FCC approves AT&T Mobility/Dobson deal

The Federal Communications Commission approved AT&T’s Mobility’s $2.8 billion purchase of Dobson Communications Corp., embracing less stringent divestiture requirements than those imposed by Justice Department and the same universal service wireless-cap condition federal regulators worked into the $27.5 billion acquisition of Alltel Corp. by two private-equity firms.
AT&T Mobility, the largest U.S. mobile phone carrier, is now clear to pick up many of Dobson’s 1.6 million subscribers in rural markets throughout the country. However, as a result of government conditions on the deal, AT&T Mobility will have to sell wireless assets in a handful of rural markets and forgo rights to the Cellular One brand in two markets in Pennsylvania and Texas. AT&T Mobility is also subject to a an interim cap on universal service rural wireless support, a controversial condition overlayed on the Alltel-private equity transaction that can be waived if certain universal service reporting and enhanced 911 requirements are met.
Commissioners Michael Copps (D), Robert McDowell (R) and Jonathan Adelstein (D) criticized aspects of the antitrust analysis and the universal service limits attached to the AT&T Mobility-Dobson deal. The FCC is in the midst of settling on universal service reforms.
“In this specific transaction, the order allows an independent wireless company largely focused on serving rural America to be acquired by one of the two leading wireless companies-companies that are owned in whole or in part by the leading wireline telephone companies,” Copps stated. “In terms of intermodal competition, the order is silent, despite the reality that a parent company may be more than a little reluctant to employ its spectrum holdings to put competitive pressure on-or cannibalize existing revenue from-its wireline offerings. In terms of intramodal competition, I fear this concentration could have important effects on the availability of roaming services and the choices consumers have.”
Copps, who dissented in part to the ruling, said he was very close to objecting to the entire decision.
“Once again, the commission raises more questions than it answers, and appears to bind future commission action, and dictate or bind government policy,” said McDowell. “I am concerned that we are regulating unnecessarily without thinking through possible unintended consequences. This is especially unfortunate given the critical need for market certainty as we approach the 700 MHz auction.”