The U.S. Federal Communications Commission approved AT&T's US$1.9 billion purchase of spectrum from Qualcomm on Thursday, allowing the carrier to salvage one ambitious deal to acquire more spectrum, after shooting down its planned merger with T-Mobile USA.
AT&T announced its plan to buy the Qualcomm spectrum last December, a few months before it unveiled the much larger proposal to merge with T-Mobile for $39 billion. It said both were motivated by the need for more radio spectrum to increase the coverage and capacity of its LTE (Long-Term Evolution) network. AT&T withdrew the T-Mobile plan on Monday after the FCC, the Department of Justice and others said it was not in the public interest.
With the Qualcomm purchase, AT&T will get 6MHz of spectrum across the country in the coveted 700MHz band, as well as another 6MHz of spectrum in five major metropolitan areas: New York, Boston, Philadelphia, Los Angeles and San Francisco, according to the FCC's order released Thursday. Those five markets represent about 70 million potential subscribers. The carrier has said it plans to use it as a supplemental downlink for its LTE network, allowing for faster and more consistent mobile data service.
The FCC said it approved the deal despite some concerns that it could hurt competition. It imposed conditions that require AT&T not to interfere with services in adjacent frequencies or prevent inter-carrier roaming.
Qualcomm acquired the spectrum from local TV stations and used it to build a network of base stations using its FLO (Forward Link Only) technology, which broadcast TV programming to handsets with specialized radios. The service, called MediaFLO, did not gain a huge following and was discontinued.
All U.S. wireless operators are scrambling to acquire enough spectrum to serve the growing demand for mobile data services. Earlier this month, Verizon Wireless announced an agreement with several cable operators in which it would buy $3.6 billion worth of spectrum.