The New York State Public Service Commission has warned the FCC that AT&T’s takeover of T-Mobile USA will have “significant anticompetitive impacts” in the state, but stopped short of asking the regulator to block the deal.
In a confidential document made public Friday, the commission stated that under the FCC’s own screening process for mergers, AT&T’s buyout of T-Mobile would significantly decrease competition in the wireless market, particularly in New York City and the surrounding metropolitan area.
“Applying the FCC’s initial screens to this proposed merger indicates it will have significant anticompetitive impacts that will be felt, in particular, in New York State,” Peter McGowan, general counsel of the New York State Public Service Commission , wrote in a petition to the FCC. “In view of this, the FCC should not approve this transaction without subjecting it to heightened scrutiny and performing a rigorous, market-specific review of its impacts on New York State’s wireless voice and broadband markets.”
The commission’s petition to deny was first filed with the FCC on May 31, but its contents were not disclosed to the public. A redacted version of the petition was posted on Friday at the request of Kathy Harris, the deputy chief at the mobility division of the FCC’s Wireless Telecommunications Bureau.
The New York State Public Service Commission warned the FCC that AT&T’s merger with T-Mobile “will lead to potentially anticompetitive spectrum aggregation in a number of markets in New York State.”
The commission drew its conclusions after conducting an analysis that applied the FCC’s own screening process to the deal. The FCC’s spectrum screen provides a guide to how much bandwidth can be held by a single operator before the consolidation of spectrum becomes anticompetitive. The screen varies market by market, depending on how much spectrum is available to wireless operators.
In areas like New York state, where both AWS and broadband radio service spectrum are available, the FCC uses a screen of 145 MHz to determine whether a deal will be anticompetitive.
New York’s Public Service Commission estimates that the combined spectrum holdings of AT&T and T-Mobile will exceed the 145 MHz threshold in 16 of the state’s 62 counties. Nationwide, the merged company will meet or exceed the FCC’s spectrum screen in 408 of 3,072 counties, according to the state commission’s estimates.
“It is critically important that New York State consumers be protected against potential harm caused by further consolidation in wireless voice and broadband markets,” McGowan wrote, saying the anticompetitive impact of the merger would be “felt disproportionately” in New York. “The New York State Public Service Commission is continuing its review of this proposed merger, and more work must be done to evaluate potential adverse impacts and, where necessary, eliminate or mitigate such impacts.”
The state commission did not ask the FCC for an outright block of the deal and lacks the regulatory authority to stop AT&T’s acquisition of T-Mobile from going through if the FCC approves the merger. However, the commission’s input could be influential and may prompt the FCC to require AT&T to divest some of its New York spectrum assets.
California’s public utility regulators are also investigating AT&T’s takeover of T-Mobile, but have not yet made their findings public.
