AT&T Buy of Centennial Continuing to Spark Industry Concerns

AT&T and Centennial said the merger will help Centennial’s customers “who are primarily located in rural areas and small cities” and “will enjoy the full range of capabilities available on AT&T’s network.” They said the FCC should compare these benefits to the scant opposition. “The Petitioners and Commenters have ignored the clear public benefits of the merger and instead have raised issues -- such as roaming, handset exclusivity, and spectrum caps -- that are unrelated to this merger and concern the wireless industry generally,” they said. “This transaction, which involves less than one half of one percent of the country’s wireless subscribers, is not the appropriate forum in which to consider imposing on AT&T a range of conditions that should apply, if at all, to all wireless carriers and would clearly amount to fundamental regulatory changes.”

Sprint Nextel accused AT&T of refusing to address its questions about plans to convert Centennial’s CDMA customers in Puerto Rico and the U.S. Virgin Islands to AT&T’s GSM network and close down the CDMA network there. Sprint, a CDMA carrier, said AT&T should have to answer questions about whether it will maintain roaming contracts with Centennial. “AT&T’s Opposition, like its Application, does not address any of these matters,” Sprint said. “Attempting to deflect from its decision not to submit any record evidence on this important matter, AT&T instead accuses Sprint of making points that are ‘meritless and self-serving.'”

Sprint noted that expanding its network to cover markets now under the roaming contracts is a lengthy process since “it often takes 18 months (or longer) to locate a single potential cell site location and secure the necessary local governmental approvals, much less address coverage for all Centennial areas.” Sprint pointed out that when Verizon Wireless bought Rural Cellular, it agreed to maintain its roaming contracts for four years: “AT&T here has made no commitment to maintain Centennial’s CDMA network for any period.”

Cincinnati Bell Wireless said AT&T and Centennial have failed to refute its claims that the merger would be harmful to wireless competition. Its objections are not general, but specific to this merger, the carrier said. “Cincinnati Bell showed that AT&T has a history of engaging in anticompetitive behavior in the wholesale roaming market and that the acquisition of Centennial by AT&T would perpetuate and exacerbate AT&T’s ability to engage in this behavior,” the carrier said. “The harm shown by Cincinnati Bell is transaction-specific because Centennial serves as virtually the last competitive check on AT&T’s behavior and because the merger would allow AT&T to extend its behavior to Centennial’s territory and relationships.”

Cellular South raised particular objections that the merger would give AT&T control of cellular Block A spectrum in the Claiborne, Miss., Rural Service Area. That would violate the terms of a 1989 settlement agreement between AT&T predecessor BellSouth Mobility and Cellular Holding, now called Cellular South. “AT&T attempts to brush the matter aside as a ’solely private contractual’ dispute which, allegedly as a matter of ‘longstanding Commission policy,’ is not within the scope of this proceeding,” the carrier said. “AT&T’s attempt to obtain the Commission’s approval to violate the agreement under which it became a licensee in Mississippi 8 is unprecedented, highly relevant, and a matter solely within the Commission’s primary jurisdiction.”