AT&T was dealt a bureaucratic curveball late Monday by the Federal Communications Commission which decided to coordinate its review of AT&T's controversial $39 billion bid for T-Mobile with its proposed purchase of beachfront wireless spectrum from Qualcomm.
The FCC also stopped the shot clock on its review of the $1.9 billion Qualcomm deal, which yesterday hit the regulator's 180-day time limit for merger reviews.
Public interest groups and AT&T's competitors requested the FCC combine the two reviews, arguing that together the two AT&T acquisitions give the company too much control over the wireless industry. But the FCC stopped just short of formally combining review of the two deals, instead choosing to "coordinate" them, and leaving open the option of taking up the two deals independently at a later date.
In a letter, wireless telecommunications chief Rick Kaplan acknowledged that the two deals raise similar concerns. "The commission's ongoing review has confirmed that the proposed transactions raise a number of related issues, including, but not limited to, questions regarding AT&T's aggregation of spectrum throughout the nation, particularly in overlapping areas," Kaplan wrote.
AT&T, which argued vigorously against combining the two deals, did take some solace in the subtle difference between a coordinated review and a combined one. "We believe the Qualcomm transaction stands on its own merits. We are pleased that the Commission has rejected calls to officially consolidate the two deals and has expressly preserved the ability for the Qualcomm application to be resolved in advance of the T-Mobile application," AT&T said in a statement.
Public interest groups see the FCC's move, though it's not exactly what they wanted, as a win. "It doesn't matter whether both transactions are in the same docket; the fact that the [FCC] will consider them together in any manner is a strong statement," said Gigi Sohn, president and co-founder of Public Knowledge.
How the FCC's decision to "coordinate" reviews of the two deals will affect the timing and outcome of both transactions is unclear. Certainly the language allows the FCC to have it both ways, linking the two deals together, and yet not formally putting them under one docket.
In the near term, the FCC will not be acting independently on the Qualcomm review, which was announced last December. The regulator has also stopped the shot clock on the T-Mobile deal, requesting more information last month from AT&T. AT&T has said it expected to close the T-Mobile deal within a year after it was announced in March.