A lot of updates this week, mostly good:
First off, the FCC has combined the acquisition of Qualcomm spectrum with the T-Mobile review. This means that AT&T now has to show that it needs both T-Mobile AND Qualcomm for its 4G strategy, and it means the FCC can review the overall impact on the mobile communications industry.
Speaking of reviews, it also appears that AT&T may have shown its hand. A letter leaked to the FCC (now removed) contradicts AT&T’s argument that it needs T-Mobile’s spectrum for LTE. In fact, they’re buying T-Mobile solely to eliminate its competition:
For the first time ever the document leaked yesterday pegs the cost of bringing AT&T’s LTE coverage from 80% to 97% at $3.8 billion — quite a cost difference from the $38 billion price tag on the T-Mobile deal. The letter even highlights how AT&T’s own marketing team is well aware that leaving LTE investment at 80% would leave them at a competitive disadvantage to Verizon, resulting in a repeat of the Luke Wilson map fiasco of a few years back, when Verizon made AT&T look foolish for skimping on 3G network investment and coverage.
On the legal front, Bursor & Fisher, a law firm specializing in dealing with mobile carriers, wants to kill the deal with a thousand cuts. Basically: use AT&T’s mandatory arbitration clause against them by keeping AT&T’s legal department very busy with mediation. I wonder if they’re going to regret having the Supreme Court uphold mandatory arbitration after the lawyers are done.
Finally, the Telecommunications Industry Association has come out supporting the deal. I can’t say that I’m surprised.