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00-WDM Final for Web

W D M FCC screens the spectrum holdings of the parties to a merger and identifies overlaps in any geographic markets. If a merger would result in a 33% or greater concentration of the available, comparable, and substitutable spectrum in a particular market, there is potential harm to the public interest. To combat such a situation without necessarily quashing a potential merger, the FCC has sometimes instituted conditions to the merger, such as divestiture of spectrum, to limit the excess concentration of spectrum in a particular market. If the merger between AT&T and Leap Wireless were to be found to be generally in the public interest but fails the Spectrum Screen test, the FCC may opt to attach such a condition but otherwise approve the acquisition. The FCC aims to complete this evaluative process withIN180 days. However, it should be noted that the FCC goes out of its way on its website to reinforce that their timeline is “informal” and that “all dates are approximate.” Assuming that the targeted timeline is followed, the public may file Petitions to Deny the merger or any Comments regarding the merger within the first 30 days following the public notice of the merger application. Any Oppositions to the Petitions to Deny or Comments must be filed withIN15 days, and Replies to these Oppositions would be due a week after that. The FCC analyzes the complete record from this point until the end of the targeted 180-day timeline, though again, the 180-day mark is informal and this analysis can take however long the FCC staff desire. Ultimately, this transaction is likely to be permitted by both the DOJ and the FCC. When the DOJ opposed the merger between AT&T and T-Mobile, the DOJ cited to a need for four major wireless carriers to ensure competition nationwide. Though Leap Wireless is the 5th largest wireless carrier, the disparity between its market share and the four largest wireless carriers is too great to seriously impact the balance of power among those four carriers. Thus, this merger should be approved, at least on antitrust grounds. As is usually the case, the equation becomes more complicated when determining whether this merger complies with the FCC’s public interest standard. However, this merger should be approved even from that vantage point. The acquisition should immediately result in faster speeds and improved coverage for Leap Wireless customers, as they will have access to AT&T’s superior network. This scenario has taken place with the T-Mobile acquisition of MetroPCS, with MetroPCS users gaining access to T-Mobile’s broader network, while paying the same prices on their current MetroPCS plans. This is especially valuable to the public interest, as the prepaid wireless market is overwhelmingly targeted towards lowerincome customers. At worst, the merger may cause an overconcentration of spectrum in some market. As mentioned earlier, this would likely result in a divestiture of spectrum or another condition that addresses any issue the FCC may have, rather than a scrapping of the entire merger. 90


00-WDM Final for Web
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