Commission Votes 4 to 1 to Approve AT&T Purchase of Aloha
The FCC approved AT&T’s purchase of lower band 700 MHz spectrum from Aloha Partners for $2.5 billion late Friday. However, FCC Commissioner Michael Copps voted against it and Commissioner Jonathan Adelstein issued a concurring vote that outlined concerns he had.
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Copps and Adelstein had concerns that the analysis of the deal completed by the Wireless Bureau was inadequate. Martin had hoped for a vote before the auction began Thursday to provide clarity for AT&T and Aloha, which both could be major players as the spectrum sale unfolds, industry and regulatory sources said.
AT&T is considered one of the most likely bidders for the massive C-block licenses or the national D-block public safety license. Aloha CEO Charles Townsend is expected to bid in the auction through Bluewater Wireless, a bidder with venture capital funding.
The amount of spectrum that would be transferred -- 12 MHz or one fifth the amount of spectrum for sale in the 700 MHz auction -- raised red flags for at least one commissioner, sources said. A second concern is a finding in the order that the deal gives AT&T more than 95 MHz of spectrum in 11 cellular market areas (CMAs), which is higher than the agency’s soft cap for spectrum approved as part of the AT&T-Dobson merger last November. Copps and Adelstein objected when the commission raised from 70 to 95 MHz the amount of spectrum a company can have in a market without triggering more detailed FCC review.
The approval was completed much quicker than AT&T and Aloha originally predicted. When they announced the agreement in mid-October, the companies predicted it would be completed in six to nine months.
Meanwhile, the Wireless Bureau delayed without explanation the fifth round of bidding in the 700 MHz auction Friday. It ended bidding early, at 2 p.m. The FCC has delayed bidding rounds in previous auctions because of software glitches and concerns about collusion.
After the first four rounds, auction participants had made $3.7 billion in provisional winning bids. Bidders were still well short of the high reserve prices set by the FCC and of the $13.8 billion bid in 2006’s advanced wireless services auction. That auction lasted 161 rounds over 29 days.
No new bids were entered for the public safety D- block, the much watched 10 MHz nationwide license. “We caution against reading too much into this, as a bidder with sufficient remaining eligibility could still move in, but we see the prospects of the D-block meeting its reserve as declining,” Stifel Nicolaus said in a research report. There seem to be two active bidders for the massive C-block regional licenses, it said. But “the hot activity continues to be on the small B-block licenses, with the licenses for Los Angeles, Phoenix, Atlanta, Madison, San Diego, Dallas, and New York City being the most hotly contested.”
On another 700 MHz note, the Public Safety Spectrum Trust Corporation (PSST), selected by the FCC as the public safety broadband licensee, said a number of unspecified news accounts in recent days about the future of the D-block are false or misleading and could influence bidder behavior. But the PSST has been unable to dispute them because it’s bound by FCC anti-collusion rules, PSST Chairman Harlin McEwen said in a written statement Friday.
“In a matter of such importance not only to the PSST but also to the country, it is natural to identify false statements or misleading impressions and to do so promptly and publicly,” McEwen said. “That is not possible in this case because of our adherence to the anti-collusion rules. But count on this -- as soon as that prohibition is lifted we will identify false statements and we will correct the misleading impressions.”