terminate their CDMA service at any time and may move to alternative
Lifeline service providers.” Jan. 23, 2014 AT&T Third Supplemental Response at 9.
400 See Nov. 22, 2013 AT&T Initial Response at 45.
401 See Feb. 5, 2014 AT&T Fourth Supplemental Response at 3.
402 See Letter from Donald J. Evans, Counsel for Youghiogheny Communications, LLC, to Marlene H. Dortch,
Secretary, Federal Communications Commission, WT Docket 13-193, at 2 (Feb. 14, 2014) (“Youghiogheny
Communications Feb. 14, 2014 Ex Parte”). See also Letter from Donald J. Evans, Counsel for Youghiogheny
Communications, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket 13-
193, at 3 (Mar. 10, 2014) (“Youghiogheny Communications Mar. 10, 2014 Clyburn Office Ex Parte”).
403 See Letter from Mary L. Henze, Assistant Vice President – Federal Regulatory, AT&T Services, Inc. to Ms.
Marlene Dortch, Secretary, Federal Communications Commission, WT Docket 13-193 (filed Mar. 12, 2014)
(“AT&T March 12, 2014 Lifeline Ex Parte”).
404 See Joint Opposition at n.31.
405 See id.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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CONFIDENTIAL INFORMATION]
.406 Although AT&T has recently provided more information
about the steps it plans to take to transition Leap’s customers, including Lifeline customers, we find the
information on customer migration is still insufficient under our public interest review.
117.
Broadvox Access Charge Dispute. Broadvox, a competitive local exchange carrier
(“CLEC”),407 accuses AT&T, through its long distance affiliates, of placing undue pressure on other long
distance providers by failing to pay invoices without filing timely or good faith disputes.408 Broadvox
alleges that over a period of 20 months, it billed AT&T $3,480,000, but AT&T paid only $428,000
without identifying which charges it disputes.409 It has filed a complaint in federal court to collect the
monies it believes are due.410
118.
Broadvox argues that AT&T will increase its penetration into the market for prepaid
services by purchasing Leap and that prepaid wireless services compete directly with prepaid calling card
services.411 Broadvox argues that the transaction will increase the flow of traffic originated by its own
wireless customers to Broadvox, which will allegedly result in more access charges that AT&T will not
pay.412 Broadvox asks the Commission to deny the applications because the transaction will allegedly
“exacerbate what is already an untenable situation for Broadvox.”413 In the alternative, Broadvox asks
that the Commission place a series of conditions on the transaction that would require AT&T to make
various filings and reports to the Commission, offer any settlement rates, terms, and conditions to any
requesting carrier on a nondiscriminatory basis, and comply with the VoIP Symmetry Rule.414
119.
The Applicants respond that the issues Broadvox raises have no relationship to the
transaction and involve parties other than Broadvox and AT&T.415 The Applicants also contend that the
issues should be litigated in other proceedings before the Commission and in federal court where these
issues have already been raised.416
120.
We conclude that the issues raised by Broadvox and conditions proposed by Broadvox
are not narrowly tailored to remedy any purported harms arising out of this transaction. Furthermore, we

406 See ATT-FCC-000036953.
407 Broadvox provides interstate and intrastate exchange access services, as well as local, long distance and
enhanced services on both a retail and wholesale basis to communication service providers. See Broadvox Petition
to Deny at 4. Broadvox serves its own local and long distance customers, but provides service to a wide variety of
customers, including prepaid calling card providers. See id.
408 See Broadvox Petition to Deny at 6.
409 See id.
410 See Broadvox Petition to Deny at 8.
411 See id. at 12-13.
412 See id. at 15.
413 See id. at 15.
414 See id. at 17-18. See also Letter from James C. Falvey, Esq., Counsel for Broadvox-CLEC, LLC to Marlene H.
Dortch, Secretary, Federal Communications Commission, WT Docket No. 13-193, at 5 (filed Mar. 10, 2014).
415 See Joint Opposition at 43.
416 See id. at 43-44.
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agree with the Applicants that the appropriate fora for resolving these issues are the proceedings before
the Commission and in federal court where these issues have already been raised.
121.
Infrastructure Network Leases. Infrastructure Networks, Inc. (Infrastructure) provides
high speed data connectivity for users in critical infrastructure industries, including oil and natural gas
exploration and production; water, oil and natural gas pipelines and wells; coal and ore mines; railroads,
roads, inland waterways, vital bridges and tunnels; electric generation plants and distribution systems; and
municipal traffic, utility and public service systems.417 Infrastructure had entered into agreements with
Cricket and STX to lease AWS-1 spectrum in Texas and Oklahoma.418 The leases commenced July 22,
2013.419 The leases contain provisions allowing the lease to be terminated upon six months’ notice by
either party.420 Infrastructure asked for assurances that AT&T would honor the leases, but AT&T refused
to provide such assurances.421
122.
Infrastructure argues that if AT&T terminated the leases, “it would remove a competitor
from this market and leave the critical infrastructure market dangerously underserved.”422 According to
Infrastructure, allowing AT&T to acquire the spectrum would harm competition without any
corresponding benefit.423 The Applicants describe the issue as a private contractual issue that the
Commission should leave to the parties or courts of competent jurisdiction.424 Infrastructure responds that
the energy industry has critical communications needs that implicate an important public interest.425
Infrastructure asks “that the Commission condition any grant of consent in this proceeding by requiring
AT&T to honor rather than terminate the Leases for the duration of their term.”426 TanMar
Communications and Stallion Oilfield Services Ltd. ask the Commission to consider the need of critical
infrastructure industries for virtual private radio networks in connection with this transaction.427
123.
We decline to impose the condition requested by Infrastructure because it is inconsistent
with Commission policy. Infrastructure freely negotiated a lease with Leap that allowed Leap to

417 See Infrastructure Petition to Condition at 3.
418 See Lease Nos. L000010651 (10 megahertz of AWS-1 spectrum in Fayette County, Texas and Beckham, Ellis,
and Roger Mills counties in Oklahoma); L000010652 (10 megahertz of AWS spectrum in DeWitt, Gonzales,
Karnes, Lavaca, and Wilson counties in Texas).
419 See Lease Nos. L000010651, L000010652.
420 See Joint Opposition at 44; Infrastructure Reply at 5. There is a dispute between the parties as to whether the
lease allows for termination if there is a transfer of control of Leap. Compare Infrastructure Petition to Condition at
3-4 and Joint Opposition at 44.
421 See Infrastructure Petition to Condition at 4.
422 Id. at 6.
423 See id. at 6.
424 See Joint Opposition at 45.
425 See Infrastructure Reply at 5-6. See also Letter from Ronald W. Del Sesto, Jr., Esq., counsel for Infrastructure
Networks, Inc. to Ms. Marlene H. Dortch, Secretary, Federal Communications Commission (filed Feb. 3, 2014) at 2.
426 Infrastructure Reply at 8.
427 See Letter from Robert J. Ryan, Assistant Secretary, Stallion Oilfield Services Ltd. to Marlene H. Dortch,
Secretary, Federal Communications Commission, WT Docket 13-193 (filed Feb. 18, 2014); Letter from Scott
Leblanc, General Manager, TanMar Communications, L.L.C. to Marlene H. Dortch, Secretary, Federal
Communications Commission, WT Docket 13-193 (filed Feb. 6, 2014).
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terminate the lease on six months’ notice. In establishing its secondary markets rules and policies, the
Commission recognized that parties would negotiate terms under which leases could be terminated, and
held that so long as those terms complied with our rules and policies, “[w]e will not dictate the specific
terms of such a provision.”428 Here, Infrastructure is asking us to unilaterally eliminate a lease
termination provision to which it voluntarily agreed. We agree with Applicants that such an action would
be an inappropriate interference with a private contractual agreement. Furthermore, while we agree with
Infrastructure that the energy industry has important communications needs, those needs do not justify the
extraordinary remedy Infrastructure seeks.
124.
Leap Use of Huawei Equipment. Youghiogheny Communications states that Cricket has
installed equipment manufactured by Chinese equipment manufacturer Huawei in south Texas and
Chicago.429 It claims, “Congress has issued grave warnings about the security risks associated with using
Huawei and ZTE equipment” and argues that AT&T must dismantle networks using Huawei equipment
even before it transitions Cricket’s customers off the CDMA network.430 Youghiogheny Communications
suggests that if AT&T does not voluntarily agree to dismantle the existing networks, the Commission
should impose a condition similar to the condition imposed in the Softbank-Sprint Order.431
Youghiogheny Communications provides a newspaper article alleging a security breach in Cricket’s
network node in San Antonio.432 Applicants respond that the proposed transaction would eliminate any
concern about Huawei equipment because AT&T will decommission the existing Leap network.433 They
also note that while Sprint was given two and a half years to replace Huawei and ZTE (another Chinese
manufacturer) equipment, AT&T plans to decommission Leap’s CDMA network in less time.434
Youghiogheny Communications responds that the Applicants’ response is insufficient and that they
should be required to remove the Huawei equipment prior to closing.435
125.
We decline to impose the condition requested by Youghiogheny Communications. The
requested remedy is not narrowly tailored to remedy any purported harms arising out of the proposed
transaction. Indeed, the proposed transaction could remedy any potential harm by resulting in the
decommissioning of that equipment. Further, Youghiogheny Communications mischaracterizes the
SoftBank-Sprint Order. In that order, the Commission noted that Executive Branch agencies had entered
into a National Security Agreement with SoftBank, Sprint, and Clearwire pursuant to the CFIUS
process,436 and that those agencies did not object to the grant of the FCC application. The Commission

428 See Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary
Markets, WT Docket No. 00-230, Second Report and Order, Order on Reconsideration, and Second Further Notice
of Proposed Rulemaking
, 19 FCC Rcd 17503, 17565 ¶ 131 (2004).
429 See Youghiogheny Communications Petition to Deny at 24.
430 Youghiogheny Communications Petition to Deny at 24.
431 See Youghiogheny Communications Petition to Deny at 24.
432 See Youghiogheny Communications Reply at Exhibit A.
433 See Joint Opposition at n.150.
434 See Joint Opposition at n.150 (citing SoftBank-Sprint Order, 28 FCC Rcd at 9694-95 ¶ 127).
435 See Youghiogheny Communications Reply at 5-7.
436 “CFIUS” is the Committee on Foreign Investment in the United States. CFIUS conducts national security
reviews of mergers, acquisitions, and takeovers by, or with, any foreign person that could result in foreign control of
a U.S. business (a “covered transaction”). Where a covered transaction presents national security risks, the Foreign
Investment and National Security Act of 2007 (“FINSA”) provides statutory authority for CFIUS to enter into
mitigation agreements with parties to the transaction or to impose conditions on the transaction to address such risks.
(continued….)
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found that any national security issues had been adequately addressed based on the record in that
proceeding, and did not place any conditions on the transaction related to national security. 437 Therefore,
that case is not dispositive to the proposed transaction before us.
126.
Leap Patent Issue. Youghiogheny Communications raises concerns about AT&T’s
acquisition of a patent held by Leap for a business model patent on providing wireless communications
services under an “all-you-can-eat” pricing scheme.438 Leap reports that it has sold the patent in
question.439 In light of Leap’s response, we consider Youghiogheny Communications’ concern moot
because AT&T will not acquire the patent as a result of this transaction.
127.
Overcharging. William Jay Fogal, an AT&T customer, argues that AT&T has been
overcharging Go-Phone customers by charging customers for airtime that the customer was not in fact
using.440 He provides a series of pictures showing that while calls were shown to be a certain length on
his phone, he was billed for additional time by AT&T.441 In the context of a complaint Mr. Fogal filed
with the State of California, AT&T explained that a customer is billed beginning when the call is
connected to the network, and the time shown on the phone does not reflect the time billed.442 We decline
to consider his complaints in the context of this transaction because the harms he complains of are not
caused by the proposed transaction. We also note that Mr. Fogal has filed complaints with the State of
California and the Commission443 raising the same issue, and we believe his issues were more
appropriately considered in the context of those complaints.
128.
Flat Wireless Ownership Issue. As described above, it appears that, for at least some
time after closing, AT&T may hold an interest in Flat Wireless, another wireless telecommunications
provider.444 Flat argues that AT&T would hold post-closing a very significant interest in Flat, one of its
current competitors.445 AT&T responds that Leap’s indirect ownership interest in Flat should have no
effect on our review of the proposed transaction because the interest is a non-controlling, non-attributable
minority interest.446
129.
Based on our review of the Flat corporate documents, we are not convinced that the
Applicants have sufficiently demonstrated that any interest AT&T may hold in Flat after closing should
be disregarded for purposes of our competitive review. There appears to be at least a potential for AT&T
(Continued from previous page)
See Regulations Pertaining to Mergers, Acquisitions and Takeovers by Foreign Persons, 73 Fed. Reg. 70702, 70703
(Nov. 21, 2008) (Merger Regulations Summary). See also Review of Foreign Ownership Policies for Common
Carrier and Aeronautical Radio Licensees under Section 310(b)(4) of the Communications Act of 1934, as Amended,
IB Docket No. 11-133, Second Report and Order, 28 FCC Rcd 5741, 5760-61 ¶ 33, n. 108-110 (2013).
437 See SoftBank-Sprint Order, 28 FCC Rcd at 9694-96 ¶¶ 127-131.
438 See Youghiogheny Communications Dec. 16, 2013 Ex Parte at 3.
439 See Leap Jan. 16, 2014 Ex Parte at 1-2.
440 See Comments and Complaint of William Jay Fogal (filed Jan. 14 and 17, 2014).
441 See Comments and Complaint of William Jay Fogal (filed Jan. 14 and 17, 2014).
442 See Letter from D. Michael Rodriguez, Office of the President, AT&T to State of California, Department of
Justice (filed Aug. 1, 2013).
443 See File No. 13-C00464431.
444 See ¶ 10 supra.
445 See Flat Wireless, LLC, Jan. 6, 2014 Ex Parte at 2.
446 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 1-2.
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to have the ability to influence Flat’s affairs.

VI.

POTENTIAL PUBLIC INTEREST BENEFITS

130.
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
interest benefits that outweigh any identified competitive harms.447 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.448

A.

Analytical Framework

131.
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.”449 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.450
132.
The Commission applies several criteria in deciding whether a claimed benefit should be
considered and weighed against potential harms.451 First, the claimed benefit must be transaction-
specific.452 Second, the claimed benefit must be verifiable.453 Because much of the information relating
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

447 See, e.g., Applications of AT&T Inc. and Cellular South, Inc. For Consent To Assign Licenses Covering Parts of
Alabama, Georgia, and Tennessee, Memorandum Opinion and Order, 28 FCC Rcd 12328, 12335 ¶ 16 (WTB 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 at 2341 ¶ 56; AT&T-WCS Order, 27 FCC Rcd at
16474 ¶ 40; Verizon Wireless-SpectrumCo Order, 27 FCC Rcd at 10734 ¶ 95.
448 See, e.g., SoftBank-Sprint Order, 28 FCC Rcd at 9678 ¶ 91; AT&T-WCS Order, 27 FCC Rcd at 16474 ¶ 40;
AT&T-Qualcomm Order, 26 FCC Rcd at 17623 ¶ 82.
449 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.
450 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.
451 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.
452 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.
453 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.
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reductions to be cognizable than reductions in fixed cost.”454 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.455 In addition, “the magnitude of benefits must be calculated net of the cost of achieving
them.”456 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.457 Finally, the Commission applies a “sliding
scale approach” to evaluating benefit claims.458 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.”459

B.

Potential Benefits

133.
The Applicants claim that the proposed transaction would benefit the customers of both
companies.460 According to the Applicants, the proposed transaction will expand and improve the service
offerings available under the Cricket brand and will enable the combined company to offer high-quality
nationwide, facilities-based prepaid/no-contract services more effectively.461 The Applicants assert that
the proposed transaction would allow more efficient use of the Leap spectrum than was possible on the
Leap network.462 The Applicants claim that the proposed transaction will increase competition, improve
customers’ network experience, improve spectral efficiency, reduce costs and increase savings, and help
Leap customers migrate onto AT&T’s superior wireless network.
134.
Increased Competition. The Applicants argue that the proposed transaction will
expand and improve the service offerings available under the Cricket brand, which will put added
competitive pressure on T-Mobile, Sprint and other providers.463 AT&T intends to use the Cricket brand

454 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.
455 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.
456 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.
457 See, e.g., AT&T-Centennial Order, 24 FCC Rcd at 13954 ¶ 90.
458 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.
459 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.”).
460 See Public Interest Statement at 8.
461 See Public Interest Statement at 7.
462 See Public Interest Statement at 16.
463 See Public Interest Statement at 7.
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and expand the availability of the Cricket service offerings nationwide,464 and it argues that the benefits of
this transaction will be available to all consumers, including low-income and minority consumers.465 The
Applicants contend that AT&T’s nationwide 4G LTE/HSPA+ network, its superior range of devices466
and broader array of services, and its greater financial resources make it possible to compete more
effectively against T-Mobile/MetroPCS, Sprint (including its Boost Mobile and Virgin Mobile USA
brands), Verizon Wireless, and TracFone/Straight Talk, among others.467 The Applicants argue that
competition to attract value-conscious customers to prepaid/no-contract services is intensifying.468
Specifically, they argue that T-Mobile has heightened its business focus on lower-cost, no-contract
service and is expanding the MetroPCS brand;469 while Sprint has bolstered its financial and operational
position from its recent acquisition by SoftBank, and its acquisition of Clearwire spectrum will enable it
to expand its successful Boost and Virgin Mobile brands.470 Meanwhile, according to the Applicants,
Leap faces significant challenges in competing effectively against the LTE service offerings of the
nationwide wireless carriers.471
135.
According to the Applicants, existing Leap customers will benefit from a more robust
national network and a broader array of services.472 AT&T asserts that, after merger close, it will honor
the existing plan of each Leap customer, provided that the customer does not suspend or terminate his or
her service for that plan, or choose to upgrade to a device or plan that is not comparable to his or her
current device or plan.473 AT&T also claims that the combined company will continue to offer
competitive rate plans that appeal to value-conscious customers, including the option of choosing low-
cost devices and services.474 Leap has deployed LTE technology in only 11 metropolitan areas covering
approximately 21 million people.475
136.
The Applicants argue that by combining Leap’s established Cricket brand with
AT&T’s nationwide 4G LTE/HSPA+ network, the combined company will bring consumers a higher
quality, more robust, competitive prepaid offering.476 AT&T recently launched a new standalone prepaid
brand called “Aio Wireless,” with a separate distribution network (which still needs to be built); this plan
is aimed at customers seeking low-cost service options.477 It is available in seven metropolitan areas in

464 See Public Interest Statement at 8; Joint Opposition at 4.
465 See Joint Opposition at 5-6.
466 AT&T claims that it will offer Leap customers the iPhone 5, the Samsung Galaxy Express, the Nokia Lumia 620,
and other smartphones and feature phones from which they can choose. See Joint Opposition at 8.
467 See Public Interest Statement at 8-9.
468 See Public Interest Statement at 5.
469 See Public Interest Statement at 6.
470 See Public Interest Statement at 6-7.
471 See Public Interest Statement at 7.
472 See Public Interest Statement at 9; Joint Opposition at 4-5.
473 See Aug. 20, 2013 Applicants Supplemental Response at 2.
474 See Public Interest Statement at 9.
475 See Public Interest Statement at 11; Joint Opposition at 19.
476 See Public Interest Statement at 12-13; Joint Opposition at 11.
477 Public Interest Statement at 12.
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Florida and Texas.478 It is also available nationwide through online ordering.479
137.
Improved Network Experience. The Applicants argue that customers of both
companies (particularly those of Leap) will benefit from an enhanced and expanded network.480
According to the Applicants, Leap customers will enjoy access to AT&T’s nationwide network, rather
than relying on third-party networks,481 and Leap customers will gain access to a broader and more robust
LTE network.482 Leap holds unused AWS-1 and PCS spectrum covering about 41 million people.483 The
Applicants argue that AT&T will use this spectrum, incorporating it into, and increasing the capacity of,
its LTE network.484 AT&T already is deploying AWS-1 spectrum in its LTE network and represents that
it will begin deploying LTE service over PCS spectrum by the end of 2013.485 In areas where AT&T
currently anticipates it will already be utilizing AWS-1 spectrum for LTE service at the time of closing,
AT&T preliminarily has determined that it will be able to deploy Leap’s unused, contiguous AWS-1
spectrum in as little as 60 or 90 days (this includes approximately 50 CMAs).486 It has twice revised that
list based on “based on additional spectrum utilization information received from Leap, adjustments to
AT&T’s LTE deployment, and further analysis by AT&T’s network integration team.”487 AT&T admits
that the list is subject to change because its integration planning is still ongoing.488 AT&T estimates that
it will be able to deploy the unused, contiguous Leap spectrum in many additional areas with 12 months
after the close of this transaction (this would include over 160 CMAs).489 This list is still preliminary and
is subject to change as it performs further integration planning.490 AT&T also expresses its intention to
ultimately deploy all of Leap’s PCS spectrum for LTE, but the timing of that deployment is dependent on
a variety of factors, including “the pace at which Leap customers transition to AT&T's network, the
amount of spectrum available, whether that spectrum is contiguous to AT&T spectrum, the amount of
future traffic on AT&T's and Leap's networks, and AT&T's plans for deploying additional spectrum in a
CMA.”491 The Applicants also argue that Leap’s south Texas customers will benefit from the transaction

478 See Public Interest Statement at 12.
479 See Aio Wireless Online Goes Live, Also Expands Retail Presence with New Stores in Dallas, (Sep. 12, 2013),
available at http://www.att.com/gen/press-
room?pid=24789&cdvn=news&newsarticleid=36988&mapcode=consumer|mk-retail (last visited Feb. 20, 2014).
480 See Public Interest Statement at 17.
481 See Public Interest Statement at 17-18.
482 See Public Interest Statement at 18.
483 See Public Interest Statement at 14.
484 See Public Interest Statement at 14.
485 See Public Interest Statement at 14-15; Aug. 20, 2013 Applicants Supplemental Response at 5.
486 See Public Interest Statement at 15; Aug. 20, 2013 Applicants Supplemental Response at 5; Nov. 22, 2013
AT&T Initial Response, Exhibit 11.b.1.
487 AT&T February 7 Letter at 1. The original list of markets to be built out was filed with the Aug. 20, 2013
Applicants Supplemental Response. The first revision of that list was filed in the Nov. 22, 2013 AT&T Initial
Response at Exhibit 11.b.1.
488 AT&T February 7 Letter at 1.
489 See Public Interest Statement at 15; Aug. 20, 2013 Applicants Supplemental Response at 5; Nov. 22, 2013
AT&T Initial Response, Exhibit 11.c.
490 See Nov. 22, 2013 AT&T Initial Response at 25.
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as well because Leap’s limited LTE network is less spectrally efficient, supports lower throughput speeds
and is deployed to far fewer areas than AT&T’s 4G LTE network.492
138.
Mr. Smith argues that, while it may be true that the proposed transaction would grant
Leap customers access to AT&T’s broader network, it would come at a higher price; the reason that
regional carriers like Leap provide cheaper service without long-term contracts is because their networks
are not as extensive or fast as the national carriers.493 Mr. Smith argues that regional carriers provide a
cheaper, albeit slower and less extensive, choice for consumers who either do not want or cannot afford
the high costs and commitment demanded by large carriers with national networks.494 Youghiogheny
Communications argues that Cricket already provides 4G LTE in south Texas, rendering an AT&T roll-
out unnecessary, and that Cricket’s voice, 3G, and 4G coverage area in south Texas is superior to those of
AT&T and the larger carriers, so no benefit will be gained by Leap customers’ access to AT&T’s
footprint.495 Mr. Smith claims that if this transaction is allowed to proceed, he and other consumers who
previously sought low-cost alternatives will be left in need of affordable and reliable wireless service.496
139.
Improved Spectral Efficiency. The Applicants contend that Leap is currently using
only about 42 percent of its spectrum in its facilities-based service markets (an area covering 96 million
people).497 The Applicants argue that the transaction will allow more efficient use of the Leap spectrum,
which was primarily deployed to support CDMA EVDO technology. AT&T typically deploys spectrum
to support LTE in 10x10 MHz blocks, with 5x5 configurations as a minimum.498 Even where Leap has
deployed LTE, it has done so in less spectrally efficient narrow-bandwidth deployments (mainly 3x3
MHz and no larger than 5x5 MHz).499 AT&T claims that it will be able to refarm Leap spectrum even
before the full customer migration, and the remaining spectrum will be available for redeployment after
AT&T completes the migration of Leap customers to AT&T’s networks, which is expected within 18
months of closing.500 In many areas, the additional Leap spectrum will allow AT&T to deploy LTE
services in larger contiguous 10x10 MHz (or greater) blocks where it currently has none or a current 5x5
deployment.501
140.
AT&T claims that it will also be able to productively integrate a few thousand
complementary Leap cell sites into its network.502 The integration will create a denser network grid that
will increase network capacity and improve network performance.503
(Continued from previous page)
491 Nov. 22, 2013 AT&T Initial Response at 27.
492 See Joint Opposition at 8 n.29.
493 See Smith Petition to Deny at 9.
494 See Smith Petition to Deny at 9; Smith Reply at 10.
495 See Youghiogheny Communications Petition to Deny at 28.
496 See Smith Petition to Deny at 9; Smith Reply at 9.
497 See Public Interest Statement at 14.
498 See Public Interest Statement at 16; Aug. 20, 2013 Applicants Supplemental Response at 5.
499 See Public Interest Statement at 11.
500 See Public Interest Statement at 16.
501 See Public Interest Statement at 16-17.
502 See Public Interest Statement at 17; Aug. 20, 2013 Applicants Supplemental Response at 4.
503 See Public Interest Statement at 17.
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141.
Mr. Smith questions the Applicants’ claims of improved efficiency, asserting that
AT&T does not explain how eliminating a competitor would increase choices or efficiency because it is
axiomatic that market concentration tends to decrease consumer choices and reduce incentives to put
resources to efficient use.504 Youghiogheny Communications contends that AT&T already has “vast
stores” of unused spectrum that it has not put to better use.505
142.
Additional Cost Savings. The Applicants claim that as Leap’s cell sites are integrated
into AT&T’s network and other sites decommissioned without affecting network performance, AT&T
can eliminate lease, utility, maintenance, and other site-related expenses.506 Additional savings will result
from optimization of the distribution network and through efficiencies in advertising, marketing, customer
support, equipment, and general and administrative costs (such as call center and billing operations).
There will allegedly be additional cost savings from removing redundancy in corporate and overhead
functions.507 Roaming and resale expenses that Leap would have paid as a standalone company will be
substantially reduced, which will lead to lower prices for consumers than would prevail absent such cost
savings.508 Additionally, backhaul costs are among the sources of marginal cost savings that will result
from the transaction.509
143.
Youghiogheny Communications argues that AT&T’s cost savings would be offset by
additional expenses associated with dismantling Leap’s CDMA network. Youghiogheny
Communications argues that if AT&T offers free phones to soften the hit that Leap’s millions of
customers are going to take, the cost-savings benefits touted by the Applicants may have to be offset
against the enormous cost burden of providing free phones to millions of customers.510 Youghiogheny
Communications also argues that the Applicants do not address the cost and serious complications of
having to dismantle and replace entire regional CDMA networks in Chicago and south Texas due to
national security concerns about Chinese manufacturer Huawei.511 It contends that the loss of Cricket
will limit roaming availability and increase roaming costs for customers.512 Mr. Smith argues that this
transaction will force Cricket’s existing customers to purchase new equipment that is compatible with
AT&T’s network.513

C.

Discussion

144.
We have reviewed the claims of the Applicants regarding the benefits they allege
would result from the proposed transaction, as well as their responses to our requests for additional
information and documents. The record provides general support for the Applicants’ contentions that the
proposed transaction would result in some public interest benefits, including for Leap and AT&T

504 See Smith Petition to Deny at 11.
505 Youghiogheny Communications Reply at 14.
506 See Public Interest Statement at 19.
507 See Public Interest Statement at 19.
508 See Public Interest Statement at 19-20.
509 See Public Interest Statement at 20.
510 See Youghiogheny Communications Petition to Deny at 23.
511 See Youghiogheny Communications Petition to Deny at 24; Youghiogheny Communications Reply at 5. See
also
¶¶ 124-25 supra.
512 See Youghiogheny Communications Reply at 11-12.
513See Smith Reply at 10.
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customers. As discussed below, however, given the burden placed on the Applicants, particularly to
make a verifiable showing of the likelihood and magnitude of the claimed benefits, we find that the
current showings are not sufficient by themselves to outweigh the potential for competitive harms we
have found with respect to the proposed transaction.
145.
Competition. We place limited weight on the Applicants’ claims that the proposed
transaction would, overall, lead to increased competition. For the reasons discussed earlier, we have
found potential for competitive harm. In particular, we note that, while AT&T asserts that it will use the
Cricket brand to compete more aggressively for prepaid customers, AT&T’s incentives to compete appear
to be reduced with the elimination of Leap as an independent competitor. Furthermore, AT&T’s efforts
to compete for prepaid customers to date have been very recent and limited in scope. As a result, we can
place only limited weight on AT&T’s claims that it will aggressively compete for prepaid customers.
146.
Enhanced network experience. Based on the current record, we are largely unable to
verify AT&T’s claims that the proposed transaction would lead to the enhancement of its provision of
LTE services to consumers, in particular Leap customers. AT&T has discussed using Leap’s spectrum to
build out LTE service in various CMAs in 60-90 days and other CMAs within 12 months. AT&T’s
current showings do not allow us to place significant weight on such claims. For instance, while AT&T
has attempted to identify specific markets for such buildout, AT&T has submitted three successive filings
listing different CMAs that it plans to build out in 60-90 days, and it admits that even the most current list
is subject to revision as it learns more about Leap’s operations and continues its integration planning.
Given the considerable uncertainty regarding AT&T’s plans, it is difficult to verify their claims, and we
therefore cannot place significant weight on this claimed benefit.
147.
We also cannot place any weight on AT&T’s suggestion that it will ultimately use all
of Leap’s PCS spectrum for LTE. AT&T admits that the timing of any such additional deployment is
contingent on a number of factors, including the pace at which Leap customers transition to AT&T’s
network, the amount of spectrum available, and whether that spectrum is contiguous.514 AT&T only
states that it will “ultimately” use all of Leap’s PCS spectrum for LTE.515 In the absence of any specific
time commitment from AT&T on that point, and given the contingencies that must be met before AT&T
can deploy, we find that any claimed benefit is too speculative and distant in time to be credited.
148.
Another issue with AT&T’s claim of public interest benefits for Leap customers
resulting from use of a superior AT&T network is that AT&T itself estimates that many Leap customers
will not receive that benefit. AT&T has estimated that it will transition [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | [END HIGHLY CONFIDENTIAL INFORMATION] of
Leap customers onto its network.516 We cannot fully credit the Applicants with providing an improved
network experience to Leap’s customers if [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | |
| | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION] of Leap customers never transition to
AT&T’s network. The disruption to Leap customers who will lose their current service and be forced to
arrange for alternative service will reduce any net benefit resulting from some Leap and AT&T customers
receiving an enhanced network experience from AT&T.
149.
Improved spectral efficiency. Based on the record before us, we find that AT&T’s
acquisition of Leap’s spectrum would likely result in improved spectral efficiency in certain markets, and
therefore should create some transaction-specific benefits. We find, however, that the benefits are not as
substantial as claimed by the Applicants.

514 See Nov. 22, 2013 AT&T Initial Response at 27.
515 See Nov. 22, 2013 AT&T Initial Information Response Request at 27.
516 ATT-FCC-000034583 at 9 (Oct. 2, 2013).
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150.
While the parties claim that Leap utilizes 42 percent of its spectrum, providing
significant potential benefits from utilization of the unused Leap spectrum, it appears from the record that
Leap uses considerably more than 42 percent of its spectrum. The 42 percent figure combines both PCS
and AWS-1 spectrum and was derived by evaluating usage as a function of MHz-POPs on a market-by-
market basis. We see at least two issues with the Applicants’ study. First, in order to properly evaluate
spectrum utilization, the PCS and AWS-1 bands should be evaluated separately. Our review of the
available data shows that Leap uses its PCS spectrum more intensively than its AWS-1 spectrum.
Second, the study offered by the Applicants fails to account for site-specific allocated bandwidth and the
site’s corresponding population coverage as a measure of frequency use. Leap’s analysis517 does not use a
site-dependent approach that considers each site’s utilized bandwidth and the site’s covered population.518
Instead the analysis aggregates unused bandwidth over the entire network, without any weighting of
bandwidth by population, resulting in the Applicants underestimating spectrum utilization. It appears
that, measured in terms of MHz-POPs, Leap’s use of its PCS and AWS-1 spectrum considerably exceeds
42 percent. To the extent the Applicants argue that AT&T will use spectrum more intensively and
efficiently than Leap, we conclude that the claimed benefit is not as great as claimed by the Applicants
because they underestimate Leap’s current spectrum utilization.
151.
We also find that AT&T’s claimed spectral efficiency benefits are of limited
significance because, in the majority of the CMAs in question, the amount of Leap spectrum available
will only allow AT&T to add a 5X5 megahertz channel, which is the minimum configuration used by
AT&T for LTE. We do not find the addition of a 5X5 megahertz channel as a meaningful demonstration
of spectral efficiency, particularly when the Applicants themselves describe a 5X5 megahertz channel as
relatively inefficient.519
152.
Additional cost savings. 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.520 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,521 making it
difficult here to quantify the magnitude of these asserted benefits. We must also take into account
additional costs AT&T will incur as it migrates customers and integrates Leap’s spectrum into its
network.
153.
Our evaluation of the claimed public interest benefits gives limited weight to many of
the benefits presented that would go to Leap’s customers as a result of the proposed transaction, such as a
higher-quality, more robust, and competitive prepaid offering, expanded network capacity, and savings in

517 LEAP-FCCEXH-00006592.
518 A site-dependent approach multiplies each site’s used bandwidth by the site’s covered population, thus weighting
the different utilization characteristics commonly found between core sites and fringe area sites by population.
519 See Public Interest Statement at iii (“AT&T’s 4G deployments are far more efficient and offer customers higher
throughput speeds than Leap’s 3G EVDO and limited narrow-bandwidth LTE deployments.”); Aug. 20, 2013
Applicants Supplemental Response at 4 (Leap’s LTE deployments are no larger than 5x5 megahertz).
520 ATT-FCC-000033728 (Jul. 11, 2013), [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL INFORMATION].
521 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.
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network and operating costs.522 These asserted benefits are available to Leap customers in locations
where AT&T is already offering these services as a competitor to Leap.
154.
Conclusion. 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.
Using the sliding-scale approach, however, we are unable on the basis of this record to conclude that
these public interest benefits are sufficiently large enough to outweigh the potential public interest harms
we have identified in certain individual markets.

VII.

REMEDIES

A.

Introduction

155.
The 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, we 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.
156.
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. We find that the transaction as proposed has the potential to cause some competitive and other
public interest harms in several local markets, as well as to value-conscious consumers generally.
Moreover, although we find some potential public interest benefits likely to arise from the transaction in
terms of spectral efficiency, these potential benefits by themselves are insufficient to outweigh the
potential harms.
157.
In recent filings supplementing the record on some key issues, however, AT&T has made
several voluntary commitments, which as explained below allow us to find that the proposed transaction
overall would be in the public interest.523 AT&T has agreed to file quarterly reports detailing its progress
in complying with these voluntary commitments. Those commitments include spectrum divestitures in
certain markets, where we have found the potential for spectrum aggregation to lead to anticompetitive
harm. These divestitures will help ensure that AT&T’s competitors have access to sufficient spectrum in
those markets. AT&T also is committing to deploy LTE service using unused Leap spectrum within 90
days or 12 months of closing, including some markets in south Texas. This deployment will ensure that
this spectrum will not lie fallow and will help to ensure that consumers in current Leap service areas will
benefit from network improvements to AT&T’s advanced 4G network technologies. AT&T also will
build out LTE service on its network in 70 percent or 80 percent of the geographic area in specific
markets in south Texas within 18 months of closing. This will ensure that consumers in those markets
have access to advanced 4G LTE services.
158.
In addition, AT&T will be offering certain rate plans targeted to help value-conscious and
Lifeline customers, which will provide additional assurance that AT&T will compete vigorously for
value-conscious customers and will be attractive to Leap customers who may wish to migrate to AT&T’s
network. To deal with issues affecting Leap prepaid customers wanting to migrate onto AT&T’s GSM-
based network, AT&T will be offering a device trade-in credit program and a feature phone device trade-
in program to certain groups of Leap customers prior to discontinuing CDMA service in a particular area.
These commitments will help ensure that Leap customers have future access to wireless service and will

522 See Joint Opposition at 2-3.
523 See Letter from Joan Marsh, Vice President – Federal Regulatory, AT&T, to Roger C. Sherman, Acting Chief,
Wireless Telecommunications Bureau, WT Docket No. 13-193 (filed Mar. 6, 2014) (“AT&T Commitment Letter”).
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facilitate the migration of Leap’s customers to the AT&T network. To address the CDMA roaming issues
discussed above, AT&T is committing to honor the rates, terms and conditions of the CDMA roaming
agreements that AT&T is assuming from Leap, and to offer CDMA voice and data roaming consistent
with applicable Commission roaming rules for so long as AT&T operates Leap’s CDMA network. This
should facilitate the provision of roaming services during the network transition. Finally, on the Flat
Wireless issues, AT&T is committing that, to the extent the AT&T/Leap transaction is consummated
prior to Cricket’s sale of its interest in Flat, it will use reasonable best efforts to cause Cricket to sell its
interest in Flat as soon as practicable thereafter and will take certain steps detailed below in the meantime
to ensure that AT&T does not participate in the affairs of a competitor.
159.
As discussed in detail below, we find that in light of these commitments, which become
conditions to our approval, the public interest benefits of the proposed transaction outweigh the likelihood
of significant public interest harms, such that overall, the proposed transaction is in the public interest.
For example, we note that the commitments providing for spectrum divestitures, the deployment of
unused spectrum, the build out of LTE service, rate plans, and customer migration will all apply to the
south Texas markets that are of particular concern. They will ameliorate the potential harms and ensure
public interest benefits in those markets by, among other things, ensuring that AT&T has every incentive
to provide higher quality service, and minimizing customer dislocations that might result from the
proposed transaction.
160.
We also find that each of the commitments AT&T has made is necessary in order to
address potential harms from the proposed transaction.524 Without these commitments, we would be
unable to conclude that the benefits of the transaction outweigh the harms. We therefore impose each of
the commitments made by AT&T as conditions of our consent to the proposed transaction.

B.

Spectrum Divestitures

161.
Record. We have found above that the proposed transaction would be likely to cause
significant competitive harm as a result of spectrum aggregation in a number of geographic markets.
Specifically, we have concluded that, in those markets, there is a significant potential that AT&T would
have the ability to foreclose or significantly raise rivals’ costs.
162.
AT&T has made a commitment that, within 6 months of the transaction closing, AT&T
will file applications with the Commission to assign or transfer control of the amounts of spectrum
(“Divestiture Assets”) in the geographic areas identified in Attachment B.525 AT&T reserves the right,
upon notice to the Bureau, to change the specific type of spectrum to be divested in any geographic area
based on further analysis performed after the merger’s close.526 Upon application by the Applicants to the
Bureau, the Bureau may grant one or more extensions not to exceed 60 days in the aggregate to allow the
Applicants further time to dispose of the Divestiture Assets.527 To the extent the Applications are not

524 Regarding Youghiogheny Communications’ argument on procedural unfairness in considering AT&T’s
commitments, we note that we have fully analyzed the public interest harms associated with this transaction,
including those alleged by Youghiogheny Communications, and find that the conditions that we impose are
sufficient to address the potential harms arising out of this transaction. See Letter from Donald J. Evans, Counsel
for Youghiogheny Communications, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission,
WT Docket 13-193, at 1-2 (Mar. 10, 2014) (“Youghiogheny Communications Mar. 10, 2014 Ex Parte”);
Youghiogheny Communications Mar. 10, 2014 Clyburn Office Ex Parte at 1.
525 See AT&T Commitment Letter, Attachment A (list of commitments) at 3, Attachment B (list of divestiture
markets). A list of the markets where AT&T will make spectrum divestitures is also included in Appendix D.
526 See AT&T Commitment Letter, Attachment A at 3.
527 See AT&T Commitment Letter, Attachment A at 3.
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filed by the relevant date, or by any extended date allowed by the Bureau, the Commission may require
AT&T to surrender the designated spectrum.528
163.
Discussion. We conclude generally that these spectrum divestitures will adequately
prevent AT&T from foreclosing competing service providers in those markets based on undue spectrum
aggregation. With respect to Youghiogheny Communications’ request to require divestiture in south
Texas, we have carefully reviewed each of those markets and find that the spectrum divestitures offered
by AT&T will mitigate competitive harm.

C.

Spectrum Deployment Commitments

164.
Record. AT&T has agreed that within 30 days after it closes the transaction, it will
provide the Commission with a list of the markets where it anticipates it will begin deploying Leap's
unused contiguous AWS-1 spectrum for LTE service within 90 days of merger close, and where it
anticipates it will begin deploying Leap's unused AWS-1 or PCS spectrum for LTE service within 12
months of closing.529 AT&T commits to provide detailed quarterly reports outlining its progress toward
completing these deployments.530
165.
Discussion. We find that these commitments will lead to public interest benefits
regarding access to advanced broadband technologies by consumers in these service areas, including
customers of both AT&T and Leap, and ensuring the use of spectrum that is currently unused. AT&T's
commitments outlined above will help to ensure that all consumers in the current Leap service areas will
benefit from the deployment of advanced 4G network technologies.

D.

LTE Network Deployment in South Texas

166.
Record. Within 12 months of the transaction’s closing, AT&T will deploy LTE service
sufficient to provide coverage to 90 percent of the geographic area in 2 CMAs in south Texas: Corpus
Christi, TX (CMA 112), and McAllen-Edinburg-Mission, TX (CMA 128).531 Within 12 months of the
merger’s closing, AT&T will deploy LTE service sufficient to provide coverage to 50 percent of the
geographic area in: Laredo, TX (CMA 281), Texas 19 - Atascosa (CMA 670), and Texas 20 - Wilson
(CMA 671), and to 40 percent of the geographic area in Texas 18 - Edwards (CMA 669).532 Further,
within 18 months of the transaction’s closing, AT&T will deploy LTE service sufficient to provide
coverage to 80 percent of the area in: Laredo, Texas 19, and Texas 20.533 Finally, within 18 months of
the transaction’s closing, AT&T will deploy LTE service sufficient to provide coverage to 70 percent of
the area in Texas 18.534 These LTE deployment commitments are dependent upon AT&T’s ability to
secure zoning and permitting for new equipment and to acquire or supplement high speed backhaul
transport as required for new sites as a predicate to deploying LTE in AT&T’s network.535
167.
We find that these commitments will lead to significant public interest benefits

528 See AT&T Commitment Letter, Attachment A at 3.
529 See AT&T Commitment Letter, Attachment A at 4.
530 See AT&T Commitment Letter, Attachment A at 4. See also section VII.I. infra.
531 See AT&T Commitment Letter, Attachment A at 3.
532 See AT&T Commitment Letter, Attachment A at 3.
533 See AT&T Commitment Letter, Attachment A at 3.
534 See AT&T Commitment Letter, Attachment A at 3.
535 See AT&T Commitment Letter, Attachment A at 3.
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regarding access to advanced broadband technologies by consumers in these south Texas markets,
including customers of both AT&T and Leap. We find these commitments to be particularly significant
in light of the potential competitive harms we have identified in those markets. AT&T’s commitments
also will help ensure that all consumers in these south Texas markets will benefit from the deployment of
advanced 4G network technologies.

E.

Rate Plan Commitments

168.
Record. Public Knowledge asks the Commission to require AT&T to: (1) continue
offering the same prepaid service as Leap, with the same rates, terms and conditions, for a minimum of
four years for existing Leap customers and two years for new prepaid customers; (2) allow existing Leap
customers, for a minimum of four years, to upgrade their plans or devices without losing the terms and
conditions currently available to them; (3) not throttle its prepaid customers when they are using their
guaranteed “Full-Speed Data”; and (4) make the same handsets available to its prepaid customers that it
does to its postpaid customers.”536 James Jones, a Cricket customer, argues that there should be no loss of
service capacity for voice or data for Cricket CDMA only devices, and an equal or better level of service
when Cricket’s customers transitioned to AT&T’s network.537 He also asks that there be no increase in
prices for Cricket’s existing plans and that there be no loss of special pricing plans and discounts.538
Finally, Mr. Jones argues that AT&T’s activation fee be limited to the fees Cricket has customarily
charged its customers and that AT&T unlock replacement devices.539
169.
AT&T has committed, for all customers who maintain their existing Leap rate plan
during the transition period (including Lifeline customers), that it will honor those existing rates (and for
Lifeline customers, the corresponding discounts) until the earlier of such time as the customer voluntarily
upgrades his or her device, chooses another rate plan, migrates to the New Cricket platform, or until
sunset of the CDMA network, which AT&T anticipates will happen between 12 to 18 months from
closing, depending on the market.540 This commitment will remain in effect even where AT&T elects to
relinquish Leap’s ETC designation.541
170.
There also are a series of rate plans that AT&T has committed to providing to new and
transitioning customers upon merger close. For 18 months following the merger's close, AT&T will
make available a nationwide pre-paid rate plan for feature phones that includes unlimited talk (local and
long distance), text, and data, in accordance with published speed policies, and no roaming charges, at a
rate that will not exceed $40/month (including all taxes and fees).542 AT&T currently plans that the
$40/month rate plan will include unlimited text/picture/video messaging, unlimited data with a 500 MB
high-speed data allowance with lower speeds for additional usage, voicemail, call waiting, and call

536 See Public Knowledge Petition to Deny at 19.
537 See Informal Comments of James Jones at 1 (filed Feb. 4, 2014) (Jones Comments).
538 See Jones Comments at 2.
539 See Jones Comments at 2.
540 See Letter from Joan Marsh, Vice President – Federal Regulatory, AT&T, to Marlene H. Dortch, Secretary,
Federal Communications Commission, WT Docket No. 13-193 at 1-2 (filed Mar. 12, 2014) (“AT&T March 12,
2014 Clyburn Ex Parte”).
541 See March 12, 2014 AT&T Clyburn Ex Parte at 2.
542 See AT&T Commitment Letter, Attachment A at 3. See also Letter from Joan Marsh, Vice President – Federal
Regulatory, AT&T, to Marlene H. Dortch, Secretary, Federal Communications Commission, WT Docket No. 13-
193 at 1 (filed Mar. 11, 2014) (“March 11, 2014 AT&T Ex Parte”); Joint Opposition at 7.
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forwarding.543 In CMAs in which Leap currently has a facilities-based CDMA network, AT&T will, for a
period of at least 12 months after the merger’s closing, offer at least one prepaid rate plan priced below
the $40 rate plan referenced in AT&T’s Commitment Letter.544 That rate plan, which will include
unlimited voice and text and a price that includes all taxes and fees, is specifically designed to appeal to
value-conscious and Lifeline-eligible consumers.545 Exhibit 15.32 compares the existing Cricket rate
plans and rate plans that AT&T currently proposes that the New Cricket will offer at launch, including the
plan described below.546 [BEGIN HIGHLY CONFIDENTIAL INFORMATION]| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | || [END HIGHLY CONFIDENTIAL INFORMATION].547
171.
Discussion. We conclude that these rate plan commitments will provide public interest
benefits to both AT&T and Leap customers, including Lifeline customers. As noted above, we expressed
concern that the elimination of Leap as a competitor would mean AT&T would have a reduced incentive
to compete. AT&T’s commitment to honor the existing rate plans of Leap customers (including,
importantly, the discounts that Leap Lifeline customers receive) so long as Leap’s CDMA network is
running and the customer does not make voluntary changes to their service will help protect those
customers during the network transition. AT&T’s other rate plan commitments will provide additional
assurance that AT&T will compete vigorously for value-conscious customers and will be attractive to
Leap customers who may wish to migrate to AT&T’s network. The [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
will compare favorably with any Lifeline plans from which Leap Lifeline customers
may have to transition. We do not find the additional conditions requested by Public Knowledge and Mr.
Jones to be necessary in order to remedy transaction-specific harms.548

F.

Feature Phone Trade-In Program, iPhone SIM Card Replacement Program, and
Device Trade-In Credits Program

172.
Record. Mr. Jones asks that AT&T be required to replace customer devices at its
expense, including devices that are only used on occasion, for as long as the device is functioning.549
173.
AT&T has committed to implement a trade-in program that allows eligible customers to

543 See AT&T March 11, 2014 Ex Parte at 1.
544 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 4.
545 See March 12, 2014 AT&T Clyburn Ex Parte at 1.
546 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 4.
547 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 5.
548 As described above, see ¶ 115, supra, AT&T has indicated that it will maintain Cricket’s ETC designations for
some period of time and will continue to fulfill its Lifeline ETC obligations and comply with relevant requirements.
We conclude that it serves the public interest for Leap/Cricket to continue to operate as a Lifeline only ETC
following consummation of the proposed transfer of control. We emphasize that nothing in this Memorandum
Opinion and Order
should be construed as authorizing Leap to relinquish its ETC designation. To relinquish Leap’s
(including Cricket’s) ETC designation, Leap (which will become a subsidiary of AT&T after consummation of the
proposed transaction) must comply separately with any state or federal relinquishment rules and requirements. Until
both Leap and AT&T comply with the federal and state relinquishment rules and requirements, Leap’s obligation to
provide discounted services to its Lifeline customers will remain unaffected.
549 See Jones Comments at 2.
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trade in their Leap prepaid feature phone for a Cricket prepaid feature phone without charge, subject to
certain conditions. AT&T will advise Leap CDMA customers of this trade-in program and its terms
when it becomes available.550
174.
AT&T also has made the following commitment regarding Leap customers who own
iPhone models 4s, 5, 5c, and 5s. Specifically, AT&T will establish a process by which Leap customers
with legacy Leap iPhone models 4s, 5, 5c, and 5s can visit a New Cricket store and receive a replacement
SIM card that will allow the customer to migrate to AT&T’s network without having to replace his or her
device.551
175.
AT&T also has committed to provide customers with Leap smartphones that are not
compatible with the AT&T network significant credits to be used for the purchase of a new Cricket
smartphone, subject to certain conditions. AT&T will advise Leap CDMA customers of this trade-in
credit program and its terms when it becomes available.552
176.
AT&T has clarified its device trade-in credit program commitment by stating that any
customer who receives a device trade-in credit pursuant to that program will be able to acquire a low-cost
smartphone with that credit at no or minimal additional cost to the customer.553 For example, AT&T

550 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 6-7. Specifically, [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
.
551 See Letter from Joan Marsh, Vice President – Federal Regulatory, AT&T, to Marlene H. Dortch, Secretary,
Federal Communications Commission, WT Docket No. 13-193 (filed Mar. 12, 2014) (“AT&T March 12, 2014 Ex
Parte
”).
552 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 5-6. Specifically, [BEGIN HIGHLY
CONFIDENTIAL INFORMATION]
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [END HIGHLY CONFIDENTIAL
INFORMATION]
.
553 See March 12, 2014 AT&T Clyburn Ex Parte at 2.
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represents that its Aio Wireless subsidiary currently offers smartphones at price levels less than $50 and
additional smartphones at price levels less than $100.554 Consequently, AT&T anticipates that the device
credits to which AT&T has committed to provide to qualifying Leap smartphone customers will permit
those customers to acquire a New Cricket smartphone with no or minimal out-of-pocket expense.555
177.
Discussion. We find that these commitments will ensure that Leap customers have future
access to wireless service and will facilitate the migration of Leap’s customers to the AT&T network.
Those public interest benefits are responsive to our concerns regarding the competitive impact of the
transaction on consumers and AT&T’s efforts to migrate Leap’s customers to the AT&T network. In
particular, we believe the feature phone trade-in program, IPhone SIM card replacement program, and
device credits will help ensure that Leap customers, including Lifeline customers who purchased phones,
will have competitive wireless service options available once AT&T discontinues Leap’s CDMA service.

G.

Roaming Commitments

178.
Record. We have concluded that questions remain whether AT&T will continue to
honor roaming agreements of providers with Leap during its network transition while providers are
making alternative roaming arrangements.556 Commenters request certain conditions relating to roaming
during the transition. NTCH requests that AT&T maintain Leap’s CDMA network for a reasonable
period of time, and honor all existing roaming contracts on that network.557 CCA requests that the
Commission require AT&T to “honor existing Leap roaming agreements for the full term of the
agreement or four years from the date of this Transaction’s closing (whichever is longer) . . .”558
CCA also maintains that AT&T should be restricted from cancelling any roaming contracts.559 Flat
Wireless requests unspecified protections for Leap’s current roaming partners, to reduce the impact of this
transaction on competition in the nationwide CDMA roaming market.560
179.
AT&T has committed to honor the rates, terms and conditions of the CDMA roaming
agreements that AT&T is assuming from Leap, and to offer CDMA voice and data roaming consistent
with applicable Commission roaming rules for so long as AT&T operates Leap’s CDMA network.561
Nothing in this commitment will require AT&T to modify the rates, terms and conditions of any CDMA
roaming agreement it assumes from Leap.562
180.
Discussion. We impose the commitment made by AT&T to honor existing CDMA
voice and data roaming services over Leap’s network, so long as that network continues to operate. The
Commission has recognized 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

554 See March 12, 2014 AT&T Clyburn Ex Parte at 2.
555 See March 12, 2014 AT&T Clyburn Ex Parte at 2.
556 See ¶ 108 supra.
557 See NTCH Petition to Deny or Condition at 1, 3-4.
558 See CCA Reply at 11. See also CCA Petition to Condition at 3, 7, 16-17; CCA Jan. 3, 2014 Ex Parte at 1, 6;
CCA Feb 6, 2014 Ex Parte at 3.
559 See CCA Petition to Condition at 17.
560 See Jan. 6, 2014 Flat Wireless Ex Parte at 3-4.
561 See AT&T Commitment Letter, Attachment A at 3.
562 See AT&T Commitment Letter, Attachment A at 3.
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transaction.563 AT&T’s commitment is responsive to our concern about the ability of wireless providers
to roam on Leap’s CDMA network while that network continues to operate. 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 Leap CDMA network. These same providers will have
additional time subsequent to the closing of the proposed transaction to take the necessary steps to obtain
alternative CDMA roaming arrangements in the current Leap service areas, if that is what they choose to
do. We find that AT&T’s voluntary commitment to honor existing roaming agreements is in the public
interest.
181.
Nothing in this commitment will be construed as limiting the rights of any carrier to
pursue roaming arrangements pursuant to Commission rules and the remedies they afford. We find that
this commitment is sufficient to provide continuity of CDMA roaming services in the markets subject to
this transaction. We do not find the specific facts of the situation warrant a condition imposing an
obligation on AT&T to enter into a roaming agreement with other carriers that replicates the same rates,
terms, and conditions as in the AT&T/Leap breakup roaming agreement, or any existing Leap roaming
agreement.
182.
Further, we decline to adopt the roaming condition that AT&T be required to maintain
the CDMA network for a certain number of years post-transaction in order to support new roaming
contracts. It has not been shown why the duty of carriers to provide automatic roaming would not be
adequately addressed by the data roaming rule adopted by the Commission in 2011. In addition, there are
other CDMA roaming partners throughout Leap’s footprint.

H.

Flat Wireless Commitments

183.
We noted above that there appears to be at least a potential for AT&T to have the ability
to influence Flat’s affairs.564 AT&T states that Cricket has negotiated a definitive agreement to sell its
interests in Flat and is prepared to move forward with the sale, but that Cricket and Flat currently are in
arbitration and the arbitrator has stayed the disposition of Cricket’s interests in Flat pending resolution of
the arbitration.565 Leap now anticipates that Cricket will consummate the sale of its interests in Flat in
April 2014.566
184.
With regard to Flat Wireless, AT&T commits as follows: In the event that Cricket
Communications, Inc. still holds any interest in Flat at the consummation of the AT&T/Leap transaction,
AT&T will immediately deliver written notice to Flat notifying it, its Board of Managers and its Members
that, for so long as Leap, Cricket, or any of its affiliates remains a Member of Flat (hereinafter “Cricket
Members”), neither AT&T nor any Cricket Member shall exercise any right that it may have under
Article 6, Article 12, or Article 13 of the Amended and Restated Company Agreement of Flat Wireless,
LLC or elsewhere to: (1) acquire any additional interest in Flat, by call under Section 13.07 of the Flat
Wireless LLC Agreement or otherwise, except in connection with one or more transactions subject to
review and approval by the Federal Communications Commission pursuant to the processes outlined in
47 C.F.R. §§ 1.948 and 63.24; (2) choose and determine a Manager of Flat or place or cause to be placed
any AT&T employee, representative or agent on Flat’s Board of Managers; (3) receive or review any

563 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8746-88748 ¶¶ 95-101. See also AT&T-ATN Order, 28 FCC
Rcd at 13704 ¶ 59-60.
564 See ¶ 129 supra. As discussed above, on March 3, 2014, AT&T has waived the condition requiring the
disposition of all Flat interests prior to the consummation of the AT&T/Leap transaction. See ¶ 10 supra.
565 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 2.
566 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 2.
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confidential and or competitively sensitive information pertaining to Flat; provided however, that AT&T
shall be entitled to receive such information as is necessary for accounting and tax purposes and for
Cricket to sell its interest in Flat, including a statement of its allocated share of income, gains, losses,
deductions, and credits for each taxable year, on the condition that such information is used solely for
those purposes.567 Finally, to the extent that the AT&T/Leap transaction is consummated prior to
Cricket’s sale of its interest in Flat, AT&T commits to use reasonable best efforts to cause Cricket to sell
its interest in Flat as soon as practicable thereafter.568
185.
We conclude that AT&T’s commitments address our concerns that its ownership interest
in Flat will give it the ability to influence Flat’s affairs or to reduce Flat’s incentive to act as a competitor
to AT&T. Accordingly, we need not give further consideration to the interests of Flat Wireless in
reviewing the transaction.

I.

Progress Reports

186.
For two years following the date of merger close, AT&T will file with the Commission
a quarterly detailed report on the status of the implementation of these commitments and the migration of
Leap’s customers.569 If the network deployment commitments are not met within the two year reporting
period, this reporting requirement will be extended with respect to those deployment commitments until
such time as both deployment commitments are fully met or waived by the FCC.570 Each such report will
be due 30 days following the end of the calendar quarter covered by the report, and the first such report
will cover the period from the merger closing thru the end of the first full quarter thereafter.571
187.
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.

VIII.

BALANCING THE PUBLIC INTEREST BENEFITS AND THE HARMS

188.
In sum, we find that the transaction as proposed has the potential to cause some
competitive and other public interest harms in several local markets, as well as to value-conscious
consumers generally. Moreover, although we find some potential public interest benefits likely to arise
from the transaction in terms of spectral efficiency, these potential benefits by themselves are insufficient
to outweigh the potential harms.
189.
However, we find that considering AT&T’s various commitments, involving spectrum
divestitures, the offering of certain rate plans, LTE network deployment, roaming, and device trade-in and
trade-in credits for certain groups of current Leap customers, all of which we impose as conditions to our
approval, in conjunction with the public interest benefits we find will likely arise from the transaction,
there is sufficient evidence on this record for us to conclude that Applicants have met their burden of
demonstrating that the likely public interest benefits outweigh the likely public interest harms, such that
we are able to approve the proposed transaction.

IX.

ORDERING CLAUSES

190.
ACCORDINGLY, having reviewed the Applications and the record in these matters, IT

567 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 2-3.
568 See Mar. 6, 2014 AT&T Fifth Supplemental Response at 3.
569 See AT&T Commitment Letter, Attachment A at 4.
570 See AT&T Commitment Letter, Attachment A at 4.
571 See AT&T Commitment Letter, Attachment A at 4.
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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
transfer of control of Cricket License Company, LLC, Leap Wireless International, Inc., and STX
Wireless License, LLC to AT&T, Inc. and the application to assign Lower 700 MHz Band A Block
license WQJQ707 from Cricket License Company, LLC to Leap Licenseco Inc. are GRANTED to the
extent specified in this Memorandum Opinion and Order and subject to the conditions specified herein.
191.
IT IS FURTHER ORDERED that the above grant shall include authority for the transfer
or assignment of any applications regarding the Leap 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.
192.
IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and (j), 303(r), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303(r), 309, 310(d),
the Petitions to Deny filed by Broadvox-CLEC, LLC; David K. Smith; The Greenlining Institute; NTCH,
Inc.; Public Knowledge, Consumer Action, and the Writers Guild of America, West; and Youghiogheny
Communications, LLC are DENIED for the reasons stated herein.
193.
IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 303(r), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), (j), 303(r), 309, and 310(d),
the request for conditions in the Petitions or Comments filed by the Broadvox-CLEC, LLC; Competitive
Carriers Association; David K. Smith; The Greenlining Institute; Infrastructure Networks, Inc.; NTCH,
Inc.; Public Knowledge, Consumer Action, and the Writers Guild of America, West; The Rural Wireless
Association, Inc.; and Youghiogheny Communications, LLC are DENIED for the reasons stated herein.
194.
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.
195.
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
Roger C. Sherman
Acting Chief
Wireless Telecommunications Bureau
Mindel De La Torre
Chief
International Bureau
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APPENDIX A

List of Applications

Applications for consent to the transfer of control of AWS-1, PCS, and Common Carrier Fixed
Point to Point licenses:

File No.

Licensee/Lessee

Transferee

Lead Call Sign

0005860676 (Lead Cricket License
AT&T Inc.
KNLF367
Application)
Company, LLC
0005860985
STX Wireless License,
AT&T Inc.
KNLF914
LLC
0005861153
Cricket License
AT&T Inc.
WQDS850
Company, LLC
Application for consent to assignment of a 700 MHz A Block license:

File No.

Assignor

Assignee

Call Sign

0005879272
Cricket License
Leap Licenseco Inc. WQJQ707
Company, LLC
Applications for consent to the transfer of control of international section 214 authorizations:

File No.

Authorization Holder

Transferee

Authorization Number

ITC-T/C-
Leap Wireless
AT&T Inc.
ITC-214-20011011-00527
20130801-00207
International, Inc.
ITC-T/C-
STX Wireless License,
AT&T Inc.
ITC-214- 20100604-00227
20130801-00208
LLC
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APPENDIX B

List of Filings

Petitions and Comments

Broadvox-CLEC, LLC
Competitive Carriers Association
David K. Smith
The Greenlining Institute
Infrastructure Networks, Inc.
NTCH, Inc.
Public Knowledge, Consumer Action, and the Writers Guild of America, West
The Rural Wireless Association, Inc.
Youghiogheny Communications, LLC

Opposition

AT&T, Inc. and Leap Wireless International, Inc.

Replies

Broadvox-CLEC, LLC
Competitive Carriers Association
David K. Smith
Infrastructure Networks, Inc.
NTCH, Inc.
Public Knowledge, Consumer Action, and the Writers Guild of America, West
The Rural Wireless Association, Inc.
Youghiogheny Communications, LLC
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APPENDIX C

Markets Identified by the Initial Screen

CMAs Identified by the HHI Screen:

Market

Market Name


CMA 8
Washington, DC-MD-VA
CMA 10
Houston, TX*
CMA 11
St. Louis, MO-IL*
CMA 13
Pittsburgh, PA*
CMA 14
Baltimore, MD*
CMA 18
San Diego, CA*
CMA 19
Denver-Boulder, CO*
CMA 25
Buffalo, NY*
CMA 26
Phoenix, AZ*
CMA 30
Portland, OR-WA*
CMA 33
San Antonio, TX*
CMA 36
Memphis, TN-AR-MS*
CMA 37
Louisville, KY-IN*
CMA 40
Dayton, OH*
CMA 45
Oklahoma City, OK*
CMA 46
Nashville-Davidson, TN*
CMA 47
Greensboro-Winston-Salem-High Point, NC*
CMA 53
Syracuse, NY*
CMA 57
Tulsa, OK*
CMA 61
Charlotte-Gastonia, NC*
CMA 65
Omaha, NE-IA*
CMA 71
Raleigh-Durham, NC*
CMA 74
Fresno, CA*
CMA 75
Austin, TX*
CMA 77
Tucson, AZ*
CMA 81
El Paso, TX*
CMA 86
Albuquerque, NM*
CMA 88
Chattanooga, TN-GA
CMA 89
Wichita, KS*
CMA 90
Charleston-North Charleston, SC*
CMA 92
Little Rock-North Little Rock, AR*
CMA 93
Las Vegas, NV*
CMA 109
Spokane, WA

 An asterisk (*) denotes a Top 100 market (as ranked by U.S. 2010 Census data).
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CMA 112
Corpus Christi, TX
CMA 116
Lexington-Fayette, KY
CMA 117
Colorado Springs, CO*
CMA 128
McAllen-Edinburg-Mission, TX*
CMA 134
Atlantic City, NJ
CMA 135
Eugene-Springfield, OR
CMA 138
Macon-Warner Robins, GA
CMA 142
Modesto, CA
CMA 145
Hamilton-Middletown, OH
CMA 148
Salem, OR
CMA 150
Visalia-Tulare-Porterville, CA
CMA 155
Savannah, GA
CMA 160
Killeen-Temple, TX
CMA 162
Brownsville-Harlingen, TX
CMA 165
Fort Smith AR-OK
CMA 170
Galveston-Texas City, TX
CMA 171
Reno, NV
CMA 180
Springfield, OH
CMA 182
Fayetteville-Springdale, AR
CMA 190
Boise City, ID
CMA 197
Lake Charles, LA
CMA 209
Clarksville-Hopkinsville, TN/KY
CMA 210
Fort Collins-Loveland, CO
CMA 216
Janesville-Beloit, WI
CMA 241
Pueblo, CO
CMA 243
Greeley, CO
CMA 273
Kankakee, IL
CMA 281
Laredo, TX
CMA 285
Las Cruces, NM
CMA 287
Bryan-College Station, TX
CMA 291
Pine Bluff, AR
CMA 300
Victoria, TX
CMA 322
Arizona 5 – Gila
CMA 327
Arkansas 4 – Clay
CMA 333
Arkansas 10 - Garland
CMA 339
California 4 - Madera
CMA 347
California 12 - Kings
CMA 432
Kansas 5 – Brown
CMA 449
Kentucky 7 - Trimble
CMA 545
Nevada 3 – Storey
CMA 592
Ohio 8 – Clinton
CMA 601
Oklahoma 6 - Seminole
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CMA 606
Oregon 1 - Clatsop
CMA 620
Pennsylvania 9 - Greene
CMA 632
South Carolina 8 - Hampton
CMA 651
Tennessee 9 - Maury
CMA 666
Texas 15 – Concho
CMA 667
Texas 16 - Burleson
CMA 669
Texas 18 - Edwards
CMA 670
Texas 19 - Atascosa
CMA 671
Texas 20 – Wilson

CMAs Identified by the Spectrum Screen:

Market

Market Name

CMA 101
Beaumont-Port Arthur, TX
CMA 109
Spokane, WA
CMA 112
Corpus Christi, TX
CMA 128
McAllen-Edinburg-Mission, TX*
CMA 142
Modesto, CA
CMA 162
Brownsville-Harlingen, TX
CMA 170
Galveston-Texas City, TX
CMA 171
Reno, NV
CMA 197
Lake Charles, LA
CMA 281
Laredo, TX
CMA 322
Arizona 5 – Gila
CMA 338
California 3 - Alpine
CMA 339
California 4 - Madera
CMA 341
California 6 - Mono
CMA 378
Georgia 8 - Warren
CMA 388
Idaho 1 - Boundary
CMA 419
Iowa 8 – Monona
CMA 432
Kansas 5 – Brown
CMA 458
Louisiana 5 - Beauregard
CMA 468
Maryland 2 - Kent
CMA 523
Montana 1 - Lincoln
CMA 545
Nevada 3 - Storey
CMA 561
New York 3 - Chautauqua
CMA 620
Pennsylvania 9 - Greene
CMA 625
South Carolina 1 - Oconee
CMA 667
Texas 16 - Burleson
CMA 668
Texas 17 - Newton
CMA 669
Texas 18 - Edwards
CMA 670
Texas 19 - Atascosa
CMA 671
Texas 20 - Wilson
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CMA 673
Utah 1 - Box Elder
CMA 675
Utah 3 – Juab
CMA 677
Utah 5 – Carbon
CMA 678
Utah 6 – Piute
CMA 691
Virginia 11 - Madison
CMA 692
Virginia 12 - Caroline
CMA 695
Washington 3 - Ferry
CMA 703
West Virginia 3 - Monongalia

CMAs Identified by the HHI and Spectrum Screens:

Market

Market Name

CMA 109
Spokane, WA
CMA 112
Corpus Christi, TX
CMA 128
McAllen-Edinburg-Mission, TX*
CMA 142
Modesto, CA
CMA 162
Brownsville-Harlingen, TX
CMA 170
Galveston-Texas City, TX
CMA 171
Reno, NV
CMA 197
Lake Charles, LA
CMA 281
Laredo, TX
CMA 322
Arizona 5 - Gila
CMA 339
California 4 - Madera
CMA 432
Kansas 5 - Brown
CMA 545
Nevada 3 - Storey
CMA 620
Pennsylvania 9 - Greene
CMA 667
Texas 16 - Burleson
CMA 669
Texas 18 - Edwards
CMA 670
Texas 19 - Atascosa
CMA 671
Texas 20 - Wilson
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APPENDIX D

Spectrum Divestitures by AT&T

Amount and Type of

Market

Market Name

Spectrum

CMA 101
Beaumont-Port Arthur, TX
20 megahertz AWS-1
CMA 109
Spokane, WA
10 megahertz AWS-1
CMA 112
Corpus Christi, TX
10 megahertz AWS-1
CMA 128
McAllen-Edinburg-Mission, TX
10 megahertz AWS-1
CMA 162
Brownsville-Harlingen, TX
10 megahertz AWS-1
CMA 171
Reno, NV
10 megahertz AWS-1
CMA 197
Lake Charles, LA
20 megahertz AWS-1
CMA 281
Laredo, TX
10 megahertz AWS-1
10 megahertz AWS-1
(Atchison, Doniphan and
Leavenworth counties)
10 megahertz PCS (Brown
CMA 432
Kansas 5 – Brown
and Jackson counties)
CMA 545
Nevada 3 - Storey
10 megahertz AWS-1
CMA 669
Texas 18 - Edwards
10 megahertz AWS-1
10 megahertz AWS-1
(Aransas, Bee and Refugio
counties)
Texas 20 – Wilson (Aransas, Bee, Refugio, 10 megahertz PCS (Karnes
CMA 671
Karnes and Wilson counties only)
and Wilson counties)
83

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