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FCC Approves AT&T's $1.9 Billion Qualcomm Spectrum Purchase

Soulskill posted more than 2 years ago | from the who-needs-tmobile-anyway dept.

AT&T 52

An anonymous reader writes "Bloomberg reports that the U.S. Federal Communications Commission has granted approval for AT&T to buy Qualcomm's wireless spectrum licenses for $1.925 billion. The FCC admitted to having some 'competitive concerns' about letting AT&T snap up such a large swath of spectrum licenses, but were satisfied by simply imposing a number of conditions to prohibit interference on neighboring bands. They also said the deal facilitates their goal of 'expanding mobile broadband deployment throughout the country.'"

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52 comments

So... (3, Insightful)

SJHillman (1966756) | more than 2 years ago | (#38473270)

So... what does this mean for consumers? Better AT&T coverage? Cheaper wireless? Somehow I get the feeling the opposite is going to happen...

Re:So... (5, Funny)

Kenja (541830) | more than 2 years ago | (#38473286)

At a guess, it means 1.925 billion dollars of hidden fees spread out across all the AT&T users.

Re:So... (2)

jc42 (318812) | more than 2 years ago | (#38473406)

It presumably also mean an extension of some of the industry's crappiest "customer support" to that part of the spectrum.

What I wonder is: Where is Lily Tomlin when we need her?

Re:So... (2)

NoNonAlphaCharsHere (2201864) | more than 2 years ago | (#38474104)

What I wonder is: Where is Lily Tomlin when we need her?

Sadly, her job was outsourced to Bangalore many years ago.

Re:So... (0)

Idbar (1034346) | more than 2 years ago | (#38477054)

Or something a la Netflix:
This is great news, you'll have almost one more bar [1], and your phone plans will only cost twice as much!




[1] In certain locations where concentration of people is less than on per sq. mile.

Re:So... (3, Interesting)

Linsaran (728833) | more than 2 years ago | (#38473418)

The plan is that they'll be able to provide better LTE based mobile broadband. But then no plan ever survived contact with the enemy.
If you want cheap wireless, you're not using one of the big 4 companies anyways. If you want better coverage, well voice coverage is probably already about as good as it's gonna get, the costs to provide coverage to the 1% of people who aren't already saturated are proportunately not worth the return, and Data coverage is more focused on providing faster speeds in key markets with LTE than providing even '3g' speeds in the fringe areas where it's not saturated.
Frankly the spectrum is why AT&T wanted t-mobile in the first place, and since that deal fell through this is the next best thing for them.

Re:So... (1)

dokebi (624663) | more than 2 years ago | (#38473788)

Unlike 3G, 4G (LTE) networks can carry both data and voice on the same channel, as well as being more spectrum efficient. It would be wise for ATT to deploy LTE as fast as they can while removing the less efficient 3G phones from the market. This means eventually LTE would be deployed everywhere, and whet it does, even the dumb phones will use LTE for voice, leaving much more room for data for others.

Re:So... (1)

Linsaran (728833) | more than 2 years ago | (#38474226)

Unlike 3G, 4G (LTE) networks can carry both data and voice on the same channel, as well as being more spectrum efficient. It would be wise for ATT to deploy LTE as fast as they can while removing the less efficient 3G phones from the market. This means eventually LTE would be deployed everywhere, and whet it does, even the dumb phones will use LTE for voice, leaving much more room for data for others.

See my above comment about no plan ever surviving contact with the enemy.

How long did it take to fully phase out AMPS after TDMA and CDMA cell phones became common place? There are plenty of people (particularly the elderly who are 'set in their ways') that are STILL using TDMA or early generation CDMA devices. While LTE might be the ultimate goal, it'll be years before it can be implemented. This spectrum purchase is a step in that direction, but at this point who knows if that's where we'll end up, or if something completely different will come along.

Re:So... (0)

Anonymous Coward | more than 2 years ago | (#38475896)

I call BS.
The AMPS system has been turned off, it's been off since 2008 when they were no longer legally required to operate it.
The TDMA and first generation CDMA systems are also off in areas that are fully served by 3G GSM service, as it makes no sense to operate these when 3G service is available. AT&T stopped selling TDMA phones shortly before being purchased by Cingular. That was a good enough excuse as any. 2year contracts ended around 2007/2008, so they'be been frequency harvesting since then. The only places still operating TDMA in the US are owned by regional carriers that have a reason to.

Re:So... (1)

segin (883667) | more than 2 years ago | (#38480200)

AT&T's 3G network can potentially put voice and data in the same channel, with good spectral efficiency over standard 3GPP Release 99/Release 4 UMTS W-CDMA CS voice by deploying CSoHS, AKA Circuit-Switched Voice Service over High Speed Packet Access (CS voice packets are placed on top of the layer 2 MAC protocol, and not IP, thus not a VoIP implementation), introduced in 3GPP Releases 7 and 8.

Re:So... (4, Insightful)

StikyPad (445176) | more than 2 years ago | (#38474088)

Frankly the spectrum is why AT&T wanted t-mobile in the first place, and since that deal fell through this is the next best thing for them.

Frankly I don't think that's true. Spectrum is what they need, but the dominant market position is what they want. The T-Mobile acquisition would have made them the largest carrier overnight for a paltry $30B and given them the spectrum they needed to boot, while this $1B deal gives them spectrum for less than the penalties on the T-Mobile deal falling through. I think it's a clear indication that spectrum was *not* the primary motivation for their attempted buyout, but we all knew that.

Re:So... (0)

Anonymous Coward | more than 2 years ago | (#38475578)

+1 parent. Wish I mad mod points.

Re:So... (3, Informative)

dokebi (624663) | more than 2 years ago | (#38473722)

The spectrum is about 6MHz wide across the country, and 12MHz in NY, Boston, Philly, SF, and LA, in the 700Mhz band. Because of the narrow channel, this spectrum is most likely to deploy LTE (4G) networks outside these areas. It would possible to deploy 3G networks on this spectrum in those four areas, but I would guess not because 4G is more spectrum efficient than 3G.

So, unless you have an LTE phone, it wouldn't improve your coverage.

Verizon has been very aggressive in buying larger, contiguous chunks of spectrum (>10Mhz wide) in the last decade, even if they had to pay more money to get them. T-mobile got some (that's why ATT wanted to buy them), but AT&T often sat out (or was out bid). Based on just that, I would guess Verizon's coverage would be better for the next decade.

In fact, I have noticed AT&T has a history of under investing in their infrastructure in the last decade. Instead of planning ahead, they defer infrastructure upgrades until the last minute, which costs more but get less return (or no return, in the case of T-mobile acquisition). YMMV.

Re:So... (0)

Anonymous Coward | more than 2 years ago | (#38475694)

+1 informative parent.

Re:So... (1)

segin (883667) | more than 2 years ago | (#38480218)

AT&T would not deploy 3G services in these bands. That would involve not only deploying new base stations, but brand new phones, as no UMTS device they have to market to date supports UMTS in the 700MHz bands. As far as I know, no such phone exists at all, period. Their current lineup of phones usually support dual-band or tri-band UMTS, with 850MHz and 1900MHz being common, and the original 2100MHz UMTS band appearing in some "super world phones" (such as the LG CU-515; as their standard "world phones" usually don't support 2100MHz, and thus no service in Japan or South Korea, where 2G GSM is completely absent, nor 3G roaming in most places outside of the Americas, as the usual 3G bands overseas are 2100MHz and 900MHz, although a few 850MHz 3G networks can be spotted here and there, such as in Australia and Israel.)

Re:So... (1)

jonbryce (703250) | more than 2 years ago | (#38475712)

I would guess better coverage, but you have to pay more for it.

We had concerns (4, Funny)

Anonymous Coward | more than 2 years ago | (#38473312)

"We had concerns about AT&T not competing, but when we realized how big the bribes they paid us and our appointing politicians were, we decided to let the deal go ahead anyways"

Re:We had concerns (0)

Anonymous Coward | more than 2 years ago | (#38475704)

"We checked for leaked memos documenting their evil lies, but there weren't any for this purchase."

Hello again... (2)

Capt James McCarthy (860294) | more than 2 years ago | (#38473324)

Ma Bell! You were gone for quite a while.

AT&T & CDMA? (0)

Anonymous Coward | more than 2 years ago | (#38473436)

Is Qualcomm's spectrum something that can be used by either GSM or CDMA carriers? I am surprised that anything Qualcomm does would be of any use to GSM carriers like AT&T or T-Mobile. If Qualcomm needed to sell, one would have thought that they'd sell to Sprint or Verizon.

Or is this totally unrelated to whether the carrier is a CDMA or a GSM carrier?

Re:AT&T & CDMA? (3, Interesting)

dokebi (624663) | more than 2 years ago | (#38473830)

The spectrum was called MediaFLO, owned by Qualcomm to deploy digital TV. ATT will be repurposing it for LTE (4G) only, which is the same technology used by both CDMA or GSM carriers as their next generation technology. In 4G (real 4g, not the marketing 3G+ stuff) all carriers are using the same technology.

This means with 4g, US may get phone compatibility from different carriers finally. It might take them a while, though, as LTE only phones wouldn't exist for another 5-6 years.

Re:AT&T & CDMA? (1)

Linsaran (728833) | more than 2 years ago | (#38474446)

This means with 4g, US may get phone compatibility from different carriers finally. It might take them a while, though, as LTE only phones wouldn't exist for another 5-6 years.

Maybe, but I wouldn't count on it, http://www.infoworld.com/d/mobile-technology/report-spectrum-fragmentation-will-result-in-costlier-lte-smartphones-181968 [infoworld.com]

There's going to be so much fragmentation on LTE that likely most devices will only support a couple of the frequencies required. Plus the US cell carriers are going to do everything they can to make sure the devices are software locked to their specific service. Plus unless the major carriers agree to use the same frequencies for their LTE services, the phones themselves might not physically be capable of operating on other networks than their home network.

Re:AT&T & CDMA? (1)

bill_mcgonigle (4333) | more than 2 years ago | (#38474598)

There's going to be so much fragmentation on LTE that likely most devices will only support a couple of the frequencies required. Plus the US cell carriers are going to do everything they can to make sure the devices are software locked to their specific service.

Certainly the 'free' contract phones will be like this. Separately, though, it should be possible to build a new version of a 'world phone' that can pick up most of the frequencies. Heck, I had a $40 scanner that could pick up most useful bands.

Re:AT&T & CDMA? (1)

segin (883667) | more than 2 years ago | (#38480226)

An LTE world phone is going to have to support 4 GSM bands (850, 900, 1800, 1900), 5 UMTS (850, 900, AWS 1700/2100, 1900, and straight 2100), and fifteen or so LTE bands (all the previous GSM and UMTS bands combined, plus three separate 700MHz bands, 1500MHz, 1600MHz, 2.5GHz...), and likely would suck juice like there's no tomorrow. And this is assuming you're leaving out support for CDMA2000/cdmaOne, which exists in four bands of it's own - 450MHz (Eastern Europe), 800MHz (worldwide), 1900MHz and AWS (USA/Canada.)

Re:AT&T & CDMA? (0)

Anonymous Coward | more than 2 years ago | (#38480812)

There's more than five UMTS bands needed for a world phone. Don't forget about the 800, 1500, and straight 1700 bands used in Japan.

Re:AT&T & CDMA? (2)

fred911 (83970) | more than 2 years ago | (#38473922)

The spectrum can be used for any allocated protocal. Cdma, lte, gsm.. ect. The object is to use the most effective and accepted method.

Re:AT&T & CDMA? (1)

segin (883667) | more than 2 years ago | (#38480234)

While this is true, existing GSM and CDMA radio equipment (base stations and mobile equipment) does not support 700MHz for operation. Utilization of these technologies in these bands would require design and manufacture of new base stations and phones. It'd be better put to use deploying LTE, as LTE has far more spectral efficiency over GSM, CDMA or W-CDMA

Re:AT&T & CDMA? (1)

neurocutie (677249) | more than 2 years ago | (#38474178)

Is Qualcomm's spectrum something that can be used by either GSM or CDMA carriers? I am surprised that anything Qualcomm does would be of any use to GSM carriers like AT&T or T-Mobile. If Qualcomm needed to sell, one would have thought that they'd sell to Sprint or Verizon.

Or is this totally unrelated to whether the carrier is a CDMA or a GSM carrier?

1) it is *totally* unrelated to CDMA vs GSM.
2) You haven't kept up with wireless and GSM very much. ALL modern wireless technology HEAVILY uses Qualcomm technology and patents, including if not especially GSM (post-GSM). 3G "GSM" is WCDMA, which is just a modification of CDMA. Qualcomm makes a ton of money off BOTH CDMA and GSM (and LTE), nevermind the money they make from the chipsets that most handset manufs use.

Re:AT&T & CDMA? (0)

Anonymous Coward | more than 2 years ago | (#38487968)

Thank you/ I'm the same AC as the GP.

You are right - I've not really followed the evolutions of GSM or CDMA other than notice a whole slew of alphabet soup - CDMA2000, WCDMA, UMTS, GPRS, being bandied about. So I have no idea whether these technologies have been converging or diverging - thanks to everybody above who answered my questions. So what is the difference between CDMA2000 and WCDMA - if GSM was using a CDMA modification for their 3G, couldn't they have just gone with CDMA2000, since they weren't really 'rolling out their own'?

Another question - GSM phones have always had SIM cards, but have CDMA phones adapted the Removable User Identification Module (RUIM) that would make it easier for customers to change phones? Also, in between, I had seen flash memory cards with a SIM form factor and interface - what became of it - did it ever catch on? Reason I ask - SIMs not only seem to have a limited capacity to start with - one cannot save parameters like different phone numbers for the same person on a SIM that one can on a phone. Either that, or being able to save contects on the micro SD cards would be an improvement.

Whining (2)

DaMattster (977781) | more than 2 years ago | (#38473590)

Now, AT&T can quit whining or lying about not having enough spectrum to build out its LTE network. I'd never give AT&T a dime of my money even if their network was faster than T-Mobile's. Simply on principle alone, I will be staying with T-Mobile for some time to come.

Re:Whining (1)

sleigher (961421) | more than 2 years ago | (#38473708)

I agree. I will pay more for a competitor than to give AT&T any money at all.

Re:Whining (0)

Anonymous Coward | more than 2 years ago | (#38483326)

Or, as Kim puts it: NO bars in MORE places. ;--)

Want a puppy, ask for a pony... (1)

m3ntos (225331) | more than 2 years ago | (#38473840)

So this is the consolation prize?

Re:Want a puppy, ask for a pony... a $2B+$4B pony? (1)

neurocutie (677249) | more than 2 years ago | (#38474546)

That's a stupid idea... AT&T would have gotten approval for this spectrum purchase WITHOUT the Tmo debacle. See that Verizon is probably getting approval for a large $3+B spectrum purchase from the cablecos.

The idea that the Tmo debacle, for which AT&T is paying $4B for its FAILURE, was a strategy to get this $2B spectrum purchase approved is just silly... (total price tag of $6B? lol)

Re:Want a puppy, ask for a pony... a $2B+$4B pony? (1)

m3ntos (225331) | more than 2 years ago | (#38475426)

the sign of a bad joke is having to have it explained.

conditions (0)

shentino (1139071) | more than 2 years ago | (#38473866)

that the bureaucrats are going to be paid off to look the other way on instead of ya know actually enforcing?

the big get bigger ... edging towards a duopoly... (1)

neurocutie (677249) | more than 2 years ago | (#38473872)

Between this $2B spectrum purchase by AT&T and the $3+B spectrum purchase from the cablecos by Verizon, it is quite clear (if it wasn't before), that we in the US are lumbering towards a wireless duopoly, held by the former BabyBells. Sprint and Tmobile (if it will exist in the near future, which it probably won't), are all but doomed -- there is no way they will be able to effectively compete, nevermind survival a direct squeeze/war by the BabyBells, if and when they choose (probably under some Repub administration).

It will be surprising, in 5-10 years, not to have much higher prices and many fewer choices... (sigh)...

Re:the big get bigger ... edging towards a duopoly (1)

neurocutie (677249) | more than 2 years ago | (#38474040)

the coming duopoly of the Baby Bells, also the prime holders of the cellular bands (850Mhz), drives home the answer to the question posed in the '90's:

Can upstart carriers who did not benefit from the massive cellular band giveway survive and overcome the market and technical obstacles presented by the spectrum resources they could acquire. Just how much of a headstart and intrinsic advantage did the cellular carriers get?

Through a gradual series of buyouts and mergers, the BabyBells (AT&T and Verizon) now have near total control over the cellular bands (850Mhz), spectrum that was given away initial (not paid for), and has tremendous inherent advantages in terms of coverage (distance) and building penetration, when compared with the PCS bands (1900Mhz), the primary bands that Sprint and Tmobile were forced to buy and utilize (they didn't get free spectrum and were not able to get any 850Mhz spectrum).

The struggles of Sprint and Tmobile, the primary PCS carriers in US, make the answer now extremely clear: The PCS carriers never really had a chance against the cellular carriers who happen to also be Baby Bells with the deep landline pockets.

Spectrum for communications should be nationalized (1)

Anonymous Coward | more than 2 years ago | (#38474000)

No one company should own any kind of spectrum for communications. It should be *licensed* from the government, with licensing fees paid yearly.
Multiple companies can use the same spectrum for the same purpose. Hell, the towers used today ought to be considered standard infrastructure like utility lines, telephone lines, etc... Revert to common carrier status and anyone can use anyone else's - that way all the different companies can invest in upgrading, all using the same protocols, same bandwidth, etc... Then it wouldn't be nearly as expensive as each company maintaining their own...

Sheesh - they did it 30+ years ago with telephone companies... Time to do it again with cellular companies...

Re:Spectrum for communications should be nationali (1)

AshtangiMan (684031) | more than 2 years ago | (#38475370)

Agreed. The spectrum belongs to the public and private companies should not be allowed to buy and sell it.

Re:Spectrum for communications should be nationali (1)

neurocutie (677249) | more than 2 years ago | (#38477112)

No one company should own any kind of spectrum for communications. It should be *licensed* from the government, with licensing fees paid yearly.
Multiple companies can use the same spectrum for the same purpose. Hell, the towers used today ought to be considered standard infrastructure like utility lines, telephone lines, etc... Revert to common carrier status and anyone can use anyone else's - that way all the different companies can invest in upgrading, all using the same protocols, same bandwidth, etc... Then it wouldn't be nearly as expensive as each company maintaining their own...

Sheesh - they did it 30+ years ago with telephone companies... Time to do it again with cellular companies...

"owns" *means* licensed from the gov't now...

I don't see what you mean about landlines, which *are* owned by only a few large carriers.

Mostly I don't see what you mean by multiple carriers can use the same spectrum. And SOME POINT or level of granularity, there has to be exclusivity of use. Even Ethernet works that way. Only ONE carrier signal can be running at that level of granularity, be it in time, space, frequency band, locality, etc. Therefore there MUST be SOME amount of dividing up between the carriers. I don't think you solve much if you push this level of exclusivity below frequency bands and into channels or time slots or whatever -- still will have the same problems.

And you don't really address how the tower infrastructure would be paid for and maintained, nevermind any incentive for upgrading. Are you saying the gov't should pay for all intrastructure (then license out slot/localities)? gawd. Or all carriers should "chip in" (into what? and in what proportion?)

I don't see a coherent workable solution in your post here. But I do agree that wireless carriers SHOULD revert to common carrier status, instead of this silly "information service" nonsense. Of course I also believe in net neutrality, but the carriers don't...

Interesting history. (1)

koan (80826) | more than 2 years ago | (#38474378)

1889: AT&T becomes the overall holding company for all the Bell companies.

30 December 1899: American Bell Telephone Company is purchased by its own long-distance subsidiary, American Telephone and Telegraph (AT&T) to bypass state regulations limiting capitalization. AT&T assumes leadership role of the Bell System.

1974 Bell System Divesture (Collapse of a monopoly)
http://en.wikipedia.org/wiki/Bell_System_divestiture [wikipedia.org]

1995 Southwestern Bell Corp. became SBC Communications

2000 Bell Atlantic — (acquired GTE in 2000 and changed its name to Verizon)

January 31, 2005, SBC announced that it would purchase AT&T Corporation
  October 31, 2005 the Federal Communications Commission approved it

Federal Communications Commission (FCC) approved the new AT&T's acquisition of a regional Bell Operating Company, BellSouth

June 29, 2007 AT&T announced that they had reached an agreement to purchase Dobson Cellular, which provided services in the US under the name Cellular One in primarily rural areas

2011 acquisition of Qualcom

Broken apart and then reassembled.

Can't have this (1)

amightywind (691887) | more than 2 years ago | (#38474486)

We can't have expanding businesses, here in the Bolshevik States of Amerika. What is the FCC thinking? The money might go to 'The Rich'.

Why the T-Mobile deal was abandoned? (1)

bill_mcgonigle (4333) | more than 2 years ago | (#38474548)

Ah, so AT&T gets what they wanted out of the T-Mobile deal - more spectrum can be substituted for more towers as far as capacity goes, except they're going to need to get new handset hardware deployed. But, perhaps that's cheaper, including the penalty payment to T-Mobile, than actually buying T-Mobile.

Cheaper in the face of government obstruction, anyway.

Re:Why the T-Mobile deal was abandoned? (0)

Anonymous Coward | more than 2 years ago | (#38474630)

And the FCC looks like they are doing their job.

Makes more sense than the original plan. (2)

SeaFox (739806) | more than 2 years ago | (#38474572)

Well now, this is a significantly cheaper way to get more spectrum than buying out T-Mobile. That is the reason why you said you needed to be allowed to buy them, right AT&T? Didn't you say that was the only way to deal with your lack of frequencies for all your customers? There was no other way?

Good thing you had this second chance to approach the problem the find another solution. I'm sure you're happy with all the money you saved doing it this way, too.

Indeed. (1)

sirroc (1157745) | more than 2 years ago | (#38476776)

I remember reading an article during the opening phase of the purchase. In it; it stated that should AT&T spend the $30B to upgrade their network, etc. It would be vastly superior to their rivals in any form. Which is why the red flags went up. As proven, this was about eliminating competition and eventually an assumed increase in prices. The cost of the $30B merger would have been offset by the increase in the X millions of customers that Tmobile has. Not to mention that AT&T had planned to phase out Tmobile's system, so that people would be forced to buy new phones with the AT&T frequencies.

I hope that with the ever decreasing price of bandwidth and increase in end user access to that will help smaller companies. However; should a future spectrum be auctioned off then once again we're screwed.

In the Absense of Any Free Market Driven QUALITY (1)

Bob_Who (926234) | more than 2 years ago | (#38475046)

.....AT&T Oligarchs instead resort to an Iron curtain and fear driven domination over QUAL-COMMIES.

Lovely Parting Gifts (1)

Nom du Keyboard (633989) | more than 2 years ago | (#38475776)

So this is the consolation prize for not winning T-Mobile (and that hot T-Mobile girl).

Of course the real cost here is $1.925B + $4B deal breaker fee to T-Mobile. Buy that girl a new pair of heels.

Re:Lovely Parting Gifts (0)

Anonymous Coward | more than 2 years ago | (#38476280)

Think about this...

It generally takes the FCC 8-12 months (sometimes longer) to approve spectrum transfers. So ATT would have had to have the paperwork in for this qualcomm purchase BEFORE the government started throwing up red flags around the T-Mobile merger.

ATT - T-Mobile (0)

Anonymous Coward | more than 2 years ago | (#38476166)

DOJ and FCC objected to the ATT/TM merger on the basis there would be a >60% subscriber concentration. To me that is a good thing because uniquely to Telecom we do not need more competition, we need more concentration, to serve rural areas, to amplify connection speed roll outs and to recapture much needed capital investments. The merger kill will be a capital investment kill. The minor difference in "pricing power" would have been more than offset by access to more rural customers, better connection speeds for existing customers, and speed to market of those things.

Although ATT got screwed for $4B already it's not too late for some enlightened regulator to read these words and reverse the decision, and rather than forcing the sale of assets, simply impose a rural component to the build-outs. It would be sufficiently socialist for this administration, who believes in single payer anyway . . . . .

JJ

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