WASHINGTON—AT&T Inc. and BellSouth Corp. urged the Federal Communications Commission not to give in to congressional pressure by requiring them to divest their 2.3 GHz and 2.5 GHz wireless broadband assets as a condition of approving AT&T’s proposed $67 billion acquisition of BellSouth.
“[A] divestiture would disrupt the ongoing efforts of AT&T and BellSouth to utilize wireless broadband spectrum to bring innovative and beneficial broadband services to consumers, especially in rural and underserved areas, such as Alaska,” the two telecom giants told the FCC in an Oct. 2 letter.
AT&T and BellSouth said a merger would not prompt them to “warehouse” wireless broadband spectrum, as some parties have warned. The firms said there is virtually no overlap in AT&T’s and BellSouth’s 2.3 GHz and 2.5 GHz holdings. Moreover, they argued, Sprint Nextel Corp. holds far more wireless broadband spectrum in markets across the country.
Last week, Sen. Mike DeWine (R-Ohio), chairman of the Senate Judiciary antitrust subcommittee, and Sen. Herb Kohl (D-Wis.) argued that a combined carrier would have little incentive to allocate its 2.3 GHz and 2.5 GHz spectrum to WiMAX because doing so likely would cannibalize its current customer base.
Consumer groups and some wireless carriers have flagged the wireless broadband issue in the FCC’s review of the proposed AT&T-BellSouth deal and have also raised concerns about the two companies’ control of special-access lines.
Martin, according sources and press reports, wants to approve the AT&T-BellSouth deal next week without attaching any conditions. But it is unclear whether he has the votes for such an action. The Justice Department is expected to rule soon on the proposed transaction.
