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FCC Approves AT&T Acquisition of Qualcomm Licenses

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Released: December 22, 2011

Federal Communications Commission

FCC 11-188

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Application of AT&T Inc. and
)
WT Docket No. 11-18
Qualcomm Incorporated
)
)

For Consent To Assign Licenses and
)
Authorizations
)

ORDER

Adopted: December 22, 2011

Released: December 22, 2011

By the Commission: Commissioner Copps dissenting and issuing a statement; Commissioner Clyburn
concurring and issuing a statement.

TABLE OF CONTENTS

Heading
Paragraph #
I.
INTRODUCTION................................................................................................................................. 1
II. BACKGROUND................................................................................................................................... 6
A. Description of Applicants ................................................................................................................ 6
1. AT&T Inc. ................................................................................................................................. 6
2. Qualcomm Inc. ........................................................................................................................ 11
B. Description of Transaction............................................................................................................. 13
C. Transaction Review Process .......................................................................................................... 16
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK ......................................... 23
IV. QUALIFICATIONS OF APPLICANTS............................................................................................. 27
V. COMPETITIVE ANALYSIS.............................................................................................................. 29
A. Overview........................................................................................................................................ 29
B. Market Definition........................................................................................................................... 32
C. Spectrum Concentration................................................................................................................. 43
VI. OTHER ISSUES ................................................................................................................................ 52
A. Roaming......................................................................................................................................... 52
B. Interference Issues.......................................................................................................................... 59
C. Interoperability............................................................................................................................... 69
D. Spectrum Divestitures .................................................................................................................... 73
E. Other Issues Raised by Petitioners................................................................................................. 74
F. Motion To Consolidate………………………………………………………………………...... 80
VII. POTENTIAL PUBLIC INTEREST BENEFITS................................................................................ 81
A. Analytical Framework.................................................................................................................... 83
B. Discussion ...................................................................................................................................... 86
C. Conclusion ..................................................................................................................................... 94
VIII. CONCLUSION .................................................................................................................................. 95
IX. ORDERING CLAUSES..................................................................................................................... 96

Federal Communications Commission

FCC 11-188

I.

INTRODUCTION

1. In this Order, we consider the application of AT&T Inc. and Qualcomm Inc. (the
“Applicants”) for Commission consent to the assignment of all 11 of Qualcomm’s D and E Block licenses
in the Lower 700 MHz band to AT&T, for which AT&T will pay $1.925 billion. If approved, AT&T
would acquire six megahertz of unpaired 700 MHz spectrum nationwide and an additional six megahertz
of unpaired 700 MHz spectrum in five major metropolitan markets (New York, Boston, Philadelphia, Los
Angeles, and San Francisco) with population totaling 70 million. The Applicants assert that this
transaction is in the public interest because it will enable AT&T to repurpose Qualcomm’s underutilized
Lower 700 MHz D and E Block spectrum for the deployment of mobile broadband services by using
supplemental downlink technology to couple it with paired spectrum that AT&T already holds.
2. To determine whether the proposed transaction serves the public interest, we analyze, on
balance, whether it will result in public interest benefits that outweigh any potential harm. Because this
transaction involves only the transfer of spectrum licenses and not the acquisition of wireless business
units and customers, our competitive analysis considers only the effects associated with AT&T’s
spectrum aggregation and use. We therefore carefully examine the effect on the marketplace, if any, of
AT&T acquiring additional 700 MHz spectrum, as well as the implications on other mobile wireless
providers of AT&T operating on that spectrum.
3. Our analysis suggests that AT&T’s proposed acquisition of Qualcomm’s Lower 700 MHz D
and E Block licenses has the potential to cause some competitive and other public interest harms. We
conclude, however, that these potential harms from AT&T’s acquisition of this unpaired spectrum can be
mitigated with certain targeted conditions to prevent or limit any potential anticompetitive behavior.1 In
particular, we conclude that our competitive concerns can be mitigated by ensuring that AT&T’s use of
the newly acquired spectrum does not impede actual and potential competitors’ operation on neighboring
spectrum in the provision of broadband services, and that AT&T cannot use the Qualcomm spectrum in a
way that deprives other providers of the benefits of the Commission’s roaming rules.
4. We also anticipate that the proposed transaction could well facilitate the transition of
underutilized unpaired 700 MHz spectrum towards mobile broadband use, thereby supporting our goal of
expanding mobile broadband deployment throughout the country.2 AT&T expects to deploy the acquired
spectrum as supplemental downlink on its nationwide LTE network using carrier aggregation technology.
This pairing will, according to the Applicants, enable customers to download data more quickly, and will
provide them with faster and better service. The record suggests that customers are likely to experience
these benefits as faster and more consistent download time, a more seamless video or gaming experience,
and better resolution, particularly during periods of peak use.


1 Specifically, as set forth in the discussion below, we condition the assignment of these licenses at issue on
compliance with the following requirements post-transaction: (1) AT&T must operate on the newly acquired
Qualcomm spectrum under the same power limits and antenna height restrictions that apply to the Lower 700 MHz
A and B Block licensees; (2) AT&T may not use these licenses for uplink transmissions; (3) AT&T’s operations on
the newly acquired Qualcomm spectrum in areas in which they do not hold the Lower A, B or C Block license are
conditioned on obligations, discussed in detail below, to avoid interference to the operations of those Lower A, B or
C Block licensees; and (4) AT&T may not configure its network so that the supplemental downlink technology
creates a barrier to roaming under the Commission’s existing roaming rules.
2 See generally In the Matter of Joint Statement on Broadband, GN Docket No. 10-66, Joint Statement on
Broadband, 25 FCC Rcd 3420 (2010), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-
42A1_Rcd.pdf (last visited on Dec. 21, 2011).
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FCC 11-188

5. Accordingly, in light of our targeted conditions to address the potential for competitive harm
and the likely public interest benefits flowing from the use of the spectrum at issue, we approve the
proposed transaction, subject to the conditions set forth below.

II.

BACKGROUND

A.

Description of Applicants

1.

AT&T Inc.

6. AT&T, incorporated in Delaware and headquartered in Dallas, Texas, is a communications
holding company.3 With its subsidiaries, affiliates, and operating companies, AT&T notes that it ranks
among the leading providers of telecommunications services in the United States and around the world.4
AT&T states that, as of December 31, 2010, it was a leading provider of wireless data in the U.S. wireless
industry based on subscribers5 and the largest communications company in the world by revenue.6 The
company reported more than $124 billion in revenues in 2010.7
7. AT&T has four main operating segments: wireless, wireline, advertising solutions, and
other.8 The wireless segment consists of AT&T’s wholly-owned subsidiary, AT&T Mobility, which
provides wireless services to both business and consumer customers.9 This segment represents
approximately 47 percent of 2010 total segment operating revenues.10 AT&T has more than 95.5 million
wireless subscribers.11 It uses High Speed Downlink Packet Access/Universal Mobile
Telecommunications System (“HSDPA/UMTS”) and HSDPA+ network technology, with HSDPA+
providing 4G speed when combined with AT&T’s upgraded backhaul.12
8. AT&T’s wireline subsidiaries provide both retail and wholesale communications services
(both voice and data) domestically and internationally.13 This segment represents approximately 49
percent of 2010 segment operating revenues.14 AT&T’s U.S. wired network includes 23 million retail


3 AT&T Inc., SEC Form 10-K, at 1 (filed March 1, 2011) (“AT&T 10-K”), available at
http://www.sec.gov/Archives/edgar/data/732717/000073271711000014/0000732717-11-000014-index.htm.
4 Id. at 1.
5 Id. at 3.
6 AT&T, About Us, Corporate Profile, Key Facts About AT&T (“AT&T Corporate Profile Key Facts”), available at
http://www.att.com/gen/investor-relations?pid=5711 (last visited Dec. 21, 2011).
7 AT&T Inc., AT&T Inc. 2010 Annual Report, Ex. 13 (filed March 1, 2011), available at
http://www.sec.gov/Archives/edgar/data/732717/000073271711000014/0000732717-11-000014-index.htm.
8 AT&T 10-K at 3.
9 Id.
10 Id.
11 AT&T, About Us, Corporate Profile, U.S. Presence, available at http://www.att.com/gen/investor-
relations?pid=5711 (last visited Dec. 21, 2011).
12 AT&T 10-K at 2. AT&T offers customers Wi-Fi access at more than 190,000 hot spots around the world. AT&T
Corporate Profile Key Facts.
13 AT&T 10-K at 4.
14 Id.
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FCC 11-188

consumer, 19 million retail business, and 2 million wholesale access lines,15 and more than 17.8 million
broadband customers.16
9. The advertising solutions segment includes AT&T’s directory operations, which publish
Yellow and White Pages directories and sell directory advertising and Internet-based advertising and
search.17 This segment represents approximately three percent of 2010 segment operating revenues.18
10. The “other” segment includes operator services, corporate, and other operations.19 It
represents approximately one percent of 2010 segment operating revenues.20
2.

Qualcomm Inc.

11. Qualcomm, incorporated in Delaware and headquartered in San Diego, California, states that
it is a leader in the development and commercialization of next generation mobile broadband
technologies, including Code Division Multiple Access (“CDMA”) and Orthogonal Frequency Division
Multiplexing Access (“OFDMA”) technologies.21 For 2010, it reported $10.99 billion in revenues.22 It
generates revenues by licensing its intellectual property to manufacturers of wireless products.23
Qualcomm reported that 95 percent of the company’s consolidated revenues for 2010 were from
international customers and licenses.24
12. Qualcomm also sells products and services, including: (1) CDMA-based integrated circuits
and Radio Frequency and Power Management chips; (2) software products and services for content
enablement; (3) equipment, software, and services used by companies for wireless connection of their
assets and workforce; (4) software products and services for mobile commerce; (5) services to wireless
operators delivering multimedia content; and (6) software and hardware development services.25


15 AT&T 10-K at 4.
16 AT&T, About Us, Corporate Profile, Networks, available at http://www.att.com/gen/investor-relations?pid=5711
(last visited Dec. 21, 2011).
17 AT&T 10-K at 5.
18 Id.
19 Id.
20 Id.
21 Qualcomm Inc., SEC Form 10-K, at Cover Page, 1 (filed Nov. 3, 2010) (“Qualcomm 10-K”), available at
http://www.sec.gov/Archives/edgar/data/804328/000095012310100207/a57478e10vk.htm.
22 Qualcomm, Investor Relations, Financial Information, Quarterly Results, Fourth Quarter 2010, available at
http://files.shareholder.com/downloads/QCOM/1355436857x0x415196/34ccc0a0-2950-4267-95ff-
2be628942a15/QCOM_Q410_ER_Final.pdf (last visited Dec. 21, 2011).
23 Qualcomm 10-K at 1.
24 Id. at 6.
25 Id. at 2.
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B.

Description of Transaction

13. The Applicants seek Commission consent to the assignment of all 11 of Qualcomm’s D and E
Block licenses in the Lower 700 MHz band to AT&T Mobility Spectrum LLC.26 AT&T will pay $1.925
billion for the acquired licenses.27
14. The Applicants state that this transaction will enable AT&T to repurpose Qualcomm’s
underutilized Lower 700 MHz D and E Block spectrum for the implementation of cutting-edge broadband
services that are most demanded by customers.28 The Applicants state that AT&T plans to use
supplemental downlink technology (also referred to as carrier aggregation technology) to bond this
unpaired spectrum with paired spectrum that AT&T already holds.29 According to the Applicants, AT&T
will be able to use the spectrum it proposes to acquire from Qualcomm to add substantial capacity on its
LTE network once the LTE Advanced standards are released.30 In AT&T’s view, the asymmetric
aggregation of spectrum on the downlink side will help the company to address the asymmetric flow of
data that results from wireless broadband consumers using more downlink than uplink capacity in the
consumption of, for example, video and other data-heavy media content.31 The Applicants assert that
using the supplemental downlink technology will permit AT&T to manage its spectrum more efficiently
and to more effectively serve consumers by providing them with higher download speeds and improved
service.32
15. The licenses at issue include the unpaired Lower 700 MHz D and E Block licenses held by
Qualcomm and cover all of the United States with six or 12 megahertz of Lower 700 MHz spectrum.33
Specifically, Qualcomm holds all six of the Lower 700 MHz D Block licenses (six megahertz).34 In
addition, Qualcomm holds five of the 176 Economic Area (“EA”) licenses35 (also six megahertz) in the
Lower 700 MHz E Block, providing coverage in five of the top 15 metropolitan areas (New York,
Boston, Philadelphia, Los Angeles, and San Francisco), covering more than 70 million people.36


26 Application of Qualcomm Incorporated and AT&T’s Mobility Spectrum LLC for Assignment of Authorization,
File No. 0004566825 (filed Jan. 13, 2011, amended Feb. 9, 2011) (“Application”), Public Interest Statement at 3.
Qualcomm had been using this spectrum for the FLO TV mobile television offering, but according to the
Applicants, this business model proved not to be viable and was shut down. Id. at 2.
27 Id. at 3.
28 Id. at i-ii, 7.
29 Id. at ii, 7.
30 Id. at 14.
31 Id. at 14-15.
32 Id. at 15, 17.
33 Qualcomm, News and Media, AT&T Agrees to Acquire Wireless Spectrum from Qualcomm at 1(“AT&T Press
Release Regarding Acquisition from Qualcomm”), available at
http://www.qualcomm.com/news/releases/2010/12/20/att-agrees-acquire-wireless-spectrum-qualcomm (last visited
Dec. 21, 2011).
34 Id.
35 Application, Public Interest Statement at 2.
36 Qualcomm, News and Media, AT&T Agrees to Acquire Wireless Spectrum from Qualcomm at 1 (“AT&T Press
Release Regarding Acquisition from Qualcomm”), available at
(continued….)
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C.

Transaction Review Process

16. On January 13, 2011, the Applicants filed an application,37 pursuant to section 310(d) of the
Communications Act of 1934, as amended,38 seeking Commission approval to assign six D Block and
five E Block licenses in the Lower 700 MHz band from Qualcomm to AT&T Mobility.39 On February 9,
2011, the Commission released a public notice seeking comment on the proposed transaction.40 The
Comment Public Notice established a pleading cycle for the application, with petitions to deny due March
11, 2011, oppositions due March 21, 2011, and replies due March 28 2011.41
17. In response to the Comment Public Notice, the Commission received five petitions to deny –
filed by Cellular South, Inc. (“Cellular South”), Dish Network LLC (“Dish Network”), Free Press, Public
Knowledge, Media Access Project, Consumer Union, and the Open Technology Initiative of the New
America Foundation (“Free Press”), Rural Cellular Association (“RCA”), and Rural Telecommunications
Group, Inc. (“RTG”)42 – and a letter filed by T-Mobile USA, Inc. (“T-Mobile”).43 King Street Wireless,
L.P. (“King Street Wireless”) and United States Cellular Corp. (“U.S. Cellular”) filed petitions to
condition consent.44 The Applicants filed a Joint Opposition on March 21, 2011.45 The Commission
received replies to the Joint Opposition from Cellular South, Dish Network, Free Press, King Street
Wireless, RCA, RTG, U.S. Cellular, and Vulcan Wireless LLC.46 Several parties have made a number of
written ex parte filings and submitted notifications of ex parte meetings.
(Continued from previous page)


http://www.qualcomm.com/news/releases/2010/12/20/att-agrees-acquire-wireless-spectrum-qualcomm (last visited
Dec. 21, 2011).
37 The application was amended on February 9, 2011.
38 47 U.S.C. § 310(d).
39 FCC File No. 0004566825 (assignment from Qualcomm Incorporated to AT&T Mobility Spectrum LLC).
40 AT&T Mobility Spectrum LLC and Qualcomm Incorporated Seek FCC Consent to the Assignment of Lower 700
MHz Band Licenses, WT Docket No. 11-18, Public Notice, 26 FCC Rcd 1336 (2011) (“Comment Public Notice”).
41 See Comment Public Notice at 1336.
42 Petition to Deny of Cellular South, Inc., filed March 11, 2011 (“Cellular South Petition”); Petition to Deny of
Dish Network LLC, filed March 11, 2011 (“Dish Network Petition”); Petition to Deny of Free Press, Public
Knowledge, Media Access Project, Consumer Union, and the Open Technology Initiative of the New America
Foundation, filed March 11, 2011 (“Free Press Petition”); Petition to Deny of Rural Cellular Association, filed
March 11, 2011 (“RCA Petition”); Petition to Deny of Rural Telecommunications Group, Inc., filed March 11, 2011
(“RTG Petition”).
43 Letter from Thomas J. Sugrue, Senior Vice President, Government Affairs, T-Mobile USA, Inc., to Marlene H.
Dortch, Secretary, Federal Communications Commission (March 11, 2011) (“T-Mobile Letter”).
44 Petition to Condition Consent of King Street Wireless, L.P., filed March 11, 2011 (“King Street Wireless
Petition”); Petition to Condition Consent of United States Cellular Corp., filed March 11, 2011 (“U.S. Cellular
Petition”).
45 Joint Opposition of AT&T Mobility Spectrum LLC and Qualcomm Incorporated to Petitions to Deny or to
Condition Consent and Reply to Comments, filed March 21, 2011 (“Joint Opposition”).
46 Reply to Joint Opposition of Cellular South, filed March 28, 2011 (“Cellular South Reply”); Reply to Joint
Opposition of Dish Network, filed March 28, 2011 (“Dish Network Reply”); Reply to Joint Opposition of Free
Press, filed March 28, 2011 (“Free Press Reply”); Reply to Opposition of King Street Wireless, filed March 28,
2011 (“King Street Wireless Reply”); Reply to Joint Opposition of RCA, filed March 28, 2011 (“RCA Reply”);
Reply to Joint Opposition of RTG, filed March 28, 2011; Erratum to Reply to Joint Opposition of RTG, filed March
(continued….)
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FCC 11-188

18. In addition to these pleadings, Cincinnati Bell Wireless, LLC (“Cincinnati Bell”), MetroPCS
Communications, Inc. (“MetroPCS”), NTELOS, RCA, RTG, and Sprint Nextel Corporation (“Sprint
Nextel”) filed a joint motion to consolidate47 our consideration of this application with the subsequently
filed AT&T/T-Mobile applications,48 and another motion expanding the consolidation request to
additional license assignment and transfer applications filed by AT&T.49 The Wireless
Telecommunications Bureau (“Bureau”) declined to formally consolidate this transaction with the
AT&T/T-Mobile transaction; however, the Bureau determined that it would consider the two transactions
in a coordinated manner.50
(Continued from previous page)


28, 2011 (“RTG Reply”); Reply of U.S. Cellular, filed March 28, 2011 (“U.S. Cellular Reply”); Reply Comments of
Vulcan Wireless, filed March 28, 2011 (“Vulcan Wireless Reply”).
47 Joint Motion to Consolidate of Cincinnati Bell Wireless, LLC, MetroPCS Communications, Inc., NTELOS, RCA,
RTG, and Sprint Nextel Corporation, filed April 27, 2011 (“Joint Motion to Consolidate”). The Applicants filed an
opposition. Joint Opposition of AT&T Mobility Spectrum LLC and Qualcomm Incorporated to Joint Motion to
Consolidate, filed May 4, 2011 (“Joint Consolidation Opposition”). Deutsche Telekom AG (“Deutsche Telekom”)
also filed an opposition. Opposition of Deutsche Telekom to Requests to Consolidate Proceedings, filed May 4,
2011 (“Deutsche Telekom Opposition”). Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel filed
a joint reply. Joint Reply to Oppositions of Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel,
filed May 16, 2011 (“Joint Consolidation Reply”).
48 AT&T and T-Mobile filed the applications for their proposed transaction on April 21, 2011. See AT&T Inc. and
Deutsche Telekom AG Seek FCC Consent to the Transfer of Control of the Licenses and Authorizations Held by T-
Mobile USA, Inc. and Its Subsidiaries to AT&T Inc., WT Docket No. 11-65, Public Notice, DA 11-799 (rel. Apr.
28, 2011).
49 Joint Motion to Consolidate of Cincinnati Bell Wireless, LLC, MetroPCS Communications, Inc., NTELOS, RCA,
RTG, and Sprint Nextel Corporation, filed June 9, 2011 (“Second Joint Motion To Consolidate”). The Applicants
filed an opposition. Joint Opposition of AT&T Mobility Spectrum LLC and Qualcomm Incorporated to Second
Joint Motion to Consolidate, filed June 22, 2011 (“Second Joint Consolidation Opposition”). Five other parties filed
an opposition. Opposition of Deutsche Telekom to Joint Motion to Consolidate Proceedings, filed June 22, 2011
(“Second Deutsche Telekom Opposition”); Opposition to Joint Motion to Consolidate by Redwood Wireless Corp.,
filed June 20, 2011 (“RWC Opposition”); Opposition to Motion to Consolidate by D&E Investments, Inc.,
Windstream Iowa Communications, Inc., and Windstream Lakedale, Inc., filed June 22, 2011 (“D&E Investment
Opposition”); Opposition to Joint Motion to Consolidate by Whidbey Telephone Company, filed June 22, 2011
(“WTC Opposition”); Opposition to Joint Motion to Consolidate by 700 MHz, LLC, filed June 22, 2011 (“700 MHz
Opposition”). Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel filed a joint reply. Joint Reply
to Oppositions of Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel, filed July 5, 2011 (“Second
Joint Consolidation Reply”).
50 Letter from Rick Kaplan, Chief, Wireless Telecommunications Bureau, Federal Communications Commission, to
Michael P. Goggin, AT&T Mobility Spectrum LLC, and Dean Brenner, QUALCOMM Incorporated (Aug. 8, 2011)
(“WTB Transactions Letter”). In light of the Bureau’s Order granting AT&T’s and T-Mobile’s request to withdraw
their applications without prejudice, see generally 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, Order, DA 11-1955
(rel. Nov. 29, 2011) (“AT&T/T-Mobile Dismissal Order”), and AT&T’s statements shortly thereafter that it expected
to file new applications in order to acquire control of T-Mobile, RTG filed a request that the Commission hold the
above-referenced application pending until final resolution of any proposed merger, acquisition, or similar
transaction between AT&T and T-Mobile. RTG Motion To Hold in Abeyance, filed Nov. 30, 2011 (“RTG
Abeyance Motion”). Qualcomm and AT&T filed a joint opposition to the RTG Abeyance Motion. Qualcomm and
AT&T Joint Opposition to Motion To Hold in Abeyance, filed Dec. 2, 2011 (“Qualcomm/AT&T Abeyance
Opposition”). RTG replied, reiterating its request. RTG Reply to Joint Opposition to Motion To Hold in Abeyance,
filed Dec. 15, 2011. On December 19, 2011, AT&T announced that “it has agreed with Deutsche Telekom AG to
(continued….)
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19. Confidential Materials. On May 20, 2011, the Bureau issued a protective order to ensure that
any confidential or proprietary documents submitted to the Commission in connection with this
proceeding would be adequately protected from public disclosure and announcing the process by which
interested parties could gain access to confidential information filed in the record.51 On June 10, 2011,
the Bureau released a second protective order, as requested by the Applicants,52 to provide additional
protection to those documents and to make clear that information contained in AT&T’s and Qualcomm’s
responses to the Bureau’s information request are highly sensitive and confidential.53 The Bureau revised
the Second Protective Order on June 22, 2011.54 The Bureau received acknowledgements pursuant to the
Protective Order from fifteen individuals.55
20. On May 20, 2011, 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.56 The Bureau received
(Continued from previous page)


end its bid to acquire T-Mobile USA.” See AT&T Ends Bid To Add Network Capacity Through T-Mobile USA
Purchase, December 19, 2011, available at http://www.att.com/gen/press-
room?pid=22146&cdvn=news&newsarticleid=33560&mapcode=corporate|wireless-networks-general (last visited
Dec. 21, 2011). RTG subsequently filed a motion for leave to withdraw its Abeyance Motion, concluding that there
is no longer any need to consider the AT&T/T-Mobile transaction in tandem with the subject transaction. RTG
Motion fro Leave to Withdraw Motion to Hold in Abeyance, filed Dec. 20, 2011. We will grant this latest motion.
51 Applications of AT&T Mobility Spectrum LLC and Qualcomm Incorporated For Consent to the Assignment of
Lower 700 MHz Band Licenses, WT Docket No. 11-18, Protective Order, 26 FCC Rcd 7506 (WTB 2011)
(“Protective Order”).
52 Letter from Paul Margie, Wiltshire & Grannis LLP, Counsel to Qualcomm, and Peter J. Schildkraut, Arnold &
Porter LLP, Counsel to AT&T, to Marlene H. Dortch, Secretary, Federal Communications Commission (June 7,
2011).
53 Applications of AT&T Mobility Spectrum LLC and Qualcomm Incorporated For Consent to the Assignment of
Lower 700 MHz Band Licenses, WT Docket No. 11-18, Second Protective Order, 26 FCC Rcd 8441 (WTB 2011)
(“Second Protective Order”).
54 Applications of AT&T Mobility Spectrum LLC and Qualcomm Incorporated For Consent to the Assignment of
Lower 700 MHz Band Licenses, WT Docket No. 11-18, Second Protective Order (Revised), 26 FCC Rcd 8791
(WTB 2011) (“Second Protective Order (Revised)”). See also Applications of AT&T Mobility Spectrum LLC and
Qualcomm Incorporated For Consent to the Assignment of Lower 700 MHz Band Licenses, WT Docket No. 11-18,
Order, 26 FCC Rcd 8790 (WTB 2011).
55 Letter from Aparna Sridhar, Policy Counsel to Free Press, to Marlene H. Dortch, Secretary, Federal
Communications Commission (May 26, 2011) (acknowledgements of confidentiality for Chris Riley, Aparna
Sridhar, Corie Wright, Joel Kelsey, Derek Turner); Letter from Rachel W. Petty, Counsel to Qualcomm
Incorporated, to Marlene H. Dortch, Secretary, Federal Communications Commission (June 8, 2011)
(acknowledgements of confidentiality for Paul Margie, Patrick O’Donnell, Walter Anderson, Jacinda Lanum,
Rachel Petty, Renee Wentzel, Madeleine Lottenbach, Christine Lutz, Marielle Moore, Jason St. John).
56 Proposed Assignment of Lower 700 MHz Band Licenses from Qualcomm Incorporated to AT&T Mobility
Spectrum LLC – Numbering Resource Utilization and Forecast (NRUF) Reports and Local Number Portability
Reports Placed Into the Record, Subject to Protective Order, WT Docket No. 11-18, CC Docket No. 99-200, Public
Notice
, 26 FCC Rcd 7518 (WTB 2011); Applications of AT&T Mobility Spectrum LLC and Qualcomm
Incorporated For Consent to the Assignment of Lower 700 MHz Band Licenses, WT Docket No. 11-18, Protective
Order
, 26 FCC Rcd 7512 (WTB 2011) (“NRUF Protective Order”).
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acknowledgements pursuant to the NRUF Protective Order from forty-four individuals seeking to review
the NRUF and LNP data that is in the record.57
21. Bureau Requests for Documents and Information. On May 20, 2011, pursuant to section
308(b) of the Communications Act,58 the Bureau requested a number of documents and additional
information from the Applicants by June 3, 2011.59 Among other things, the Bureau asked Applicants to
provide more details and information about AT&T’s Long Term Evolution (“LTE”) deployment plans,
supplemental downlink technology, its network spectrum and capacity constraints, trunking and other
efficiencies, interference mitigation plans, interoperability, service offerings and coverage and capacity,
and use of Lower 700 MHz D and E Blocks.60 The Applicants provided documents and information
beginning June 3, 2011 and continuing to August 1, 2011,61 some of which were provided subject to the
provisions of the Protective Order and the Second Protective Order.


57 Letter from Aparna Sridhar, Policy Counsel to Free Press, to Marlene H. Dortch, Secretary, Federal
Communications Commission (May 26, 2011) (acknowledgements of confidentiality for Chris Riley, Aparna
Sridhar, Corie Wright, Joel Kelsey, Derek Turner); Letter from Peter J. Schildkraut, Arnold & Porter LLP, Counsel
to AT&T, Inc., to Marlene H. Dortch, Secretary, Federal Communications Commission (June 1, 2011)
(acknowledgements of confidentiality for Scott Feira, Patrick Grant, Richard L. Rosen, Michael Bernstein, Maureen
R. Jeffreys, Wilson Mudge, Donna E. Patterson, Stephanie M. Phillipps, Jason C. Ewart, Anita Kalra, John Rackson,
Kelly C. Smith, Dzmitry Asinski, Brian Sardon, Erica Benton, Dennis Carlton, Jackie C. Cravens, Otto Hansen,
Jonathan M. Orszag, Kevin C. Green, Yair Eliat, Allan Shampine, Hal S. Sider, Elizabeth Stare, Thomas A.
Stemwedel, Robert D. Willig, Jay Ezrielev, Hilla Shimshoni, Alice Kaminski); Letter from Rachel W. Petty,
Counsel to Qualcomm Incorporated, to Marlene H. Dortch, Secretary, Federal Communications Commission (June
8, 2011) (acknowledgements of confidentiality for Paul Margie, Patrick O’Donnell, Walter Anderson, Jacinda
Lanum, Rachel Petty, Renee Wentzel, Madeleine Lottenbach, Christine Lutz, Marielle Moore, Jason St. John).
58 47 U.S.C. § 308(b).
59 Letter from Ruth Milkman, Chief, Wireless Telecommunications Bureau, Federal Communications Commission,
to Michael P. Goggin, AT&T Mobility Spectrum LLC (May 20, 2011) (“AT&T Information Request”); Letter from
Ruth Milkman, Chief, Wireless Telecommunications Bureau, Federal Communications Commission, to Dean
Brenner, Qualcomm Incorporated (May 20, 2011) (“Qualcomm Information Request”). The Applicants requested
an extension of the time to respond to their Information Requests until June 10, 2011. See Letter from William E.
Cook., Jr. Arnold & Porter LLP, to Marlene H. Dortch, Secretary, Federal Communications Commission (June 2,
2011); Letter from Paul Margie, Wiltshire & Grannis LLP, to Marlene H. Dortch, Secretary, Federal
Communications Commission (June 2, 2011).
60 See AT&T Information Request at AT&T Attachment; Qualcomm Information Request at Qualcomm
Attachment.
61 Letter from William E. Cook, Jr., Arnold & Porter LLP, Counsel to AT&T Inc., to Marlene H. Dortch, Secretary,
Federal Communications Commission (June 3, 2011) (“AT&T First Partial Response of June 3, 2011”); Letter from
William E. Cook, Jr., Arnold & Porter LLP, Counsel to AT&T Inc., to Marlene H. Dortch, Secretary, Federal
Communications Commission (June 10, 2011) (“AT&T Complete Response of June 10, 2011”); Letter from
William E. Cook, Jr., Arnold & Porter LLP, Counsel to AT&T Inc., to Marlene H. Dortch, Secretary, Federal
Communications Commission (June 13, 2011) (“AT&T Response of June 13, 2011”); Letter from William E. Cook,
Jr., Arnold & Porter LLP, Counsel to AT&T Inc., to Marlene H. Dortch, Secretary, Federal Communications
Commission (June 23, 2011) (“AT&T Response of June 23, 2011”); Letter from Paul Margie, Wiltshire & Grannis
LLP, Counsel to Qualcomm Incorporated, to Marlene H. Dortch, Secretary, Federal Communications Commission
(June 10, 2011) (“Qualcomm First Partial Response of June 10, 2011”); Letter from Paul Margie, Wiltshire &
Grannis LLP, Counsel to Qualcomm Incorporated, to Marlene H. Dortch, Secretary, Federal Communications
Commission (July 1, 2011) (“Qualcomm Second Partial Response of July 1, 2011”); Letter from Paul Margie,
(continued….)
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22. By letter dated August 8, 2011, the Bureau advised the Applicants that it was stopping the
Commission’s informal 180-day timeline for consideration of the Application, given the relationship
between the proposed transaction and AT&T’s proposed acquisition of T-Mobile USA.62 The letter also
stated that the Commission had concluded that it is in the public interest to consider the two transactions
in a coordinated manner, but without formally consolidating them.63 By letter dated December 9, 2011,
the Bureau advised the Applicants that it was restarting the Commission's informal 180-day timeline for
consideration of the instant Application, as of November 29, 2011, in light of the Bureau's Order granting
AT&T’s and T-Mobile’s request to withdraw their applications. 64

III.

STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK

23. Pursuant to section 310(d) of the Communications Act, we must determine whether the
Applicants have demonstrated that the proposed assignment and transfer of control of licenses and
authorizations will serve the public interest, convenience, and necessity.65 In making this assessment, we
first assess whether the proposed transaction complies with the specific provisions of the
Communications Act,66 other applicable statutes, and the Commission’s rules.67 If the transaction does
not violate a statute or rule, we next consider whether it could result in public interest harms by
substantially frustrating or impairing the objectives or implementation of the Communications Act or
(Continued from previous page)


Wiltshire & Grannis LLP, Counsel to Qualcomm Incorporated, to Marlene H. Dortch, Secretary, Federal
Communications Commission (August 1, 2011) (“Qualcomm Third Partial Response of August 1, 2011”).
62 WTB Transactions Letter.
63 WTB Transactions Letter at 1 n. 5.
64 Letter from Rick Kaplan, Chief, Wireless Telecommunications Bureau, Federal Communications Commission, to
Michael P. Goggin, AT&T Mobility Spectrum LLC, and Dean Brenner, QUALCOMM Incorporated (Dec. 9, 2011).
See also AT&T/T-Mobile Dismissal Order.
65 47 U.S.C. § 310(d).
66 Section 310(d), 47 U.S.C. § 310(d), requires that we consider the applications as if the proposed transferee were
applying for the licenses directly under section 308 of the Act, 47 U.S.C. § 308. See, e.g., AT&T Inc. and Cellco
Partnership d/b/a Verizon Wireless Seek FCC Consent To Assign or Transfer Control of Licenses and
Authorizations and Modify a Spectrum Leasing Arrangement, WT Docket No. 09-104, Memorandum Opinion and
Order
, 25 FCC Rcd 8704, 8716 ¶ 22 (2010) (“AT&T-Verizon Wireless Order”); 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, 13927 ¶ 27
(2009) (“AT&T-Centennial Order”); 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, 17460 ¶ 26 (2008) (“Verizon Wireless-ALLTEL Order”); 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, 17578 ¶ 19 (2008) (“Sprint Nextel-
Clearwire Order
”); Applications of AT&T Wireless Services, Inc. and Cingular Wireless Corporation, WT Docket
No. 04-70, Memorandum Opinion and Order, 19 FCC Rcd 21522, 21542 ¶ 40 (2004) (“Cingular-AT&T Wireless
Order
”).
67 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8716 ¶ 22; AT&T-Centennial Order, 24 FCC Rcd at
13927 ¶ 27; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17460 ¶ 26; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17578-79 ¶ 19; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21542-43 ¶ 40.
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related statutes.68 We then employ a balancing test weighing any potential public interest harms of the
proposed transaction against any potential public interest benefits.69 The Applicants bear the burden of
proving, by a preponderance of the evidence, that the proposed transaction, on balance, will serve the
public interest.70
24. Our public interest evaluation also 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.71
Our public interest analysis also often entails assessing whether the proposed transaction will affect the
quality of communications services or will result in the provision of new or additional services to
consumers.72 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.73
25. Our competitive analysis, which forms an important part of the public interest evaluation, is
informed by, but not limited to, traditional antitrust principles.74 The Department of Justice’s (DOJ)
review is limited solely to an examination of the competitive effects of the acquisition, without reference
to various public interest considerations.75 In addition, DOJ’s competitive review of communications
mergers is pursuant to section 7 of the Clayton Act: if it wishes to block a merger, it must demonstrate to
a court that the merger may substantially lessen competition or tend to create a monopoly.76 By contrast,
the Commission’s review of the competitive effects of a transaction under the public interest standard is


68 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8716 ¶ 22; AT&T-Centennial Order, 24 FCC Rcd at
13927 ¶ 27; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17460 ¶ 26; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17578-79 ¶ 19.
69 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8716 ¶ 22; AT&T-Centennial Order, 24 FCC Rcd at
13927 ¶ 27; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17460 ¶ 26; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17579 ¶ 19; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21543 ¶ 40.
70 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8716 ¶ 22; AT&T-Centennial Order, 24 FCC Rcd at
13927 ¶ 27; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 26; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17579 ¶ 19; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21543 ¶ 40.
71 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 23; AT&T-Centennial Order, 24 FCC Rcd at
13928 ¶ 28; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 27; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17580 ¶ 20; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21544 ¶ 41.
72 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 23; AT&T-Centennial Order, 24 FCC Rcd at
13928 ¶ 28; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 27; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17580 ¶ 20; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21544 ¶ 41.
73 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 23; AT&T-Centennial Order, 24 FCC Rcd at
13928 ¶ 28; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 27; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17580 ¶ 20; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21544 ¶ 41.
74 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 24; AT&T-Centennial Order, 24 FCC Rcd at
13928 ¶ 29; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 28; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17580 ¶ 21; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21544 ¶ 42.
75 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 24; AT&T-Centennial Order, 24 FCC Rcd at
13928 ¶ 29; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 28; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17581 ¶ 21.
76 15 U.S.C. § 18.
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broader: for example, it considers whether a transaction will enhance, rather than merely preserve,
existing competition, and takes a more extensive view of potential and future competition and the impact
on the relevant market, including longer-term impacts.77 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 for hearing.78
26. Our analysis recognizes that a proposed transaction may lead to both beneficial and harmful
consequences.79 Section 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 Communications Act.80 In using this broad authority, the Commission has generally imposed
conditions to remedy specific harms likely to arise from the transaction or to help ensure the realization of
potential benefits promised for the transaction.81

IV.

QUALIFICATIONS OF APPLICANTS

27. As noted previously, when evaluating applications for consent to assign or transfer control of
licenses and authorizations, section 310(d) of the Communications Act requires the Commission to
determine whether the proposed transaction will serve “the public interest, convenience and necessity.”82
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.”83
Therefore, as a threshold matter, the Commission must determine whether the applicants to the proposed


77 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 24; AT&T-Centennial Order, 24 FCC Rcd at
13929 ¶ 29; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 28; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17581 ¶ 21; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21545 ¶ 42.
78 47 U.S.C. § 309(e); see also Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio
Holdings Inc., Transferor, to Sirius Satellite Radio Inc., Transferee, Memorandum Opinion and Order and Report
and Order
, 23 FCC Rcd 12348, 12364 ¶ 30 (2008) (“Sirius-XM Order”); News Corp. and DIRECTV Group, Inc.
and Liberty Media Corp. for Authority to Transfer Control, Memorandum Opinion and Order, 23 FCC Rcd 3265,
3277 ¶ 22 (2008) (“Liberty Media-DIRECTV Order”); General Motors Corporation and Hughes Electronics
Corporation, Transferors, and The News Corporation Limited, Transferee, Memorandum Opinion and Order, 19
FCC Rcd 473, 483 n.49 (2004) (“News Corp.-Hughes Order”); Application of EchoStar Communications
Corporation, General Motors Corporation, and Hughes Electronics Corporation (Transferors) and EchoStar
Communications Corporation (Transferee), Hearing Designation Order, 17 FCC Rcd 20559, 20574 ¶ 25 (2002)
(“EchoStar-DIRECTV HDO”).
79 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 25; AT&T-Centennial Order, 24 FCC Rcd at
13929 ¶ 30; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17462 ¶ 29; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17581 ¶ 22; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21545 ¶ 42.
80 47 U.S.C. § 303(r); see also, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8718 ¶ 25; AT&T-Centennial
Order
, 24 FCC Rcd at 13939 ¶ 30; Verizon Wireless/Alltel Order, 23 FCC Rcd at 17463 ¶ 29; Sprint Nextel-
Clearwire Order
, 23 FCC Rcd at 17581 ¶ 22; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21545 ¶ 43.
81 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8718 ¶ 25; AT&T-Centennial Order, 24 FCC Rcd at
13929 ¶ 30; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17463 ¶ 29; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17582 ¶ 22; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21546 ¶ 43. We consider only those harms and
benefits that are related to the Commission’s responsibilities under the Communications Act and related statutes.
82 47 U.S.C. §§ 214(a), 310(d).
83 Id. §§ 308, 310(d). See also, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8718 ¶ 26; AT&T-Centennial
Order,
24 FCC Rcd at 13930 ¶ 31; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17464 ¶ 31; Sprint Nextel-
Clearwire Order
, 23 FCC Rcd at 17582 ¶ 23; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21546 ¶ 44.
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transaction meet the requisite qualifications requirements to hold and transfer licenses under section
310(d) of the Communications Act and the Commission’s rules.84
28. Conversely, section 310(d) obligates the Commission to consider whether the proposed
transferee is qualified to hold Commission licenses.85 No issues have been raised with respect to the basic
qualifications of the proposed assignee, AT&T, which has previously and repeatedly been found
qualified, through its subsidiaries, to hold Commission licenses. We therefore find that there is no reason
to re-evaluate the basic qualifications of AT&T.

V.

COMPETITIVE ANALYSIS

A.

Overview

29. The Applicants seek Commission consent to the assignment from Qualcomm to AT&T of six
megahertz of unpaired 700 MHz spectrum nationwide and an additional six megahertz of unpaired 700
MHz spectrum in five major metropolitan markets covering more than 70 million people. This
transaction does not result in the acquisition of wireless business units and customers or change the
number of firms in any market, so our competitive analysis considers only the competitive effects
associated with the increases in spectrum that would be held by AT&T post-transaction.86 As discussed
below, our analysis includes a review of the potential competitive effects, on a local and national level, of
post-transaction total and below 1 GHz spectrum holdings.
30. The Communications Act requires the Commission to examine closely the impact of
spectrum aggregation on competition, innovation, and the efficient use of spectrum. Spectrum is the
lifeblood of the wireless industry; to compete effectively and innovate, a wireless provider must have
access to adequate spectrum.87 The Commission has a unique responsibility to ensure that spectrum is
allocated in a manner that promotes actual and potential competition and that incentives are maintained
for innovation and efficiency in the mobile services marketplace.88 Our public interest analysis must


84 See 47 U.S.C. §§ 214(a), 310(d); 47 C.F.R. § 1.948; see also, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at
8718 ¶ 26; AT&T-Centennial Order, 24 FCC Rcd at 13930 ¶ 31; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17464 ¶ 31; Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17582 ¶ 23; Cingular-AT&T Wireless Order, 19 FCC
Rcd at 21546 ¶ 44.
85 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720 ¶ 29; AT&T-Centennial Order, 24 FCC Rcd at
13931 ¶ 33; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17466 ¶ 33; Cingular-AT&T Wireless Order, 19 FCC
Rcd at 21546 ¶ 44.
86 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720 ¶ 30; AT&T-Centennial Order, 24 FCC Rcd at
13931 ¶ 34; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17468 ¶ 40; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17583 ¶ 24; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21556 ¶ 68.
87 See e.g., Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17481-82 ¶ 75; Cingular-AT&T Wireless Order, 19
FCC Rcd at 21569 ¶ 109. See also 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. 10-133, Fifteenth Report, 26 FCC Rcd 9664, 9820 ¶ 266 (2011)
(“Fifteenth Annual Mobile Wireless Competition Report”).
88 See, e.g., 2000 Regulatory Review of Spectrum Aggregation Limits for Commercial Mobile Radio Services,
Report and Order, FCC 01-328, 16 FCC Rcd 22668, 22695 ¶ 54 (“Biennial Review of CMRS Spectrum Aggregation
Limits
”). As part of the Commission’s public interest review, we have unique statutory obligations, distinct from
DOJ, to consider the potential anticompetitive effects of proposed acquisitions of spectrum that is used in the
provision of mobile services. See Biennial Review of CMRS Spectrum Aggregation Limits, 16 FCC Rcd at 22699-
22700 ¶¶ 62-63. Our goals relating to spectrum concentration include discouraging anticompetitive conduct and
(continued….)
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consider not only the near-term, but also the long-term, impacts of the proposed transaction on the
implementation of Congress’s pro-competitive, deregulatory policies aimed at developing and
encouraging competitive markets.89
31. The Commission examines the effects of spectrum aggregation on the marketplace on a case-
by-case basis.90 To do so, the Commission has used an initial screen to identify markets where the
spectrum amounts held by a transferee post-transaction provide reason for further competitive analysis of
spectrum concentration.91 In addition, the Commission recently has begun to look more closely at
spectrum holdings below 1 GHz, which enable firms to significantly reduce the costs of building and
maintaining a network compared to higher-band spectrum, as well as spectrum that is specifically suited
for the provision of mobile broadband services.92 As discussed in greater detail below, our spectrum
concentration review suggests that AT&T’s proposed acquisition of Qualcomm’s Lower 700 MHz D and
E Block licenses has some potential to cause competitive harm.

B.

Market Definition

32. We establish at the outset the appropriate market definitions for our evaluation of the
proposed transaction. This includes establishing the product and geographic market definitions that we
will apply. Market definition focuses on the customer and its ability to and willingness to switch to a
different product in response to an increase in price or reduction in quality.93 The relevant product market
includes “all products ‘reasonably interchangeable by consumers for the same purposes.’”94 In this order,
as in the Commission’s most recent transactions, we will evaluate the proposed transaction using a
(Continued from previous page)


ensuring that incentives are maintained for innovation and efficiency in the mobile services marketplace. See, e.g.,
Biennial Review of CMRS Spectrum Aggregation Limits, 16 FCC Rcd at 22695 ¶ 54.
89 EchoStar-DIRECTV HDO, 17 FCC Rcd at 20586 ¶ 56 (discussing the Commission’s general spectrum
management policies).
90 AT&T-Centennial Order, 24 FCC Rcd at 13938 ¶ 50; Cingular-AT&T Wireless Order,19 FCC Rcd at 21525 ¶4;
Facilitating the Provision of Spectrum-Based Services to Rural Areas and Promoting Opportunities for Rural
Telephone Companies to Provide Spectrum-Based Services, WT Docket No. 02-381, Report and Order and Further
Notice of Proposed Rulemaking
, 19 FCC Rcd 19078, 19113 ¶ 63 (2004) (“Rural Report and Order”).
91 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8720-8721 ¶ 32; AT&T-Centennial Order, 24 FCC Rcd
at 13935 ¶ 43; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17468-69 ¶ 41 n.193; Sprint Nextel-Clearwire
Order
, 23 FCC Rcd at 17583-17584 ¶ 26; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21552 ¶ 58. Because the
instant transaction does not result in the acquisition of wireless business units and customers or change the number
of firms in any market, we do not apply an initial screen based on the size of the post-transaction Herfindahl-
Hirschman Index (“HHI”) of market concentration and the change in the HHI.
92 See Fifteenth Annual Mobile Wireless Competition Report, 26 FCC Rcd at 9832-37 ¶¶ 289-297, 9840-41 ¶¶ 305-
307; Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and
Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, Fourteenth Report, 25
FCC Rcd 11407, 11571-72 ¶¶ 269-270, 11577 ¶ 283 (2010) (“Fourteenth Annual Mobile Wireless Competition
Report”
).
93 See, e.g., Horizontal Merger Guidelines, issued by the U.S. Department of Justice and the Federal Trade
Commission, August 19, 2010, at § 4 (“2010 DOJ/FTC Horizontal Merger Guidelines”) available at
http://www.justice.gov/atr/public/guidelines/hmg-2010.pdf (last visited Dec. 21, 2011).
94 United States v. E.I. du Pont de Nemours & Co. 351 U.S. 377, 395 (1956) (The relevant product market is
composed of products that have reasonable interchangeability); see also United States v. Microsoft, 253 F.3d 34, 52
(D.C. Cir. 2001), cert. denied, 122 S. Ct. 350 (2001).
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combined “mobile telephony/broadband services” product market.95 Because AT&T is acquiring
Qualcomm’s unpaired spectrum to expand its capacity for the mobile broadband services, and because the
provision of mobile broadband service is becoming increasingly critical to competition in the mobile
marketplace, our analysis of spectrum concentration focuses in part on spectrum suitable and available in
the near term to be used for provisioning of mobile broadband services. Similarly, consistent with the
Commission’s past analysis, we will primarily use Cellular Market Areas (“CMAs”)96 as the local
geographic markets in which we analyze the potential competitive harms arising from the spectrum
concentration as a result of this transaction.97 In addition, as discussed below, we find that there are
certain national characteristics to this transaction that warrant a competitive analysis on the national level.
Accordingly, we will evaluate, as appropriate, competitive effects of this spectrum acquisition both
locally and nationally.
33. Product Market. We evaluate this proposed transaction using the product market most
recently used by the Commission – a combined “mobile telephony/broadband services” product market,
which is comprised of mobile voice and data services, including mobile voice and data services provided
over advanced broadband wireless networks (mobile broadband services).98 Although the Commission
has determined that there are separate relevant product markets for interconnected mobile voice services
and mobile data services, and also for residential services and enterprise services,99 it has found it
reasonable to analyze all of these product markets under the combined market for mobile
telephony/broadband services.100 We find that AT&T provides services in the product market for mobile
telephony/broadband services, and note that no party in the proceeding has suggested that we use a
different product market definition. We also note that AT&T states that its proposed use of Qualcomm’s
unpaired spectrum as supplemental downlink is particularly relevant to expand its capacity for the mobile
broadband services part of this market.101 Our analysis of spectrum concentration focuses specifically on
spectrum suitable and available in the near term to be used for provisioning mobile voice or broadband
services.


95 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8721 ¶ 35; AT&T-Centennial Order, 24 FCC Rcd at 13932 ¶
37; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17469-70 ¶ 45; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17583-84 ¶ 26.
96 CMAs are the areas in which the Commission initially granted licenses for cellular service. See 47 C.F.R. §
22.909. In past orders, as a cross-check to ensure that we do not miss any markets where competitive harm may
occur, the Commission also has calculated HHIs for Component Economic Areas (“CEAs”). CEAs are designed to
represent consumers’ patterns of normal travel for personal and employment reasons and may therefore capture
areas within which groups of consumers would be expected to shop for wireless service.
97 See, e.g., AT&T-Centennial Order, 24 FCC Rcd at 13934 ¶ 41; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17472 ¶ 52; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21558 ¶ 74.
98 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8721 ¶ 35; AT&T-Centennial Order, 24 FCC Rcd at 13932 ¶
37; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17469-70 ¶ 45; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17583-84 ¶ 26.
99 See, e.g., Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17,470 ¶ 45 n.198; Sprint Nextel-Clearwire Order, 23
FCC Rcd at 17,586 ¶ 38 n.106.
100 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8721 ¶ 35; AT&T-Centennial Order, 24 FCC Rcd at
13,932 ¶ 37; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17,469-70 ¶ 45; Sprint Nextel-Clearwire Order, 23
FCC Rcd at 17,583-84 ¶ 26.
101 Application, Public Interest Statement at 7-8; Joint Opposition at 2-5. See also AT&T Complete Response of
June 10, 2011 at 9-10, 17-19.
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34. Geographic Markets. In its wireless transaction orders, the Commission has previously
applied the “hypothetical monopolist test” and found that the relevant geographic markets are local, larger
than counties, may encompass multiple counties, and, depending on the consumer’s location, may even
include parts of more than one state.102 The Commission in these orders has primarily used CMAs103 as
the local geographic markets in which to analyze the potential competitive harms arising from the
spectrum concentration as a result of the transaction.104 Consistent with these other transactions, we will
primarily use CMAs105 when applying the initial spectrum screen to identify those markets in which
spectrum concentration clearly raises potential concerns and therefore require further case-by case
review.106 Nothing in our record causes us to doubt that, in the event of a price increase limited to one
CMA, or, more likely, in the event of a reduction in service quality in one CMA that has the effect of
raising the quality-adjusted price in that locality,107 too few buyers would switch to purchasing mobile
wireless services in another area to make that quality-adjusted price increase unprofitable.
35. We find that it is appropriate also to analyze both the local markets in which consumers
purchase mobile wireless services and the potential national competitive impacts of this transaction.
Defining local geographic markets for retail wireless services does not preclude us from recognizing that
two key competitive variables – prices and service plan offerings – do not vary for most providers across
most geographic markets. The four nationwide providers of retail wireless services (AT&T, Verizon
Wireless, Sprint, and T-Mobile) as well as some other providers set the same rates for a given plan
everywhere and do not alter the plans they offer depending on the location.108 The vast amount of
provider advertising is national,109 and nationwide retail stores such as Wal-Mart, Best Buy, and
RadioShack, which sell plans at the same rates in every store, play an important role marketing retail


102 See AT&T-Verizon Wireless Order, 25 FCC Rcd 8722 at ¶ 36; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17470-71 ¶ 49; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21562-63 ¶¶ 89-90.
103 As noted above, in past orders, as a cross-check to ensure that the Commission does not miss any markets where
competitive harm may occur, the Commission also has calculated HHIs for Component Economic Areas (“CEAs”).
104 See, e.g., AT&T-Centennial Order, 24 FCC Rcd at 13934 ¶ 41; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17472 ¶ 52.
105 The Commission has found that for Puerto Rico and the U.S. Virgin Islands each are a separate relevant
geographic market. See AT&T-Centennial Order, 24 FCC Rcd at 13934 ¶ 42.
106 AT&T-Verizon Wireless Order, 25 FCC Rcd at 8724-25 ¶ 42; AT&T-Centennial Order, 24 FCC Rcd at 13936 ¶
46; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17481-82 ¶ 75; Sprint Nextel-Clearwire Order, 23 FCC Rcd
17601 ¶ 76.
107 Service quality might fall, for example, if the firms do not expand service in response to increases in demand,
leading to more problems associated with network congestion (such as slow data transmission speeds or more
frequent dropped calls).
108 See, e.g., Joint Opposition of AT&T Inc., Deutsche Telekom AG, and T-Mobile USA, Inc. to Petitions to Deny
or to Condition Consent and Reply to Comments, filed June 10, 2011 at Christopher Decl. ¶ 8 (“AT&T/T-Mobile
Joint Opposition”); Applications of AT&T Inc. and Deutsche Telekom AG for Consent To Assign or Transfer
Control of Licenses and Authorizations, Description of Transaction, file no. 0004669383, WT Docket No. 11-65
(“AT&T/T-Mobile Transaction”), Sprint Petition to Deny at 21, 23 (noting that handsets developed for a national
market); see also AT&T/T-Mobile Transaction, Leap Wireless Petition to Deny at 9-10. Moreover, every plan these
firms offer today provides coverage over at least the provider’s entire network. (At one time, providers offered local
or regional plans with rates and coverage differing depending on where it was sold.)
109 See, e.g., Fifteenth Annual Mobile Wireless Competition Report, 26 FCC Rcd at 9748-50 ¶¶ 129-136. See also
AT&T/T-Mobile Transaction,
Sprint Nextel Petition to Deny at 23-24, Appendix A.
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wireless services.110 In addition, under the current market structure certain key elements, such as the
development and the deployment of mobile broadband equipment and devices, are largely developed and
deployed on a national scale. Because of the important national characteristics, competition that occurs at
a local level is unlikely to affect, for example, the pricing and plans that the nationwide providers offer
unless there is enough competition in enough local markets to make a nationwide pricing or plan change
economically rational. Moreover, evaluating this proposed transaction not only on a local level but also
on a national level is particularly appropriate in this instance because AT&T is seeking to acquire
Qualcomm’s nationwide footprint of unpaired spectrum. Indeed, AT&T’s stated intention is to use
Qualcomm’s nationwide spectrum to bond with its existing nationwide spectrum to be used for AT&T’s
LTE network.111
36. Many commenters agree that we should analyze both the local and national competitive
impacts. RTG contends that “the proposed transaction will be detrimental to competition in the mobile
wireless marketplace, both on a national and local level” because AT&T would exercise the additional
market power gained as a result of this transaction and post-transaction AT&T will hold a substantial
spectrum interest in markets throughout the United States.”112 DISH argues that a large number of
consumers choose their service providers based partly on the providers’ ability to provide a seamless
nationwide customer experience, and this spectrum would enable a regional carrier to transform itself into
a nationwide carrier, or provide an input to support a new market entrant.113 We note that in its prior
proposed transactions before the Commission, AT&T has consistently advocated that the Commission
examine the national market in our relevant geographic market analysis. 114
37. Accordingly, we find it is in the public interest not only to consider the local markets, but also
to consider the effect of this transaction at the national level.
38. Input Market for Spectrum. In evaluating this transaction, we consider AT&T’s holdings that
the Commission has found in recent transactions to be “suitable” and “available” in the near term for the
provision of mobile telephony/broadband services.115 We also analyze the spectrum concentration
associated with this transaction by focusing on spectrum suitable for mobile data services over broadband
networks because that spectrum is likely to be a critical input as the market continues its transition to
mobile broadband services. As the Commission previously has explained, suitability is determined by
whether the spectrum is capable of supporting mobile service given its physical properties and the state of
equipment technology, whether the spectrum is licensed with a mobile allocation and corresponding
service rules, and whether the spectrum is committed to another use that effectively precludes its uses for


110 See AT&T/T-Mobile Transaction, Sprint Nextel Petition to Deny at 24-25.
111 AT&T Complete Response to Information Request (June 10, 2011) at 9. See also Application, Public Interest
Statement at 14 (stating “[t]he 6 MHz of Lower 700 MHz D block spectrum nationwide complements AT&T’s
existing holdings and will provide additional capacity everywhere”).
112 RTG Reply at 1; RTG Petition to Deny at 7.
113 DISH Petition to Deny at 3-4.
114 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8722 ¶ 37, Application, Public Interest Statement at 22-23
(filed May 22, 2009); AT&T/Centennial Order, 24 FCC Rcd at 13933 ¶ 39, Application, Public Interest Statement at
28-29 (filed Nov. 21, 2008).
115 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8723-24 ¶ 39; AT&T-Centennial Order, 24 FCC Rcd at
13935 ¶ 43; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17473 ¶ 53; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17591-92 ¶ 53; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21560-61 ¶ 81.
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the relevant mobile service.116 With respect to availability, we consider particular spectrum to be a
relevant input if it is fairly certain that it will meet the criteria for suitable spectrum in the near term.117
39. Using the suitability criteria, the Commission has previously determined that spectrum
suitable for the provision of mobile telephony and mobile broadband services should include cellular,
PCS, SMR, and 700 MHz band spectrum, as well as AWS-1 and BRS spectrum where available.118 The
Commission has, in the past, considered, but declined to include in its analysis, several other spectrum
bands – including EBS, MSS/ATC, AWS-2/3, WCS, 3650-3700 MHz, and 2155-2175 MHz.119
40. The Applicants request that we revise the current spectrum screen in our consideration of this
transaction. Specifically, the Applicants urge us, as AT&T has in the past, to include all BRS120 and EBS
spectrum in the spectrum screen, arguing the BRS/EBS transition is complete121 and that Clearwire and its
partners (including Sprint Nextel and Time Warner Cable) are currently using BRS/EBS spectrum to
provide mobile broadband services.122 In addition, the Applicants argue that we should include an
additional 90 megahertz of MSS/ATC spectrum in the screen, claiming that MSS/ATC providers,
including LightSquared, will soon be providing mobile wireless services similar to services provided by


116 See AT&T-Verizon Wireless Order, 25 FCC Rcd at 8723-24 ¶ 39; AT&T-Centennial Order, 24 FCC Rcd at
13935 ¶ 43; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17473 ¶ 53; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17591-92 ¶ 53.
117 In the past, the Commission has considered the spectrum to be a relevant input if it met the criteria for suitable
spectrum in the near term or within two years. The Commission has emphasized that regarding the presence and
capacity of rival service providers, we will look at “the near-term opportunities to obtain access to additional
spectrum.” See, e.g., Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 174596 ¶ 98; Application of AT&T Inc. and
Dobson Communications Corp. for Consent to Transfer Control of Licenses and Authorizations
, WT Docket No.
07-153, Memorandum Opinion and Order, 22 FCC Rcd 20295, 20323-24 ¶ 56 (“AT&T-Dobson Order”). At the
time that these transaction orders were released, the DOJ/FTC Merger Guidelines used a two-year time frame for
the entry to be considered timely for determining a significant market impact. See Horizontal Merger Guidelines,
issued by the U.S. Department of Justice and the Federal Trade Commission, at § 3.2 (Apr. 2, 1992, revised Apr. 8,
1997) (“DOJ/FTC Merger Guidelines”). In 2010, the DOJ released the new DOJ/FTC Horizontal Merger
Guidelines
, and the guidelines removed the two-year period for timeliness of availability. Under these new
guidelines, the relevant section states that “in order to deter the competitive effects of concern, entry must be rapid
enough.” See 2010 DOJ/FTC Horizontal Merger Guidelines at § 9.1. Accordingly, we consider the spectrum to be
a relevant input if it will meet the criteria for suitable spectrum in the near term.
118 See Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17591-92 ¶ 53.
119 See AT&T-Centennial Order, 24 FCC Rcd at 13935-36 ¶ 44; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at
17479 ¶¶ 67-68; Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17599 ¶¶ 71, 73.
120 In prior transactions, the Commission decided to include 55.5 megahertz of BRS spectrum in those markets in
which the transition to a new band plan suited for the provision of mobile broadband has been completed Verizon
Wireless-ALLTEL Order
, 23 FCC Rcd at 17478 ¶ 65, Sprint Nextel-Clearwire Order, 23 FCC Rcd 17596-99 at ¶¶
62-70. In those decisions, the Commission excluded BRS spectrum associated with the Middle Band Segment
(MBS) channels, BRS Channel 1, and the J and K guard bands.
121 Application, Public Interest Statement at 24. See also Letter from Joan Marsh, Vice President, Federal
Regulatory, AT&T Services, Inc., to Marlene H. Dortch, Secretary, Federal Communications Commission (Dec. 9,
2011) ("AT&T December 9, 2011 Letter"), at 2.
122 Application, Public Interest Statement at 22-25. See also AT&T December 9, 2011 Letter at 2.
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terrestrial firms.123 Meanwhile, RCA argues that we should revise the spectrum screen to include WCS
spectrum, asserting there is no longer a valid basis to exclude AT&T’s WCS spectrum holdings from the
Commission’s spectrum concentration analysis in light of statements in the National Broadband Plan
regarding WCS spectrum’s suitability for broadband services and because of the Commission’s recent
WCS Report and Order.124 While the Applicants oppose including WCS spectrum, they assert that, even
if WCS were included, AT&T’s attributable spectrum would still be below any initial screen that included
WCS spectrum except in a small number of counties.125
41. As discussed in greater detail below, because under any version of the overall spectrum
screen relatively few, or no, local markets are triggered for further competitive analysis, we determine
that there is no need to formally address what spectrum should be included in the Commission’s spectrum
screen at this time.
42. While we are not revisiting the spectrum screen for the purposes of evaluating this particular
transaction, we anticipate that as we consider the input market for spectrum in future transactions,
revisions to the screen may be necessary. For instance, as the provision of mobile broadband services
becomes increasingly central to wireless transactions, the Commission may find it appropriate to reduce
the amount of suitable Specialized Mobile Radio (“SMR”) spectrum included in the screen from 26.5
megahertz to 14 megahertz to reflect the relevant portion of SMR spectrum through which mobile
broadband service can be provided.126 Further, the Commission will continue to monitor any
technological or market-driven developments, including those issues raised in the instant record, and will
adjust the screen where appropriate to accommodate these changes.

C.

Spectrum Concentration

43. Given the importance of spectrum as a resource for wireless providers to compete effectively,
we review the spectrum concentration that would result if this transaction is approved.127 In particular,


123 Application, Public Interest Statement at 27. See also AT&T December 9, 2011 Letter at 2 (urging the
Commission to also include “the PCS G block in which Sprint has announced it will launch LTE service in 2012, as
well as MSS spectrum”). In addition to the industry developments that the Applicants describe, they state that,
through a rulemaking, the Commission is seeking to add further flexibility in the use of MSS spectrum for the
provision of mobile broadband services. Application, Public Interest Statement at 27 (citing Fixed and Mobile
Services in the Mobile Satellite Service Bands at 1525-1559 MHz and 1626.5-1660.5 MHz, 1610-1626.5 MHz and
2483.5-2500 MHz, and 2000-2020 MHz and 2180-2200 MHz, Notice of Proposed Rulemaking and Notice of
Inquiry
, ET Docket No. 10-142, 25 FCC Rcd 9481 (2010)). See also AT&T December 9, 2011 Letter at 2.
124 RCA Petition to Deny at 10-11 (citing the National Broadband Plan and the WCS Report and Order).
125 Application, Public Interest Statement at 21.
126 In prior transactions, the Commission has included 26.5 megahertz of SMR spectrum. See Fifteenth Annual
Mobile Wireless Competition Report
at Appendix A, 230-31 n. 13. On July 8, 2004, the Commission adopted a new
band plan for the 800 MHz band (See FCC Adopts Solution to Interference Problem Faced by 800 MHz Public
Safety Radio Systems, News Release, FCC, July 8, 2004), whereby 14 megahertz of ESMR spectrum is becoming
available on a contiguous basis that is suitable for commercial mobile broadband use. According to the Quarterly
Progress Reports filed with the Commission by the 800 MHz Transition Administrator, a substantial number of
markets have already been completely rebanded, (http://www.800ta.org/content/reporting/QPR_06.30.11.pdf), with
virtually all the rest of the country expected to be transitioned in the next couple of years. Thus, when conducting
competitive analysis in the future, the Commission may decide to include only the 14 megahertz of SMR spectrum
suitable and available for mobile broadband services.
127 As the Commission stated in its 2000 Biennial Review of CMRS Spectrum Aggregation Limits, which sunset the
Commission’s spectrum cap, "[w]e find that, under the statutory regime set out by Congress, the Commission has an
(continued….)
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we evaluate the competitive effects of AT&T’s post-transaction spectrum holdings on both a local and
national level. We find that the proposed spectrum acquisition, without any mitigation measures, has the
potential to harm competition in the wireless marketplace. In subsequent sections, however, we conclude
that adopting certain conditions will alleviate these concerns and that, in light of these conditions, the
public interest benefits of the proposed transaction will outweigh potential competitive harm.
44. Our market-specific analysis of spectrum aggregation generally yields the same bottom-line
results under a number of variations of the spectrum screen. While some variations result in up to three
markets being triggered, a closer look at each of the markets triggered reveals little concern for direct
competitive harm from general spectrum aggregation in those markets.
45. At the national level, AT&T and Verizon have the most substantial spectrum holdings. There
are a number of different ways to attempt to measure nationwide holdings. For example, if we look at
providers’ holdings on a MHz*POPs basis,128 AT&T holds approximately 21 percent of the relevant
spectrum, Qualcomm would hold approximately 2 percent of this spectrum, Verizon Wireless would hold
approximately 22 percent, Sprint Nextel, 13 percent, T-Mobile, 12 percent, and Clearwire, 12 percent.129
Under this measure, implementation of this transaction would still leave available for competitors at the
national level more than three quarters of the spectrum suitable for mobile voice or broadband service.
46. A number of petitioners also urge the Commission to address concentration of below 1 GHz
spectrum and argue that below 1 GHz spectrum is particularly valuable for providing mobile broadband
services.130 For example, T- Mobile points to the Commission’s Fourteenth Annual Mobile Wireless
Competition Report
for support, where the Commission noted that the characteristics of spectrum below 1
GHz make it particularly suitable for wireless broadband services, and that lower-frequency spectrum
possesses superior propagation characteristics that create certain advantages in the provision of mobile
service, especially in rural areas.131 RCA contends that low-frequency spectrum is particularly valuable
(Continued from previous page)


obligation, distinct from that of DOJ, to consider as part of the Commission’s public interest review the
anticompetitive effects of acquisitions of CMRS spectrum, including those that occur in the secondary market."
Biennial Review of CMRS Spectrum Aggregation Limits, 16 FCC Rcd at 22699 ¶ 62.
128 The “MHz*POPs” metric allows the aggregation of spectrum holdings from different areas by multiplying the
megahertz of spectrum held in an area by the population in that area. Metrics that reflect the different values per
megahertz of different bands would yield similar results.
129 The MHz*POPs percentages in this paragraph were calculated based on data in the Commission's Universal
Licensing System regarding providers' current holdings in the following spectrum bands: 700 MHz Lower Band (A-
E Block); 700 MHz Upper Band (C & D Blocks); AWS-1; Broadband PCS (including spectrum licensed to Sprint
Nextel in the 800 MHz rebanding process); Cellular; BRS (excluding BRS spectrum associated with the MBS
channels, BRS Channel 1, and the J and K guard bands); and SMR (26.5 megahertz). Spectrum amounts were
estimated on a county basis.
130 See, e.g., DISH Petition to Deny at 4-5 (“if being a carrier with a nationwide footprint makes a company best
suited to get more nationwide spectrum blocks, then the wireless duopoly will only become more entrenched,
creating a vicious cycle whereby no new entrant could obtain enough spectrum to create a national footprint and
compete on a nationwide level”); King Street Reply at 4 (“upon consummation of the transaction, AT&T and
Verizon will have more than 80% of all 700 MHz spectrum”); Free Press Petition to Deny at 3; RCA Petition to
Deny at 11.
131 See T-Mobile March 11, 2011 Letter at 2 (citing the Fourteenth Annual Mobile Wireless Competition Report).
See also Free Press Petition to Deny 11-12; RTG Petition to Deny at 8-9 (“the current spectrum screen ignores all
differences among the included bands in terms of propagation characteristics, infrastructure expenses, technical and
service rules, international harmonization, and licensing arrangements”).
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in reaching rural areas and point out that even Applicants’ experts concede that “all else being equal,
lower-frequency signals carry further and may penetrate buildings more readily than higher frequency
signals.”132
47. Applicants argue, however, that the Commission has not formally distinguished between
spectrum below and above 1 GHz in the context of licensee transfer applications, and should not begin to
do so now.133 While they acknowledge that spectrum below 1 GHz has superior propagation and can
allow for cost savings when building out a network, especially in rural areas, they argue any such cost
savings are already reflected in higher prices paid for the spectrum at auction or in the secondary
market.134 The Applicants also contend that higher band spectrum has several advantages, including its
use for adding needed capacity.135 With respect to addressing capacity-constrained areas, they argue that
“both coverage and capacity must be considered in concert with one another in any effective wireless
deployment.”136
48. We note that, by adding the Qualcomm spectrum to its portfolio, AT&T would have
substantial holdings under 1 GHz. Specifically, in 134 CMAs, AT&T’s post-transaction below 1 GHz
holdings would range from between one third to approximately one half of the below 1 GHz spectrum
that is potentially available in the near term for mobile voice or broadband services, and 66 of these
CMAs are in the top 100 CMAs ranked by population. Further, AT&T would hold more than one-third
of below 1 GHz spectrum nationwide, measured on a MHz*POPs basis.137 We note as well that,
nationwide, AT&T holds 44 percent of the Cellular spectrum and, before this transaction, 25 percent of
the 700 MHz spectrum, and Verizon Wireless holds 48 percent of the Cellular spectrum and 43 percent of
the 700 MHz spectrum, measured on a MHz*POPs basis. Post-transaction, AT&T would hold
nationwide 35 percent of 700 MHz spectrum and 34 percent of below 1 GHz spectrum, measured on a
MHz*POPs basis. AT&T and Verizon Wireless combined would hold nationwide approximately 73
percent of below 1 GHz spectrum, measured on a MHz*POPs basis.
49. Based on the record in this proceeding – and the Commission’s analysis in the Fifteenth
Annual Mobile Wireless Competition Report – we find that it is prudent to inquire about the potential
impact of AT&T’s aggregation of spectrum below 1 GHz as part of the Commission’s case-by-case
analysis. In the United States, there are frequency bands suitable for mobile broadband services at very
different frequencies: for example, the 700 MHz and Cellular (850 MHz) bands fall below 1 GHz, and
the AWS, PCS, BRS, and EBS bands – at around 2 and 2.5 GHz – are well above 1 GHz. As both the


132 RCA Reply at 7. In addition, Free Press indicates that “[l]icenses to use ‘beachfront’ spectrum below 1 GHz
confer significant advantages relative to other holdings because broadband networks using that spectrum can be built
more cheaply than those that rely on spectrum above 1 GHz. Free Press Petition to Deny at 3; see also Free Press
Petition to Deny 11-12.
133 Joint Opposition at 11-12.
134 Joint Opposition at 12-13. See also Joint Opposition at 20.
135 Joint Opposition at 15-18 (also citing Joint Declaration of Jeffrey H. Reed and Nishith D. Tripathi).
136 The Applicants contend that such capacity-driven network design increasingly is required in urban and suburban
areas with high data traffic demand and will be required in those rural areas where there are capacity constraints.
Joint Opposition at 19.
137 The MHz*POPs percentages set forth in this paragraph for below 1 GHz spectrum were calculated based on data
in the Commission's Universal Licensing System regarding providers' current holdings in the following spectrum
bands: 700 MHz Lower Band (A-E Block); 700 MHz Upper Band (C & D Block); Cellular; and SMR (26.5
megahertz). Spectrum amounts were estimated on a county basis.
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Commission and DOJ have recognized, spectrum resources in different frequency bands can have widely
disparate technical characteristics that affect how the bands can be used to deliver mobile services.138 The
more favorable propagation characteristics of lower frequency spectrum, (i.e., spectrum below 1 GHz)
allow for better coverage across larger geographic areas and inside buildings.139 The Commission has
expressly contrasted the value of lower frequency spectrum – which has “excellent propagation”
characteristics – with higher frequency bands such as PCS and AWS spectrum, which “make it ideal for
delivering advanced wireless services to rural areas.”140 AT&T itself has recognized this distinction in
the context of its bid to acquire T-Mobile, where it asserted that a significant benefit to T-Mobile
customers would be their newly acquired access to AT&T’s spectrum below 1 GHz, enabling those


138 Fifteenth Annual Mobile Wireless Competition Report, 26 FCC Rcd at 9832-37 ¶¶ 289-297. In its consideration
of mobile wireless competition issues, the DOJ has noted the differences between the use of lower and higher
frequency bands. See United States of America et al. v. Verizon Communications Inc. and ALLTEL Corporation,
Competitive Impact Statement, Case No. 08-cv-1878, at 5-6 (filed Oct. 30, 2008), available at
http://www.justice.gov/atr/cases/f238900/238947.pdf (stating that “ because of the characteristics of PCS spectrum,
providers holding this type of spectrum generally have found it less attractive to build out in rural areas”); United
States of America v. AT&T Inc. and Dobson Communications Corporation, Competitive Impact Statement, Case
No. 1:07-cv-01952, at 5, 11, 13 (filed Oct. 30, 2007), available at
http://www.justice.gov/atr/cases/f227300/227309.pdf (asserting that “the propagation characteristics of [1900 MHz
PCS] spectrum are such that signals extend to a significantly smaller area than do 800 MHz cellular signals. The
relatively higher cost of building out 1900 MHz spectrum, combined with the relatively low population density of
the areas in question, make it unlikely that competitors with 1900 MHz spectrum will build out their networks to
reach the entire area served by” the two 800 MHz Cellular providers).
139 See, e.g., Service Rules for the 698-746, 747-762 and 777-792 MHz Band, WT Docket No. 06-150, Revision of
the Commission’s Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket No.
94-102, Section 68.4(a) of the Commission’s Rules Governing Hearing Aid-Compatible Telephone, WT Docket No.
01-309, Biennial Regulatory Review – Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize
Various Rules Affecting Wireless Radio Services, WT Docket No. 03-264, Former Nextel Communications, Inc.
Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission’s Rules, WT Docket No. 06-169,
Implementing a Nationwide, Broadband Interoperable Public Safety Network in the 700 MHz Band, PS Docket No.
06-229, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State, and Local
Public Safety Communications Requirements Through the Year 2010, WT Docket No. 96-86, Declaratory Ruling on
Reporting Requirement Under Commission’s Part 1 Anti-Collusion Rule, WT Docket No. 07-166, Second Report
and Order
, 22 FCC Rcd 15289, 15349 ¶ 158, 15354-55 ¶ 176, 15400-401 ¶ 304 (2007) (recognizing the excellent
propagation characteristics of 700 MHz band spectrum) (“700 MHz Second R&O”); Unlicensed Operation in the TV
Broadcast Bands, ET Docket No. 04-186, Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3
GHz Band, ET Docket No. 02-380, Second Report and Order and Memorandum Opinion and Order, 23 FCC Rcd
16807, 16820-21 ¶ 32 (2008) (propagation characteristics of the TV bands enable service at greater ranges than in
the 2.4 GHz band). In the TV White Spaces Second Memorandum Opinion and Order, the Commission noted that
this particular spectrum has excellent propagation characteristics that allow signals to reach farther and penetrate
walls and other structures. Unlicensed Operation in the TV Broadcast Bands, ET Docket No. 04-186, Additional
Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band, ET Docket No. 02-380, Second
Memorandum Opinion and Order
, 25 FCC Rcd 18661, 18662 ¶ 1 (2010).
140 700 MHz Second R&O, 22 FCC Rcd at 15349 ¶ 158; see also Fifteenth Annual Mobile Wireless Competition
Report,
26 FCC Rcd at 9832-37 ¶¶ 289-297; Fourteenth Annual Mobile Wireless Competition Report, 25 FCC Rcd
at 11570-76 ¶¶ 268-280. The Commission also recognizes, as the Applicants suggest, the value in holding spectrum
assets in different frequency bands. Specifically, we acknowledge that the combination of spectrum below 1 GHz
and higher frequency spectrum may be helpful for the development of an effective nationwide competitor that can
address both coverage and capacity concerns. See Fifteenth Annual Mobile Wireless Competition Report, 26 FCC
Rcd at 9837 ¶ 297.
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customers to receive both extended rural coverage and “superior in-building and in-home service” due to
access to AT&T’s spectrum below 1 GHz.141 We also note that there is significantly less below 1 GHz
spectrum available for mobile broadband service than above 1 GHz spectrum.142
50. Our case-by-case analysis must also take into account that AT&T asserts that it plans to bond
the unpaired Qualcomm 700 MHz spectrum primarily with its paired spectrum above 1 GHz for downlink
purposes.143 Such bonding likely would not result in the full range of benefits associated with spectrum
below 1 GHz, such as increased coverage and in-building penetration. We note, however, that AT&T’s
bonding of unpaired 700 MHz spectrum with AWS-1 would achieve significant increases in downlink
capacity associated with the use of below 1 GHz spectrum. In addition, AT&T could bond the
Qualcomm spectrum with cellular spectrum at 850 MHz and fully achieve benefits of increased coverage
and in-building penetration associated with below 1 GHz spectrum.144
51. Conclusion. After considering all of the factors discussed above, we find that AT&T’s
proposed acquisition of Qualcomm’s Lower 700 MHz D and E Block licenses raises some competitive
concerns. Post-transaction, AT&T would hold a significant proportion of the available spectrum suitable
for the provision of mobile voice or broadband services, particularly below 1 GHz spectrum, that has
technical attributes important for other competitors to meaningfully expand their provision of mobile
broadband services or for new entrants to have a potentially significant impact on competition. As
explained below, however, we conclude that this potential harm can be mitigated with certain targeted
conditions to help prevent anticompetitive harm. In particular, we adopt conditions to help ensure that
AT&T’s use of the newly acquired spectrum does not impede the use of neighboring 700 MHz spectrum
by potential competitors in the provision of broadband services and by limiting AT&T’s ability to use the
Qualcomm spectrum in a way that deprives other carriers of the benefits of the Commission’s roaming
rules.


141 Applications of AT&T Inc. and Deutsche Telekom AG for Consent To Assign or Transfer Control of Licenses
and Authorizations, Description of Transaction, file no. 0004669383 (“Application”), Description of Transaction,
Public Interest Showing, and Related Demonstrations (“Public Interest Statement”) at 44 (filed April 21, 2011).
AT&T states that “. . . customers will enjoy improved coverage, including superior in-building and in-home service,
because of the denser grid and access to 850 MHz spectrum.” AT&T/T-Mobile Transaction, Application, Public
Interest Statement at 44; see AT&T/T-Mobile Transaction, Application, Declaration of William Hogg at 33 ¶ 63
(stating that “in-building coverage will improve for both GSM and UMTS subscribers due to the denser cell grid and
the benefits of low-band 850 MHz cellular spectrum.”).
142 Except in limited areas where AWS-1 or BRS is not yet available, there is 270 megahertz of suitable spectrum
available above 1 GHz, and 144 megahertz below 1 GHz – including 50 megahertz of cellular spectrum, 14
megahertz of SMR spectrum, and 80 megahertz of 700 MHz spectrum, including the unpaired spectrum at issue
here.
143 Application, Public Interest Statement at 15 (“In those areas where AT&T will rely on AWS spectrum for its
LTE network, AT&T will bond existing AWS spectrum with the Qualcomm Spectrum to expand the downlink
capacity.”); Joint Opposition at 2.
144 See Application, Public Interest Statement at 15 (stating that “where AT&T currently does not hold 700 MHz or
AWS spectrum, the transaction will enable AT&T to bond the unpaired Qualcomm Spectrum with 850 or 1900
MHz spectrum”).
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VI.

OTHER ISSUES

A.

Roaming

52. Background. Roaming occurs when the 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 an outgoing call, to receive an incoming call, or to continue an in-progress call.145 The Commission
has adopted roaming rules for voice and data services. The Commission’s voice roaming rules, adopted
in 2007, provide that upon a reasonable request, CMRS carriers are obligated to provide automatic
roaming to any technologically compatible, facilities-based CMRS carrier on reasonable and not
unreasonably discriminatory terms and conditions, pursuant to sections 201 and 202 of the
Communications Act.146 This obligation applies to any real-time, two-way switched voice or data service
that is interconnected with the public switched network and utilizes an in-network switching facility that
enables the carrier to re-use frequencies and accomplish seamless hand-offs of subscriber calls, as well as
push-to-talk and text messaging services offered by CMRS carriers.147 The data roaming rule, adopted in
April 2011, requires facilities-based providers of commercial mobile data services to offer data roaming
arrangements to other such providers on commercially reasonable terms and conditions, subject to certain
limitations.148
53. In petitions and other filings in this proceeding submitted before the Commission adopted the
Data Roaming Order,149 several parties contended that an increase in AT&T’s spectrum holdings will
adversely affect the market for data roaming.150 For example, RCA asserts that the record in the
Commission’s voice and data roaming docket and in other AT&T transactions reveals widespread
industry complaints of impediments to securing roaming arrangements with AT&T.151 More specifically,
RCA contends that the extent of AT&T’s ability to impede data roaming is directly correlated to the


145 See, e.g., AT&T-Verizon Wireless Order at 25 FCC Rcd at 8741 ¶ 87; AT&T-Centennial Order, 24 FCC Rcd at
13963 ¶ 120; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21586 ¶ 166; see also Reexamination of Roaming
Obligations of Commercial Mobile Radio Service Providers, Automatic and Manual Roaming Obligations
Pertaining to Commercial Mobile Radio Services, WT Docket Nos. 05-265, 00-193, Memorandum Opinion and
Order and Notice of Proposed Rulemaking
, 20 FCC Rcd 15047, 15048 ¶ 2 (2005).
146 47 C.F.R. § 20.12(d). See also AT&T-Verizon Wireless Order, 25 FCC Rcd at 8742 ¶ 88; 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, 4190 ¶ 18 (2010) (“Roaming Order on Reconsideration”); 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, 15826 ¶ 23 (2007).
147 47 C.F.R. § 20.12(a)(2). See also Roaming Order on Reconsideration, 25 FCC Rcd at 4184 ¶¶ 5-6.
148 47 C.F.R. § 20.12(e); see also Reexamination of Roaming Obligations of Commercial Mobile Radio Service
Providers and Other Providers of Mobile Data Services, WT Docket No. 05-264, Second Report and Order, 26 FCC
Rcd 5411, 5432 ¶ 43 (2011) (“Data Roaming Order”).
149 The Commission adopted the Data Roaming Order on April 7, 2011. See Data Roaming Order, 26 FCC Rcd
5411 (2011).
150 See RTG Petition to Deny at 14-17; RTG Reply at 8-9; RCA Petition to Deny at 9-10; RCA Reply at 8; Free
Press Petition to Deny at 18-19.
151 RCA Petition to Deny at 9; see also RTG Petition to Deny at 14 (AT&T and Verizon have “fought vociferously”
to prevent mobile users who are not their customers from engaging in 3G data roaming, and every indication is that
they will do the same when it comes to 4G and future IP-based mobile wireless technologies).
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leverage it enjoys as a result of its spectrum holdings.152 Several parties request that, if the Commission
approves the proposed transaction, it require conditions relating to data roaming. RTG urges the
Commission to require AT&T to enter into data roaming agreements with other carriers on reasonable
terms and conditions.153 Similarly, RCA asserts that the Commission should require AT&T to provide
commercially reasonable data roaming agreements to any requesting carrier,154 and Cellular South argues
in its Petition to Deny that the Commission should require AT&T to enter into automatic data roaming
agreements on reasonable and nondiscriminatory terms.155 Free Press asserts that the Commission should
require AT&T to enter into data roaming agreements on commercially reasonable terms and conditions
with “any and all interested parties” for its current HSPA and HSPA+ mobile broadband services and for
its future services built on LTE.156
54. RTG also urges the Commission to require AT&T to provide public safety with priority
access on its commercial networks157 and argues that this would augment public safety interoperability
with the 700 MHz band and promote the deployment of a nationwide, interoperable public safety wireless
broadband network, consistent with the Commission’s public safety broadband goals.158
55. In response, the Applicants argue that petitioners’ roaming arguments apply broadly across
the industry and are not transaction-specific.159 Moreover, the Applicants assert that they have already
responded to these arguments in the roaming rulemaking proceedings.160 Further, they assert that
imposing the requested conditions on AT&T alone would harm the public interest by constraining
AT&T’s ability to compete, discouraging it from investing, and disadvantaging customers.161 In addition,
they assert that imposing such conditions on assignment applications would impede the functioning of the
secondary market for spectrum.162
56. Discussion. As discussed earlier, we find this transaction results in spectrum concentration
that raises the potential for competitive harm, and thus we must carefully consider whether to impose a
roaming condition in the context of this transaction. We decline here to apply the roaming conditions
requested by RTG, RCA, Cellular South, and Free Press, which would impose a general data roaming
requirement on AT&T,163 but we do impose the more circumscribed roaming condition described below.


152 RCA Reply at 8.
153 RTG Petition to Deny at 19; see also RTG Reply at 15.
154 RCA Petition to Deny at 12.
155 See Cellular South Petition to Deny at ii, 19. See also note 163 infra.
156 Free Press Petition to Deny at 18.
157 RTG Petition to Deny at 19-23; see also RTG Reply at 20-21 (urging Commission to adopt a condition requiring
AT&T to provide public safety with priority access on its commercial networks at the lowest unit charge).
158 RTG Reply at 21.
159 Joint Opposition at 28.
160 See Joint Opposition at 29-30.
161 Id. at 32-33.
162 Id. at 33.
163 We note that our decision is consistent with the Reply filed by Cellular South in this proceeding, which notes that
the Commission is “on the verge” of adopting a data roaming rule that would require facilities-based providers of
commercial mobile data services to offer data roaming arrangements to other such providers on commercially
(continued….)
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As noted above, in April 2011, after the completion of the pleading cycle in this proceeding, the
Commission adopted a data roaming rule that applies to facilities-based providers of commercial mobile
data services, including AT&T.164 Under this rule, all facilities-based providers of commercial mobile
data services must offer data roaming arrangements to other such providers on commercially reasonable
terms and conditions, subject to certain limitations.165
57. The adoption of the rule does not, however, obviate the need to consider whether there is any
potential roaming-related harm that might arise out of this transaction. To mitigate the potential
anticompetitive effects of this transaction described below, we adopt a more circumscribed condition to
ensure that AT&T does not use the Qualcomm spectrum in a way that deprives other providers of the
benefits of the Commission’s roaming rules. Just as we noted in the Data Roaming Order that issues may
arise when one of two overlapping frequency bands is a subset of the other, such as exists in the Lower
700 MHz Band,166 we recognize the potential for AT&T to incorporate the Qualcomm spectrum into its
network in such a way as to preclude roaming on spectrum it chooses to bond through supplemental
downlink technology to the Lower 700 MHz D and/or E Blocks. For example, if AT&T bonds the
Qualcomm spectrum with AWS-1 spectrum, AT&T cannot use that bonding as a basis to decline to offer
roaming to providers offering service on AWS-1 spectrum. We condition our approval of this transaction
on the requirement that AT&T may not configure its network so that the supplemental downlink
technology creates a barrier to roaming under the Commission’s existing roaming rules. Thus, AT&T
may not incorporate the Qualcomm spectrum into its network in such a way as to preclude roaming by a
provider that otherwise supports the same primary spectrum, e.g., AWS, Cellular, or PCS, but does not
support the supplemental downlink technology.167 In addition, AT&T may not use supplemental
downlink technology in the Lower 700 MHz D and/or E blocks to deprive other providers of the benefits
of roaming onto AT&T’s other spectrum holdings in the Lower 700 MHz band.
58. We deny RTG’s request for a condition requiring priority access for public safety. While
RTG raises an important issue, we find that it is not related to any specific harm arising out of this
transaction.168 In conclusion, we find that the roaming condition we are imposing herein is sufficient to
address any potential roaming-related harm that might arise out of this transaction.
(Continued from previous page)


reasonable terms and conditions and states that the adoption of such a rule “obviously will moot Cellular South's
request for a data roaming condition.” Cellular South Reply at 1-2.
164 See 47 C.F.R. § 20.12(e).
165 See 47 C.F.R. § 20.12(e)(1); see also Data Roaming Order, 26 FCC Rcd at 5432-33 ¶¶ 42-43.
166 See Data Roaming Order, 26 FCC Rcd at 5433 ¶ 46 n.128 (stating that the Commission “expect[s] that, when
one of two overlapping frequency bands is a subset of the other, a mobile device with a compatible air interface
technology that supports the larger of the two bands will be capable of communicating with a network deployed in
the smaller band”).
167 AT&T has stated that it intends to use the spectrum it acquires to provide supplemental downlink in conjunction
with other spectrum, such as AWS and PCS. See, e.g., Letter from Michael Goggin, General Attorney, AT&T, to
Marlene Dortch, FCC, WT Docket No. 11-18, RM-11592, RM-11626, filed July 29, 2011, at 5 (“AT&T plans to use
the Lower D and E Block spectrum for supplemental downlink only in conjunction with AWS, 850 MHz, or 1900
MHz spectrum as primary carriers.”) (emphasis in original).
168 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8747 ¶ 101; AT&T-Centennial Order, 24 FCC Rcd at
13929 ¶ 30; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17463 ¶ 29; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17582 ¶ 22; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21546 ¶ 43.
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B.

Interference Issues

59. Background. Under Section 27.50(c)(7) of the Commission’s rules, a licensee authorized to
operate in the 710–716, 716–722, or 740–746 MHz bands, or in any unpaired spectrum blocks within the
698–746 MHz band (such as the Qualcomm spectrum at issue in this proceeding), may operate a fixed or
base station at an Effective Radiated Power (ERP) of up to 50 kW within its authorized bandwidth.169
Further, the antenna height for such stations is limited only to the extent required to satisfy the
requirements of Section 27.55(b) of the rules.170 By contrast, other licensees in the Lower 700 MHz band
transmitting a signal with an emission bandwidth greater than 1 megahertz are restricted to an ERP of
1,000 to 2,000 watts/MHz and an antenna height of 305 m height above average terrain.171 AT&T states
that if the Lower 700 MHz D and E Block spectrum is integrated into AT&T’s LTE network and used for
supplemental downlink, the transmitters using these spectrum blocks will be deployed closer to the
ground and at much lower power levels than those permitted under existing Commission rules.172
60. Several parties ask the Commission to formally preclude AT&T from operating on its Lower
D and E Block spectrum at the higher power and antenna height limits permitted under Section
27.50(c)(7) and to require AT&T to comply with the limitations applicable to other Lower 700 MHz
spectrum.173 U.S. Cellular argues that such a condition would create consistent power levels and antenna
height restrictions across all of the Lower 700 MHz blocks and would mitigate interference into the
Lower 700 MHz A Block receive band, as well as provide operational benefits for all Lower A, B, and C
Block licensees.174 King Street asks the Commission to require AT&T to comply with Section 27.50(c),
excluding Subsection 27.50(c)(7), with respect to permissible height and power.175 RCA argues that the
Commission should harmonize the technical specifications and operating parameters of the assigned
spectrum to be consistent with those in the Lower A and B Blocks, including revising the 50 kW power
limit, “to avoid causing harmful interference with adjacent licensees.”176 In addition, Vulcan notes that
the possible deployment of uplink on the Lower D & E Blocks being acquired by AT&T may cause
interference to mobile devices operating on Lower A Block licenses.177 Furthermore, even if AT&T
deploys downlink operations, and operates under cellular-type power and antenna heights, commenters
express concern AT&T’s operations will cause interference to C Block licensees, pointing out that
“AT&T’s plan for Lower D/E poses a serious threat to C Block uplink performance” of C Block licensees
other than AT&T.178 AT&T responds generally that, despite its stated intention to operate at lower


169 47 C.F.R. § 27.50(c)(7).
170 Id.; see also 47 C.F.R. § 27.55(b).
171 See 47 C.F.R. § 27.50(c)(3), (4). Antenna height may increase if power level is reduced. See id.
172 See Application, Declaration of Kristin S. Rinne at ¶ 18 (Jan. 13, 2011).
173 See U.S. Cellular Petition for Conditional Grant at 4-5; King Street Petition to Condition Grant at 3-4; RCA
Petition to Deny at 12 & n.31.
174 See US Cellular Petition for Conditional Grant at 2, 4-5; U.S. Cellular Reply at 3.
175 King Street Petition to Condition Grant at 4.
176 See RCA Petition to Deny at 12 & n.31.
177 See Letter from Michele C. Farquhar, Counsel to Vulcan Wireless LLC, to Marlene Dortch, FCC, RM-11592 and
WT Docket No. 11-18, filed June 17, 2011 (Vulcan June 17, 2011 Ex Parte), Attachment at 4.
178 Letter from David L. Nace, Counsel to Cellular South, and Thomas Gutierrez, Counsel to King Street, to Marlene
Dortch, FCC, RM No. 11592 and WT Docket No. 11-18, filed May 27, 2011 (Cellular South and King Street May
27, 2011 Ex Parte), Attachment at 22.
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power, the requested conditions are not transaction-specific, that the Commission previously has
considered these issues in an industry-wide rulemaking proceeding, and that such a proceeding would be
the appropriate forum to air these concerns.179

61. Discussion. We condition our approval of this transaction on a few targeted technical
conditions designed to ensure that AT&T’s acquisition and use of additional valuable Lower 700 MHz
spectrum does not limit the potential of third parties to utilize fully other Lower 700 MHz spectrum.
Specifically, we condition the assignment of these licenses at issue on compliance with the following
requirements post-transaction: (1) AT&T must operate on the newly acquired Qualcomm spectrum under
the same power limits and antenna height restrictions that apply to the Lower 700 MHz A and B Block
licensees; (2) AT&T may not use these licenses for uplink transmissions; and (3) AT&T’s operations on
the newly acquired Qualcomm spectrum in areas in which it does not hold the Lower A, B, or C Block
license are conditioned on obligations, discussed in detail below, to avoid undue interference to the
operations of those Lower A, B, or C Block licensees.
62. First, we require that, consistent with its plans for using this spectrum set forth in its
application, AT&T operate on the newly acquired Qualcomm spectrum under the same power limits and
antenna height restrictions that apply to Lower 700 MHz A and B Block licensees. Specifically, we
condition our grant of this transaction on the requirement that AT&T must operate on the Lower D and E
Block licenses consistent with the limits set forth in Section 27.50(c), excluding Subsection 27.50(c)(7).
63. This condition serves the public interest by limiting the potential for harmful interference to
other lower 700 MHz licensees from high power operations in the D and E Block spectrum AT&T is
acquiring from Qualcomm. Such a condition will limit any additional harm to the ability of these lower
700 MHz licensees to compete with AT&T in the provision of broadband services. Moreover, this
condition is consistent with AT&T’s stated intention that it will use this spectrum only for supplemental
downlink.
64. We disagree with AT&T that this condition is not transaction-specific or should be addressed
in an industry-wide proceeding. We are approving this transaction in significant part on the basis that
AT&T has indicated that it intends to develop and deploy on the Qualcomm spectrum lower power,
supplemental downlink technology for the purposes of deploying mobile broadband services. We find
that the use of the lower 700 MHz D and E Block licenses in this manner affords transaction-specific
public interest benefits. In particular, the Applicants claim that the use of this spectrum will increase the
downlink capacity of LTE networks, which in turn will enable AT&T to serve more customers and to
provide better and faster services, while enabling the development and deployment of innovative devices
and applications.180
65. Second, we require AT&T, consistent with its statements in support of this application, to use
this spectrum only for downlink transmissions. As Vulcan asserts, the use of the Qualcomm spectrum for
uplink transmissions runs the risk of causing mobile-to-mobile interference to the mobile devices of
Lower A Block licensees.181 It is likely to be difficult and costly for the A Block licensee to remedy such
interference and thus significantly affects the ability of those licensees to use their own 700 MHz
spectrum. This condition is also fully consistent with AT&T’s stated plans for the use of Qualcomm’s
spectrum.


179 Joint Opposition at 32, n.113.
180 AT&T Complete Response of June 10, 2011 at 38-40.
181 See Vulcan June 17, 2011 Ex Parte, Attachment at 4.
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66. Finally, we impose a condition to mitigate possible interference caused by AT&T’s use of the
Lower D and E Blocks for supplemental downlink to the uplink operations of other licensees operating in
the Lower 700 MHz A, B, and C Blocks. Once AT&T commences operations on the Lower D and E
Blocks, the number of base stations transmitting on these frequencies nationwide could increase by two
orders of magnitude compared to the number of base stations required for high power broadcast use. Due
to the proximity of these downlink operations to uplink operations in the Lower 700 MHz A, B, and C
Blocks, there is a significant potential for operations on the Lower 700 MHz D and E Blocks to cause
interference to these uplink operations. Given the immediate adjacency of the D and C Blocks, we
conclude that potential interference from D Block downlink operations is an especially significant threat
to operations by C block licensees other than AT&T. In areas where AT&T controls both the C Block
and the supplemental downlink band, AT&T can effectively manage both sides of the interference
equation. Any other C Block licensee, however, will be significantly burdened by potential widespread
downlink operations by AT&T in the D and E Blocks. In addition, while the additional separation of the
Lower 700 MHz A and/or B Blocks from AT&T’s downlink operations limits the potential severity of
this interference to the A and B Block uplink operations, we believe that there is a possibility that
AT&T’s downlink operations could cause interference to those uplink operations as well. That AT&T
currently holds Lower 700 MHz C Block licenses that cover more than 80 percent of the U.S. population
only accentuates our concern that individual private negotiations with other Lower 700 MHz licensees
may not be able to successfully resolve these concerns in a timely and consistent manner that allows other
parties holding Lower 700 MHz A, B, and C Block licenses a full opportunity to use those licenses to
compete.
67. As a result of these concerns, we require AT&T to mitigate any such interference to Lower
A, B, and C Block licensees. Specifically, we require AT&T to take the following measures:
(1) coordinate with the A, B, or C Block licensee to mitigate potential interference; (2) mitigate
interference to A, B, or C Block operations within 30 days after receiving written notice from the A, B, or
C Block licensee; and (3) ensure that D/E Block transmissions in areas where another licensee holds the
A, B, or C Block license are filtered at least to the extent that D/E Block transmissions are filtered in
markets where AT&T holds the A, B, or C Block license, as applicable. Coordination and mitigation
steps should include, but are not limited to, the following measures: If a Lower A, B, or C Block licensee
other than AT&T deploys a network after AT&T deploys a network on its Lower D and/or E Block
spectrum in the same geographic market, AT&T will work with the A, B, or C Block licensee to identify
sites that will require additional filtering, and will help the A, B, or C Block licensee to identify proper
filters. AT&T is also required to permit these licensees to collocate on the towers it owns at prevailing
market rates.182 On the other hand, if a Lower A, B, or C Block licensee deploys a network before AT&T
deploys a network on its D and/or E Block spectrum in the same geographic market, AT&T will work
with the A, B, or C Block licensee to identify sites that will need additional filtering and will purchase
and pay for installation of required filters on such sites. For purposes of this condition, “deployment of a
network” shall be the date upon which the network is able to support a commercial mobile service.
68. If a dispute arises regarding interference to Lower A, B, and C Block licenses, Lower A, B,
and C Block licensees alleging that AT&T has failed to meet its obligations under this condition may file
a formal or informal complaint under the Commission's Part 1, Subpart E rules.183 As a procedural


182 See Letter from Joan Marsh, Vice President - Federal Regulatory, AT&T, to Marlene Dortch, FCC, WT Docket
No. 11-18, filed November 21, 2011 (referencing both collocation and filtering solutions as a means of addressing
potential interference concerns to Lower C Block licensees).
183 For purposes of enforcing this condition, references in the Commission’s rules to a “carrier” or “common carrier”
in the formal and informal complaint procedures incorporated herein will refer to AT&T.
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matter, such complaints must be filed with the Enforcement Bureau, which will closely coordinate with
the Wireless Telecommunications Bureau. If disputes arise, the Bureaus will work to facilitate resolution
of such disputes, including convening mediations in an effort to resolve matters informally. We note that
the Enforcement Bureau retains its authority to investigate on its own motion any potential violations. If
a dispute arises regarding interference to operations by Lower A, B, and C Block licensees, parties are
encouraged to contact Commission staff, in advance of any filing, for procedural guidance and to discuss
the possibility of mediation using the Commission's informal dispute resolution processes. We recognize
the need to resolve allegations of interference in violation of this condition swiftly, and accordingly will
allow requests for expedited treatment under the Enforcement Bureau’s Accelerated Docket
procedures.184 Pending consideration of a complaint, in extraordinary circumstances Commission staff
may require AT&T to refrain from operating on the D and E Blocks in the same geographic market as the
complainant, to the extent necessary to prevent harmful interference specifically alleged by the
complainant.

C.

Interoperability

69. Background. Several parties ask the Commission to impose conditions pertaining to device
interoperability.185 Vulcan urges the Commission to condition approval of the application by requiring
that any device operating on paired spectrum in the lower 700 MHz band must operate on all paired
spectrum in the lower 700 MHz Band.186 In addition, Vulcan proposes that this condition apply only to
new device offerings by AT&T, “beginning as early as 6 months after the transaction closes and fully
implemented two years following the close of the transaction.”187 Vulcan also states that to preserve
future interoperability and protect Lower A Block licenses from potential interference, the Commission


184 See 47 C.F.R. § 1.730. Furthermore, for good cause, pursuant to 47 C.F.R. § 1.3, the Commission may shorten
the deadlines or otherwise revise the procedures herein to expedite the adjudication of complaints.
185 See Cellular South Petition to Deny at 5-6, 19; RTG Petition to Deny at 19; RTG Reply Comments at 7; RCA
Petition to Deny at 12; King Street Petition to Condition Grant at 5; Free Press Petition to Condition Grant at 5;
Letter from Michele C. Farquhar, Counsel to Vulcan Wireless LLC, to Marlene Dortch, FCC, RM-11592 and WT
Docket No. 11-18, filed May 27, 2011 (Vulcan May 27, 2011 Ex Parte), Attachment at 6.
186 See Vulcan May 27, 2011 Ex Parte, Attachment at 6. Vulcan argues that its proposed condition would be
narrowly tailored and transaction specific. Further, according to Vulcan, it would not be onerous because it would
have no impact on current handset sales and thus would not result in stranded investment, because new phones are
constantly developed and deployed, and because new phone technology will be necessary to make use of Qualcomm
spectrum if the acquisition is approved. See id. Vulcan also asks the Commission to require interoperability “by the
earlier of the roll-out of AT&T’s LTE network or the initial 700 MHz build-out deadlines in 2013.” Vulcan Reply
Comments at 8. See also Letter from Thomas Gutierrez, Counsel for Cavalier Wireless, LLC, to Marlene Dortch,
FCC, WT Docket No. 11-18, filed Dec. 8, 2011 at 2 (supporting interoperability in the Lower 700 MHz Band, with
initiation by mid-year 2012 and completion by the end of 2012).
187 Letter from Michele C. Farquhar, Counsel to Vulcan Wireless, to Marlene Dortch, FCC, WT Docket No. 11-18,
RM 11592, filed Nov. 30, 2011 (regarding meeting with representatives from the Wireless Telecommunications
Bureau and the Office of Engineering and Technology), Attachment at 2; see also Letter from Michele C. Farquhar,
Counsel to Vulcan Wireless, to Marlene Dortch, FCC, WT Docket No. 11-18, RM 11592, filed Dec. 5, 2011,
Attachment at 5; Letter from Michele C. Farquhar, Counsel to Vulcan Wireless, to Marlene Dortch, FCC, WT
Docket No. 11-18, RM 11592, filed Dec. 7, 2011 at 1 (stating the Commission should afford “AT&T up to two
years to fully comply with any such condition and ensure that all of its 700 MHz mobile handsets operate on the
unified Lower 700 MHz band plan.”). As noted in n. 186, supra, Vulcan asked in its Reply Comments that this
proposed condition apply “by the earlier of the roll-out of AT&T’s LTE network or the initial 700 MHz build-out
deadlines in 2013.” Vulcan Reply at 8; see also Letter from Michele C. Farquhar, Counsel to Vulcan Wireless, to
Marlene Dortch, FCC, WT Docket No. 11-18, RM 11592, filed Oct. 31, 3011 at 1.
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should adopt a condition precluding AT&T from pairing its 700 MHz B and C Block licenses with any
newly acquired D and E Block licenses.188 RTG, RCA, and King Street ask the Commission to impose a
requirement for interoperability across the entire 700 MHz Band.189 Cellular South asks the Commission
to condition its approval of the transaction on a requirement that AT&T “cannot engage in any
anticompetitive 700 MHz equipment design and procurement practices or exclude A Block spectrum in
LTE wireless devices that it offers to its subscribers.”190 Free Press urges the Commission to “provide for
interoperability in band classes in 700 MHz spectrum so as not to hinder the ability of competitors to
deploy advanced devices.”191 The Applicants respond that interoperability issues are not specific to this
transaction,192 and that the issue applies broadly across the industry and therefore should be addressed in
an industry-wide rulemaking proceeding,193 and that such a condition would subject AT&T’s subscribers
to interference risks.194
70. Discussion. We agree that the lack of interoperability in the 700 MHz band raises important
public interest concerns. Promoting interoperability in the 700 MHz band may bring substantial public
interest benefits, such as encouraging the affordability and availability of 4G equipment, enhancing
competition by facilitating consumer choice, and facilitating the widespread deployment of broadband
services and competition, including access to broadband in rural and underserved areas. Interoperability
may also create greater roaming opportunities between 700 MHz licensees.195


188 Vulcan Reply Comments at 3-4.
189 See RTG Petition to Deny at 19; RTG Reply Comments at 7; RCA Petition to Deny at 12; King Street Petition to
Condition Grant at 5. King Street notes that the international standards group 3 GPP has already established Band
Class 12, which permits such service, and asserts that any grant in this proceeding should require that AT&T use
only Band 12 authorized equipment. King Street Petition to Condition Grant at 5-6. While RCA requests that the
Commission require interoperability across the entire 700 MHz band, RCA requests that it do so “most immediately
in the lower portion of the band.” Letter from Rebecca M. Thomson, Counsel to RCA, to Marlene Dortch, FCC, WT
Docket Nos. 11-18, 06-150, 11-186; RM-11592; RM-11497, filed Nov. 22, 2011 at 1.
190 Cellular South Petition to Deny at 19; see also Cellular South and King Street May 27, 2011 Ex Parte at 2
(arguing that AT&T should be required to support Band Class 12 wireless devices, not Band Class 17 devices).
191 Free Press Petition to Deny at 5; see also Letter from M. Chris Riley and Matthew F. Wood, Free Press, to
Chairman Julius Genachowski, FCC, WT Docket No. 11-18, RM 11592, filed Dec. 20, 2011 at 1-2 (urging
Commission to require interoperability across the lower 700 MHz spectrum bands).
192 Joint Opposition at 32 (citing Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17529 ¶ 188 and 17534 ¶ 207).
AT&T also points out that the transaction does not involve 700 MHz A Block spectrum. Letter from Jim Bugel,
Assistant Vice President - Public Safety and Homeland Security, AT&T, to Marlene Dortch, FCC, WT Docket No.
11-18, RM 11592, filed Dec. 7, 2011 (AT&T Dec. 7, 2011 Ex Parte) at 1.
193 Joint Opposition at 28, 33.
194 AT&T Dec. 7, 2011 Ex Parte at 1; see also Letter from Joan Marsh, Vice President – Federal Regulatory,
AT&T, to Marlene Dortch, FCC, WT Docket No. 11-18, filed Dec. 9, 2011 at 2-4; Letter from Joan Marsh, Vice
President – Federal Regulatory, AT&T, to Marlene Dortch, FCC, WT Docket No. 11-18, filed Dec. 21, 2011.
195 In adopting a data roaming obligation, the Commission observed that “the availability of data roaming will help
ensure the viability of new wireless data network deployments and thus promote the development of competitive
facilities-based service offerings for the benefit of consumers.” See Data Roaming Order, 26 FCC Rcd at 5412 ¶ 1.
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71. As discussed above, we are adopting roaming conditions as well as technical conditions that
we expect will reduce barriers to device interoperability in the Lower 700 MHz band. 196 We do not
believe, however, that it is appropriate to address as part of this transaction the various interoperability
obligations requested by several parties as possible conditions. Even if we assume that the lack of Lower
700 MHz interoperability causes significant competitive harm, such harm already existed independent of
the license transfer applications before us. We believe the better course would be to consider the
numerous technical issues raised by the lack of interoperability through a rulemaking proceeding, and we
plan to begin such a proceeding in the first quarter of next year.
72. For these reasons, we find that it would not be appropriate in the context of this transaction to
mandate as a condition of the license transfers that AT&T may only use devices that are interoperable
across the lower 700 MHz band.

D.

Spectrum Divestitures

73. DISH asserts that, to enhance competition, the Commission should require AT&T to divest
the E Block licenses in the five metropolitan areas that would be acquired from Qualcomm.197 RTG
contends that the Commission should condition approval of the application on divestiture of any acquired
spectrum in excess of 50 megahertz below 1 GHz.198 Based on our competitive analysis on the national
and local level, as described above, we do not find that spectrum divestiture is necessary to address any
competitive concerns.

E.

Other Issues Raised by Petitioners

74. In addition to the concerns addressed above, several commenters raise other issues for
consideration by the Commission. These commenters propose additional conditions or requests for relief
to address their concerns.
75. Handset exclusivity. Cellular South and RTG ask that the Commission condition any consent
to this transaction on a requirement that AT&T may not enter into any handset exclusivity arrangement
with a wireless device manufacturer.199 RTG argues that handset exclusivity arrangements limit a
consumer’s choice in handsets on the network of their choice and “[t]his one factor alone” is enough to
motivate a consumer to choose a provider such as AT&T over small and rural providers.200 RTG further
argues that exclusive handset arrangements harm the ability of small and rural providers to compete with
AT&T.201 In response, the Applicants contend that these claims are not transaction-specific.202
76. Accelerated performance requirements. To ensure that spectrum is used “intensively” and to
promote the deployment of broadband, particularly in rural areas, RTG asks that the Commission
condition approval of this transaction on AT&T’s compliance with accelerated buildout requirements for


196 See U.S. Cellular Petition for Conditional Grant at 5 (“Consistent power levels and antenna height restrictions
across all of the Lower 700 MHz blocks will reduce the interference impacts to operations on 3GPP Band Class 12
spectrum improving spectral efficiency and expediting use of this band class.”).
197 DISH Petition to Deny at 8-9.
198 RTG Reply at ii, 5.
199 Cellular South Petition to Deny at 5, 19; RTG Comments at i-ii.
200 RTG Petition to Deny at 16.
201 RTG Reply at 3.
202 Joint Opposition at 28-30.
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all of its 700 MHz licenses, including any spectrum acquired from Qualcomm as a result of this
transaction.203 RTG requests that the Commission require AT&T to satisfy geographic-area based
coverage requirements, including interim coverage requirements, consistent with Section 27.14(g) of the
Commission’s rules.204 The Applicants respond that accelerating 700 MHz performance standards would
not address a transaction-specific harm. The Applicants further argue that by requesting that this
condition apply to all 700 MHz spectrum held by AT&T, RTG is attempting to retroactively revise
existing performance standards, which would unlawfully reduce the value of the licenses AT&T obtained
at auction and otherwise undermine the integrity of the Commission’s auction process.205
77. Additional Requests. Free Press requests that the Commission take a variety of additional
measures to remedy the competitive harms it alleges will result from this transaction. In particular, Free
Press requests that the Commission: (1) deny the transaction and reclaim unused Qualcomm spectrum for
unlicensed devices;206 (2) prohibit AT&T from imposing early termination fees that are not directly
traceable to device costs;207 (3) require AT&T to offer special access and other backhaul service to
competitors on reasonable terms and conditions;208 (4) require AT&T to phase out its receipt of Universal
Service Fund high cost support for wireless services, absent submission of a cost analysis;209 and (5)
require AT&T to comply with the rules applicable to fixed broadband providers in the Open Internet
Order and the open access rules governing the 700 MHz Upper C Block spectrum held by Verizon
Wireless.210
78. The Applicants respond by noting that spectrum for unlicensed devices, open Internet access,
special access, universal service fund support, and early termination fees address industry-wide issues, are
not transaction-specific, and are the subject of pending Commission proceedings or investigations.211 In
addition, with respect to repurposing the Qualcomm spectrum for unlicensed devices, the Applicants
argue that such an action is inconsistent with Section 310(d) of the Communications Act, which prohibits
the Commission from considering transferring or assigning the licenses that are the subject of a
transaction “to a person other than the proposed transferee or assignee.”212 The Applicants state that the
Commission may not consider “whether Free Press’s proposal for unlicensed use of the spectrum, or any
other proposal, might better serve the public interest than AT&T’s plan.”213


203 RTG Reply at 18.
204 RTG Reply at 19-20 (citing 47 C.F.R. § 27.14(g)).
205 Joint Opposition at 31 n.112 (citing precedent regarding breach of contract, reasonableness of retroactive rules,
and the existence of a limited property right in an FCC license).
206 Free Press Petition to Deny at 12-16.
207 Free Press Petition to Deny at 5, 18, 21-22.
208 Free Press Petition to Deny at 5, 22.
209 Free Press Petition to Deny at 5, 22-23.
210 Free Press Petition to Deny at 4, 17 (citing Preserving the Open Internet, Broadband Industry Practices, GN
Docket No. 09-191, WC Docket No. 07-52, FCC 10-201 (2010)); 47 C.F.R. § 27.16.
211 Joint Opposition at 24-25, 28-32.
212 Joint Opposition at 22-23 (citing 47 U.S.C. § 310(d)).
213 Joint Opposition at 24.
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79. Discussion. We decline to adopt these additional conditions or grant these requests for relief.
These additional requests are not transaction-specific and do not address the potential harms identified
above. As we have noted in prior proceedings, the Commission generally will not impose conditions to
remedy pre-existing harms or harms that are unrelated to the transaction at issue.214 Further, many of
these additional requests for relief pertain to industry-wide issues that have been raised or addressed in
other, broader contexts, including issues relating to handset exclusivity, Universal Service Fund reform,
spectrum for unlicensed devices, Open Internet and open access, special access, and backhaul.215 We find
these issues are better addressed in the context of these industry-wide proceedings. Similarly, we decline
to reclaim the Qualcomm E Block spectrum and reallocate it for unlicensed use. Whether additional
spectrum is necessary for unlicensed use is a broad policy matter and not transaction-specific.

F.

Motion To Consolidate

80. As discussed above, Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel
have requested that the Commission consolidate this proceeding with its review of other, smaller license
assignment and transfer applications filed by AT&T.216 We note that we have broad discretion as to how
we conduct our proceedings.217 Our review process generally takes into account, as appropriate, the
effects of multiple pending applications, and the Second Joint Motion To Consolidate has not persuaded
us that we should formally consolidate the subject transaction with other pending AT&T transaction
applications. Of course, we have the right in future circumstance to consolidate proposed transaction
applications depending upon the actual facts of the applications. We accordingly deny this motion.

VII.

POTENTIAL PUBLIC INTEREST BENEFITS

81. In addition to assessing the potential competitive harms of the proposed AT&T-Qualcomm
transaction, we also consider whether the proposed assignment of the Qualcomm licenses is likely to


214 See, e.g., Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17463 ¶ 29; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17582 ¶ 22; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21546 ¶ 43.
215 See Wireless Telecommunications Bureau Seeks Comment on Petition for Rulemaking Regarding Exclusivity
Arrangements Between Commercial Wireless Carriers and Handset Manufacturers, Public Notice, 23 FCC Rcd
14873 (2008); High-Cost Universal Service Support, Federal-State Joint Board on Universal Service, Request for
Review of Decision of Universal Service Administrator by Corr Wireless Communications, LLC, WC Docket No.
05-337, CC Docket No. 96-45, Order and Notice of Proposed Rulemaking, 25 FCC Rcd 12854 (2010); Unlicensed
Operation in the TV Broadcast Bands; Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3
GHz Band, ET Docket Nos. 02-380 and 04-186, Second Report and Order and Memorandum Opinion and Order,
23 FCC Rcd 16807 (2008); Preserving the Open Internet, Broadband Industry Practices, GN Docket No. 09-191,
WC Docket No. 07-52, Report and Order, 25 FCC Rcd 17905 (2010); Special Access Rates for Price Cap Local
Exchange Carriers, AT&T Corp. Petition for Rulemaking to Reform of Incumbent Local Exchange Carrier Rates for
Interstate Special Access Services, WC Docket No. 05-25, RM-10593, Order and Notice of Proposed Rulemaking,
20 FCC Rcd 1994 (2005); Amendment of Part 101 of the Commission’s Rules to Facilitate the Use of Microwave
for Wireless Backhaul and Other Uses and to Provide Additional Flexibility to Broadcast Auxiliary Service and
Operational Fixed Microwave Licensees, Petition for Rulemaking Filed by Fixed Wireless Communications
Coalition to Amend Part 101 of the Commission’s Rules to Authorize 60 and 80 MHz Channels in Certain Bands
for Broadband Communications, WT Docket No. 10-153, RM-11602, Report and Order, Further Notice of
Proposed Rulemaking, and Memorandum Opinion and Order
, 26 FCC Rcd 11614 (2011).
216 See ¶ 18 supra; see generally Second Joint Motion To Consolidate.
217 See Section 4(j) of the Communications Act, 47 U.S.C. § 154(j). See also Motor Vehicle Mfrs. Ass'n v. State
Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983); Telecommunications Resellers Association v. FCC, 141 F.3d
1193, 1196 (D.C. Cir. 1998); GTE Service Corp. v. FCC, 782 F.2d 263, 273-74 (D.C. Cir. 1986).
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generate verifiable, transaction-specific public interest benefits.218 In doing so, we ask whether AT&T
would be able, and would be likely, to pursue business strategies resulting in demonstrable and verifiable
benefits to consumers that would not be pursued but for the transaction.219
82. As discussed below, we find that the proposed transaction likely will result in certain
transaction-specific public interest benefits. In particular, we conclude that AT&T’s planned use of
supplemental downlink technology over the spectrum it seeks to acquire from Qualcomm could lead to
public benefits. Indeed, we find that the contemplated supplemental downlink technology that AT&T
proposes to deploy as part of its LTE network should provide benefits to consumers. We also conclude
that the potential harms presented by this transaction are not likely or substantial in light of the conditions
we impose, and thus we can accept a lower showing of benefits to approve the transaction now before us.
We reach this conclusion, however, recognizing that it is difficult for us to precisely quantify either the
magnitude of or the time period in which these benefits will be realized.220

A.

Analytical Framework

83. 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.”221 This
same analysis applies to an acquisition of assets like that contemplated by the proposed transaction before
us. 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.222
84. The Commission applies several criteria in deciding whether a claimed benefit should be
considered and weighed against potential harms. First, the claimed benefit must be transaction-specific.
Second, the claimed benefit must be verifiable. 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.223 In addition, “the magnitude of benefits must be calculated net of the cost of achieving


218 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8736 ¶ 73; AT&T-Centennial Order, 24 FCC Rcd at
13953 ¶ 87; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17495 ¶ 114; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17614 ¶ 113; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21599 ¶ 201.
219 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8736 ¶ 73; AT&T-Centennial Order, 24 FCC Rcd at
13953 ¶ 87; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17495 ¶ 114; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17614 ¶ 113; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21599 ¶ 201.
220 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8736 ¶ 73; AT&T-Centennial Order, 24 FCC Rcd at
13953 ¶ 88; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17495 ¶ 115; Verizon Wireless-RCC Order, 23 FCC
Rcd at 12504 ¶ 92; AT&T-Dobson Order, 22 FCC Rcd at 20330 ¶ 74.
221 E.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8736 ¶ 74; AT&T-Centennial Order, 24 FCC Rcd at 13953 ¶
89; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17495 ¶ 116; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17614 ¶ 115; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21599 ¶ 204.
222 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 74; AT&T-Centennial Order, 24 FCC Rcd at
13953 ¶ 89; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17495 ¶ 116; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17615 ¶ 115; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21599 ¶ 204.
223 See, e.g. AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 75; AT&T-Centennial Order, 24 FCC Rcd at
13953 ¶ 90; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 117; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17615 ¶ 116; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 205.
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them.”224 Furthermore, as the Commission has explained, “benefits that are to occur only in the distant
future may be discounted or dismissed because, among other things, predictions about the more distant
future are inherently more speculative than predictions about events that are expected to occur closer to
the present.”225 Third, the Commission has stated that it “will more likely find marginal cost reductions to
be cognizable than reductions in fixed cost.”226 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.227
85. Finally, the Commission applies a “sliding scale approach” to evaluating benefit claims.228
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.”229 Conversely, where potential harms appear less likely and less substantial,
as is the case here, we will accept a lesser showing to approve the transaction.230

B.

Discussion

86. The Applicants assert that the proposed transaction will result in a number of public interest
and consumer benefits. The Applicants state that the transaction “will further the goals of the national
Broadband Plan and advance the public interest by repurposing underutilized spectrum and enabling
AT&T to provide a more robust wireless broadband service . . . .”231


224 E.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 75; AT&T-Centennial Order, 24 FCC Rcd at 13954 ¶
90; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 117; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17615 ¶ 116; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 205.
225 E.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 75; AT&T-Centennial Order, 24 FCC Rcd at 13954 ¶
90; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 117; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17615 ¶ 116; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 205.
226 E.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 75; AT&T-Centennial Order, 24 FCC Rcd at 13954 ¶
90; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 117; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17615-16 ¶ 116; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 205.
227 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 75; AT&T-Centennial Order, 24 FCC Rcd at
13954 ¶ 90; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 117; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17616 ¶ 116; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 206.
228 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 76; AT&T-Centennial Order, 24 FCC Rcd at
13954 ¶ 91; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 118; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17616 ¶ 117; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 206.
229 E.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 76; AT&T-Centennial Order, 24 FCC Rcd at 13954 ¶
91; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17496 ¶ 118; Sprint Nextel-Clearwire Order, 23 FCC Rcd at
17616 ¶ 117; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21600 ¶ 206. Cf. 2010 DOJ/FTC Merger Guidelines
at § 4 (“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.”).
230 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8737 ¶ 76; AT&T-Centennial Order, 24 FCC Rcd at
13954 ¶ 91; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17497 ¶ 118; Sprint Nextel-Clearwire Order, 23 FCC
Rcd at 17616 ¶ 117.
231 Application, Public Interest Statement at 4.
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87. Furthering National Broadband Plan Objectives. Qualcomm used its Lower 700 MHz D and
E Block licenses for its FLO TV service, which it offered on a wholesale basis through distribution
relationships with AT&T and Verizon Wireless, and on a retail basis through its own FLO TV Personal
Television mobile device and a FLO Enabled Auto device and Personal DVD player.232 However, neither
the wholesale nor the retail method was economically successful.233 Recognizing the limitations of this
unpaired spectrum, Qualcomm reached the agreement to sell it to AT&T.234
88. The Applicants state that AT&T plans to deploy the acquired spectrum as supplemental
downlink on its nationwide LTE network using carrier aggregation technology.235 The expected LTE
Advanced standard releases will, according to the Applicants, permit this previously-unpaired spectrum to
bond with other AT&T spectrum used to deploy mobile broadband services over its LTE network.236 The
Applicants state that the repurposing of underutilized spectrum will assist in furthering the objectives of
the National Broadband Plan of putting spectrum to its most valuable and efficient use and unlocking the
full potential of 4G.237 Indeed, the promised ability of customers to download data more quickly upon
deployment of the supplemental downlink technology appears to sit squarely within the objectives of the
National Broadband Plan.
89. In its petition, RCA claims that the transaction would not assist AT&T in addressing the
increasing demand for wireless broadband services but would instead result in warehousing of the
acquired spectrum, considering that AT&T acquired AWS spectrum in 2006 but has yet to deploy
commercial operations in this band.238 The Applicants respond that they intend to deploy the Qualcomm
spectrum promptly after the technical standards and equipment are in place, as early as 2014.239 The
Applicants also explain that AT&T is not warehousing its AWS and 700 MHz spectrum and fully intends
to utilize such spectrum in the LTE network that is set to be rolled out this year and largely completed by
2013.240 We find unpersuasive RCA’s arguments that we should either deny or place conditions on this
transaction based on a concern that this spectrum will not be used by AT&T to provide wireless
broadband services but instead “would be shelved.” The Applicants have set forth a concrete plan for
AT&T’s usage of the Qualcomm spectrum to support and enhance its ability to provide mobile broadband
services over its LTE network, commencing as early as 2014.241 Moreover, we note that AT&T this fall
has begun to roll out LTE service, consistent with its earlier representations in this record.242


232 Application, Public Interest Statement at 6.
233 Application, Public Interest Statement at 6.
234 Application, Public Interest Statement at 7.
235 Application, Public Interest Statement at 7.
236 Application, Public Interest Statement at 7.
237 Application, Public Interest Statement at 4-5.
238 RCA Petition at 7. See also RTG Petition at 24.
239 Joint Opposition at 27.
240 Joint Opposition at 27.
241 Application, Public Interest Statement at 7-8. See also AT&T December 9, 2011 Letter at 2 ("AT&T expects
customers to be able to utilize handsets and other equipment incorporating the spectrum as early as late 2014.").
242 See Application, Public Interest Statement at 13; Joint Opposition at 27. See also AT&T Network News, AT&T
Launches 4G LTE in Six Additional Markets, November 21, 2011, http://www.att.com/gen/press-room?pid=2943
(last visited Dec. 21, 2011) (noting that the addition of these new markets expands AT&T's 4G LTE coverage to 15
(continued….)
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90. Addressing Growing Demand for Wireless Broadband Services. The Applicants assert that
the rapid spread of wireless broadband devices and the growing demand for bandwidth-intensive
applications and services require additional spectrum.243 They point out that this growing consumer
demand will need to be addressed by carriers obtaining additional spectrum.244 The Applicants state that
AT&T is in the forefront of handling rapidly growing consumer demand, manifested by a 3,000 percent
increase in mobile broadband use from the third quarter of 2007 to the third quarter of 2010, and a 15.3
percent increase in the number of AT&T’s postpaid subscribers with an integrated device from the third
quarter of 2009 to the third quarter of 2010.245 The Applicants also state that, as of the time they filed the
Application, AT&T had plans to launch two 4G tablets, including its first LTE table, by mid-summer
2011, and additional LTE tablets in the second half of 2011.246 They claim that AT&T has more
smartphone users than any other carrier, and its customers use more spectrum-intensive data services,
which also adds to the growing demand for additional spectrum.247 The Applicants explain how
deployment by AT&T of the supplemental downlink technology on the Qualcomm spectrum will help to
meet growing customer demand.
91. LTE Deployment. The Applicants state that AT&T plans to use its 700 MHz and AWS
spectrum for LTE deployment, which is planned to be completed by the end of 2013.248 They explain that
because the 700 MHz spectrum to be acquired from Qualcomm is unpaired and must be bonded with
blocks of existing spectrum to be used for LTE service, it can be used only to augment downlink capacity
in areas where AT&T already has spectrum.249 They claim that, considering the exponential demand on
AT&T’s network, AT&T needs additional spectrum to just to keep pace with the growing consumer
demand and new technologies and applications requiring more spectrum.250 The Applicants state that
AT&T currently has a nationwide average of only 27.1 MHz of 700 MHz and AWS spectrum, and in
some areas of the country it holds neither spectrum.251
92. The Applicants claim that the addition of Qualcomm’s 6 MHz of Lower 700 MHz D Block
spectrum nationwide will enable AT&T to have spectrum holdings throughout the United States and its
territories.252 The addition of Qualcomm’s E Block will give AT&T a total of 12 more MHz capacity in
the particularly high demand economic areas of New York, Los Angeles, San Francisco, Boston, and
(Continued from previous page)


markets nationwide).
243 Application, Public Interest Statement at 8.
244 Application, Public Interest Statement at 8-10.
245 Application, Public Interest Statement at 10-11.
246 Application, Public Interest Statement at 11. They also state that AT&T recently announced a new division
geared toward health information technology, and is pioneering the wireless connection of mobile health care
devices. Id.
247 Application, Public Interest Statement at 12-13.
248 Application, Public Interest Statement at 13. In areas where AT&T does not hold 700 MHz or AWS spectrum, it
may use cellular or PCS spectrum. Id. at 15. AT&T states that it already has spectrum for its planned LTE
deployment, and this transaction will not affect its footprint. AT&T Complete Response of June 10, 2011 at 9, 13.
249 AT&T Complete Response of June 10, 2011 at 9.
250 Application, Public Interest Statement at 13.
251 Application, Public Interest Statement at 13.
252 Application, Public Interest Statement at 14.
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Philadelphia.253 Using supplemental downlink technology, AT&T plans to combine Qualcomm’s
unpaired 700 MHz spectrum with AT&T’s paired spectrum to form a single wider channel.254 This will
provide additional downlink capacity to address the asymmetry of data flow caused by wireless
broadband users consuming more video and other data-heavy media content with one-sided data flow.255
The Applicants state that AT&T plans to incorporate handsets and new technology that can utilize
supplemental downlink into its network as they become available, expecting customers to be able to use
such handsets as early as 2014.256
93. Faster Speeds and Better Service for Consumers. The Applicants assert that as a result of the
transaction and AT&T’s deployment of supplemental downlink technology, customers will be able to
experience a faster and better service over AT&T’s LTE network, and AT&T will be able to
accommodate a far large number of customers utilizing mobile network services.257 In areas where
Qualcomm holds both D and E Blocks, AT&T, as a result of the transaction, will be able to expand its
LTE downlink capacity by an additional 10 MHz, using 2 MHz as a guardband.258 In the areas with only
D Block spectrum, AT&T will be able to use as much as 5 MHz to expand LTE downlink capacity, using
1 MHz as a guardband.259 The Applicants state that such expansion will result in a better customer
experience, in some cases a doubling of peak speed, when downlink capacity is doubled from 10 MHz to
20 MHz.260 The record suggests that customers will experience this benefit as faster and more consistent
download time, a more seamless video or gaming experience, and better resolution, particularly during
periods of peak use.261

C.

Conclusion

94. We conclude, based on the record before us and as discussed above, that this transaction –
with AT&T’s plans to deploy supplemental downlink technology – holds the promise of meaningful
transaction-specific public interest benefits that support the Commission approving the proposed
transaction. In particular, we anticipate that the proposed transaction would facilitate the transition of
underutilized unpaired 700 MHz spectrum towards mobile broadband use, thereby supporting our goal of
expanding mobile broadband deployment throughout the country.


253 Application, Public Interest Statement at 14.
254 Application, Public Interest Statement at 14. AT&T plans initially to bond Qualcomm’s spectrum with its
existing 1900 MHz spectrum since that spectrum would be more widely available throughout the LTE network
footprint. AT&T Complete Response of June 10, 2011 at 35.
255 Application, Public Interest Statement at 14; AT&T Complete Response of June 10, 2011 at 15-16, 20.
256 Application, Public Interest Statement at 16; AT&T Complete Response of June 10, 2011 at 36. See also AT&T
December 9, 2011 Letter at 2.
257 Application, Public Interest Statement at 16.
258 Application, Public Interest Statement at 16.
259 Application, Public Interest Statement at 16.
260 Application, Public Interest Statement at 15, 16; Joint Opposition at 3.
261 Application, Public Interest Statement at 16-17; AT&T Complete Response of June 10, 2011 at 16.
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VIII.

CONCLUSION

95. We find that AT&T’s proposed acquisition of Qualcomm’s Lower 700 MHz D and E Block
licenses raises some competitive concerns based on AT&T’s post-transaction spectrum holdings. We
further find, however, that these competitive concerns are mitigated by requiring AT&T to comply with
four conditions post-transaction as described above. Given the imposition of these conditions, we find
that the proposed transaction would not result in competitive harm that would outweigh the public interest
benefits of this transaction. In particular, we anticipate that the proposed transaction would facilitate the
transition of underutilized unpaired 700 MHz spectrum towards mobile broadband use, thereby
supporting our goal of expanding mobile broadband deployment throughout the country. Accordingly,
we conclude that consent to the proposed transaction, subject to the conditions enumerated above, would
serve the public interest.

IX.

ORDERING CLAUSES

96. Accordingly, having reviewed the application, the petitions, and the record in this matter, IT
IS ORDERED that, pursuant to Sections 4(i) and (j), 309, and 310(d) of the Communications Act of
1934, as amended, the application for the assignment of Lower 700 MHz band license from Qualcomm
Incorporated to AT&T Mobility Spectrum LLC is GRANTED, to the extent specified in this
Memorandum Opinion and Order and subject to the conditions specified herein.
97. 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, 310(d), the
petitions to deny the assignment of licenses from Qualcomm Incorporated to AT&T Mobility Spectrum
LLC are DENIED IN PART and GRANTED IN PART for the reasons stated herein.
98. IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and (j), 309, and 310(d) of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), (j), 309, 310(d), the Second Motion To
Consolidate filed by Cincinnati Bell, MetroPCS, NTELOS, RCA, RTG, and Sprint Nextel is DENIED for
the reasons stated herein.
99. IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and (j), 309, and 310(d) of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), (j), 309, 310(d), the Motion for Leave To
Withdraw Motion To Hold In Abeyance filed by RTG is GRANTED for the reasons stated herein.
100.
IT IS FURTHER ORDERED that this Memorandum Opinion and Order SHALL BE
EFFECTIVE upon adoption. 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 public notice of this Memorandum
Opinion and Order.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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DISSENTING STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

Re:
In the Matter of Application of AT&T Inc. and Qualcomm Incorporated for Consent to Assign
Licenses and Authorizations
, WT Docket No. 11-18.
Even assuming that what we’ve been told about the Qualcomm spectrum is correct - that its
unpaired spectrum might go unused but for this transaction - there is no dispute that it will concentrate
even more highly-valuable 700MHz spectrum in the hands of one of the two dominant wireless carriers. I
could be persuaded, with the right set of pro-consumer conditions, to concur in the transaction. While
much of the competitive analysis in today’s order is strong, the conditions the Commission does attach
strike me as falling short of advancing the public interest demand.

I am pleased with the rigor of the spectrum analysis. As we have noted in recent wireless
competition reports, lower band spectrum can provide superior coverage over larger geographic areas and
is less costly to deploy. It is a step in the right direction that this order recognizes the unique, positive
attributes of spectrum below 1GHz, but the analysis actually leads me to some worrying conclusions:
AT&T’s acquisition of the Qualcomm spectrum would give the company more than one-third of below-
1GHz spectrum nationwide measured on a MHz*POPs basis. Using that same metric, AT&T and
Verizon Wireless combined would nationwide hold approximately 73 percent of below 1GHz spectrum.
By any reasonable spectrum screen or other spectrum holdings analysis, this level of concentration should
give us pause. So today’s action highlights the significance of concentrating additional 700MHz spectrum
in the hands of AT&T as a result of the transfer of Qualcomm’s licenses. Yet it falls short in identifying
and imposing conditions that would tip the deal in favor of the public interest, and it moves us farther
down the road toward a wireless duopoly. As a result, I must respectfully dissent.
The Commission imposes two conditions here - one related to data roaming and one to
interference. These conditions will benefit competition, to be sure, but they fall short of what I believe
the Act requires. Our charge under the Act is to ask not just whether the transaction would reduce
competition; we must also ask whether the transaction will enhance competition. The instant conditions
do not address the critical competitive concern expressed by commenters in this proceeding.
A meaningful condition requiring AT&T to make its devices interoperable could allow other
Lower 700MHz providers a better opportunity to compete for customers and to bring greater price and
service competition to consumers. On top of that, interoperability would help consumers more fully
realize the benefits of the data roaming requirements the Commission adopted earlier this year. As was
said at the Commission’s interoperability workshop earlier this year, “interoperability can play an
important role by helping lower costs through economies of scale . . . which increases competition and
allows consumers to stay connected. Demand for mobile broadband continues to increase sharply and
continuing the most productive use of the 700MHz band will be critical to reaching that demand.” I
would also emphasize that this spectrum, using what we are told is soon-to-be developed technology, will
be able to supplement other spectrum, leading to improved performance for AT&T. So the claim that this
spectrum would go unused but for this proposed transaction is not entirely convincing.
Despite evidence of, and support for, the need for an interoperability condition in the record—and
efforts to develop such a condition—today’s 100 paragraph item devotes just two sentences to justifying
why such a condition is inappropriate. That justification is not consistent with conditions the
Commission has imposed on previous acquisitions. The Commission declines to adopt an interoperability
condition because “Even if we assume that the lack of Lower 700MHz interoperability causes significant
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FCC 11-188

competitive harm, such harm already existed independent of the license transfer applications before us.”
Such a standard would drastically limit the Commission’s ability to impose conditions, as many of the
conditions we have attached to past transactions necessarily address issues that cut across the industry,
such as the inefficient growth of the High Cost program and broadband deployment. Those conditions
addressed harms that clearly existed whether or not we approved the mergers at issue. The inefficient
growth of the High Cost program was an issue irrespective of the Verizon-AllTel merger. Broadband
deployment was (and still is) an issue irrespective of the Comcast-NBCU merger. The Commission
adopted conditions to address these industry-wide problems over objections that they were not “merger
specific” and when there were ongoing rulemakings on the same issues. How can we then say that
interoperability is somehow less merger specific?
The real issue in this and other acquisitions is not whether the harm we seek to address is limited
to the immediate transaction, but whether the acquisition would make the problem worse. The answer
here is yes, it would. By controlling more 700MHz spectrum, AT&T no doubt will have even more
device buying power and with that power comes increased ability to prevent interoperability in this
critical spectrum. This license transfer takes a pre-existing competitive problem—the lack of
interoperability in the Lower 700MHz—and aggravates it by giving one of the two dominant carriers
enhanced ability to ensure that interoperability doesn't happen without a regulatory requirement. I am
encouraged there will be a rulemaking on interoperability, but such proceedings take precious time. Even
assuming the Commission can propose rules early next year, we would be unlikely to see the benefits of
such rules for quite a while after that.
Our ability to impose pro-consumer conditions on transaction is one of the most powerful tools in
our regulatory toolbox. We should not abuse that power, but neither should we shy away from using it
when the public interest demands it.
I thank the Chairman and my fellow Commissioners for their engagement on this transaction.
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CONCURRING STATEMENT OF

COMMISSIONER MIGNON L. CLYBURN

Re:
In the Matter of Application of AT&T Inc. and Qualcomm Incorporated for Consent to Assign
Licenses and Authorizations, WT Docket No. 11-18.

I concur with today’s decision to grant the applications to transfer Qualcomm’s licenses and
authorizations in the D and E Blocks of the lower 700 MHz band to AT&T.
A number of parties, including consumer advocates and holders of licenses in the A Block of the
lower 700 MHz band, have made persuasive arguments in opposition to this transaction. They contend, if
the Commission decides to approve the applications, that we should adopt an interoperability condition
that would require any AT&T device operating on paired spectrum in the lower 700 MHz band, to operate
on all paired spectrum in that part of the band. This would mean that AT&T would have to migrate from
Band Class 17 devices, which only permit access to B Block and C Block licenses in the lower 700 MHz
band, to Band Class 12 devices, which permit access to A, B, and C Block licenses in this band. The A
Block licensees assert that the decision to split the lower 700 MHz in to Band Class 12 and Band Class
17, occurred after they acquired their A Block spectrum in Auction No. 73 in 2008. The A Block
licensees also maintain that, as a result of this decision, the lower 700 MHz band now enjoys the
distinction of being the only historical mobile wireless band in the United States without a unified band
plan. They argue that unified band plans are necessary to promote network deployment, industry growth,
and consumer choice because, without a common band plan, voice and data roaming is not possible.
They also argue that the lack of interoperability in the lower 700 MHz band impedes voice and data
roaming, and some of these parties were willing to accept a condition that would require device
interoperability to be implemented by the beginning of 2013.
For me, the lack of interoperability in the 700 MHz band was the most challenging issue in this
proceeding. I am very concerned that the 700 MHz band, which holds so much promise because of its
excellent propagation characteristics, has become the only mobile wireless band without a unified band
plan. We have to make progress on this issue to fully deliver on the promise of mobile broadband for all
Americans. I agree with most of these arguments from the A Block licensees and the Order actually
credits many of their issues. In fact, after finding that this transaction results in spectrum concentration
that raises the potential for competitive harm, the Order finds it necessary to adopt a “more circumscribed
condition to ensure that AT&T does not use the Qualcomm spectrum in a way that deprives other
providers of the benefits of the Commission’s roaming rules.” The Order also states “that the lack of
interoperability in the 700 MHz band raises important public interest concerns.” In my opinion, this is an
understatement. Without true interoperability, consumers will not likely see the true potential that the
excellent propagation characteristics of the 700 MHz band could offer. Lack of interoperability means
fewer competitive options for service providers offering 700 MHz devices and services. That, in turn,
means higher prices and fewer product choices for consumers.
For these reasons, I would have preferred that the Order found that the lack of interoperability is a
merger specific issue that should be remedied by an interoperability condition similar to the one that the
A Block licensees and other parties requested. But today, the policy priority for me is the most efficient
path possible for interoperability in the lower 700 MHz band. In order to accomplish this, compromise
among all stakeholders will be necessary. I am heartened that Chairman Genachowski has agreed to
expeditiously conduct an interoperability proceeding next year, and I thank him for this commitment.
Although AT&T opposes addressing interoperability standards in this proceeding, it has voluntarily
committed to not oppose its migration to Band Class 12 if the FCC appropriately resolves interference
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issues with Channel 51 and the E Block. I understand the advocates for interoperability across the lower
700 MHz band would have preferred the Commission go further. However, since the commitments I
discussed are positive developments towards interoperability, which likely would not have occurred
without this proceeding, I concur with today’s Order.
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