The FCC said it will consider AT&T's (NYS: T) proposed $1.93 billion purchase of Qualcomm's (NAS: QCOM) 700 MHz MediaFLO spectrum side-by-side with AT&T's planned $39 billion acquisition of T-Mobile USA.
While the FCC is not formally combining the reviews of the two acquisitions, the move is a setback for AT&T and Qualcomm, which have argued that the two deals should be evaluated independent of one another. "The commission's ongoing review has confirmed that the proposed transactions raise a number of related issues, including, but not limited to, questions regarding AT&T's aggregation of spectrum throughout the nation, particularly in overlapping areas," the commission said in a letter signed by Wireless Telecommunications Bureau Chief Rick Kaplan.
The FCC said it will halt its informal 180-day "shot-clock" on the AT&T/Qualcomm deal and consider the deals in a "coordinated manner." The action leaves open the possibility that the FCC would review them independently later on.
The move is a win for the likes of Cincinnati Bell Wireless, MetroPCS (NYS: PCS) , Ntelos, Sprint Nextel (NYS: S) , the Rural Cellular Association and the Rural Telecommunications Group, which earlier this spring asked the FCC to combine the proceedings.
"We believe the Qualcomm transaction stands on its own merits," an AT&T spokesman told FierceWireless. "We are pleased that the commission has rejected calls to officially consolidate the two deals and has expressly preserved the ability for the Qualcomm application to be resolved in advance of the T-Mobile application. We remain confident that the FCC will approve the license transfers as consistent with the public interest."
Similarly, in a statement, Dean Brenner, Qualcomm's vice president of government affairs, said that the deal should be approved "because of the clear benefits to the public from the sale that stand on their own and are totally unrelated to the proposed AT&T-T-Mobile merger." He cited the re-purposing of unused 700 MHz unpaired spectrum for mobile broadband as well as the fact that the deal will allow Qualcomm to invest in a new, spectrally efficient technology, supplemental downlink.
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