This article has been updated with comment from AT&T.
AT&T’s bid to buy two more licenses in the valuable 700 MHz block has sparked protest from the Rural Cellular Association (RCA) and Cellular South, which say the deals will perpetuate the consolidation of spectrum with a small number of competitors.
According to documents filed yesterday afternoon with the FCC, AT&T wants to buy a lower 700 MHz B Block license from Knology covering Lawrence, Kan., and a lower 700 MHz C Block license from 700 MHz, LLC in an area of Worcester, Mass. Financial terms of the deal were not disclosed.
The two additional 700 MHz licenses would provide more bandwidth for AT&T’s LTE deployment in the areas. If the FCC approves the purchases, AT&T will hold 55 megahertz of spectrum below 1 GHz in the Kansas market and 61 megahertz of spectrum below 1 GHz in the Massachusetts market.
The RCA called AT&T’s attempt to purchase more licenses in the 700 MHz band “very concerning” for the company’s smaller competitors.
“Further consolidation in the wireless industry will harm competition and innovation,” the RCA said in response to AT&T’s latest spectrum deal. “Allowing AT&T to increase its market dominance will only further promote the emergence of an industry duopoly.”
Cellular South, whose CEO Hu Meena serves as chairman of the RCA’s board, also expressed concern over AT&T’s acquisition of additional 700 MHz spectrum.
“This is simply another example of low-band spectrum being concentrated in the hands of the duopoly,” said Eric Graham, head of government relations at Cellular South. “Given AT&T’s attempt to obtain an even more dominant position in 700 MHz with their planned purchase of Qualcomm’s 700 MHz spectrum and with the threat of AT&T potentially acquiring T-Mobile, the FCC can no longer view license purchases like this as routine transactions.”
AT&T defended the deals.
“In these two extremely small deals, AT&T is buying 700 MHz spectrum in one county in Massachusetts and one county in Kansas. The spectrum is currently un-deployed and lying fallow,” the company said. “AT&T will use these small purchases to supplement our LTE build in these limited areas.”
Spectrum in the 700 MHz band is particularly valuable to wireless operators because its propagation characteristics make it well-suited to next-generation mobile broadband services. Both Verizon and AT&T own large swaths of the 700 MHz band which they are using for their respective LTE deployments.
AT&T is working to increase its formidable 700 MHz holdings. The company spent $2.5 billion on 700 MHz spectrum from Aloha Partners in 2008. In December of last year, AT&T announced it was buying the 700 MHz spectrum used for Qualcomm’s now-defunct mobile television service, Flo TV, for $1.93 billion. The FCC has not yet approved AT&T’s acquisition of the Flo TV spectrum, which will be used to provide additional downlink capacity in AT&T’s LTE network.
Several of AT&T’s smaller competitors have opposed the company’s purchase of the Flo TV spectrum and want the FCC to combine its review of the deal with AT&T’s proposed acquisition of T-Mobile USA.