RealTime IT News

DoJ: Cingular Free to Buy AT&T Wireless

The Department of Justice (DoJ) today announced that it would approve Cingular's $41 billion dollar acquisition of AT&T Wireless , provided the mobile carrier sells assets, such as spectrum and customer contracts, in 11 states.

Without the divestitures, some customers could face higher prices, reduced innovation and a delay in rolling out new broadband data services, the DoJ concluded.

The states that antitrust lawyers were most concerned with were: Connecticut, Georgia, Kansas, Kentucky, Louisiana, Massachusetts, Missouri, Michigan, Oklahoma, Tennessee and Texas.

"Today's action by the department ensures that consumers of mobile wireless services will continue to benefit from competition," R. Hewitt Pate, assistant attorney general in charge of the DoJ's antitrust division, said in a statement.

Shortly after the DoJ's announcement, Cingular said it would meet the DoJ's terms.

"Today's decision by the [DoJ] is an important step in the approval process," Stan Sigman, president and CEO of Cingular Wireless, said in a statement. "We hope the merger process will continue to progress in an orderly and expeditious fashion."

Meanwhile, the Federal Communications Commission (FCC) is wrapping up its own review of the planned merger. The agency also has authority to require Cingular to sell airwaves in certain markets.

The two reviews are independent of each other, with the DoJ examining competitive issues and the FCC primarily concerned with management of the public spectrum.

Clay Owen, a Cingular spokesman, told internetnews.com he expects the FCC ruling as early as tomorrow.

"No other regulatory approvals are needed," Owen said.

A source close to the proceedings told internetnews.com that the FCC ruling would likely come in "the next day or two."

A DoJ spokeswoman was not immediately available. FCC spokeswoman Lauren Patrich declined comment.

Cingular, a joint venture between SBC Communications and BellSouth , expects to complete the merger by year's end.

The Atlanta-based carrier emerged as the winner in the AT&T Wireless sweepstakes in February, after outbidding Vodafone in an auction.

The deal will give Cingular 46 million subscribers, vaulting it ahead of the current leader Verizon Wireless, while hastening long-awaited consolidation in the wireless industry.

Last week, Cingular said it added 657,000 net subscribers during the third quarter, up 54 percent from the previous quarter. The customer growth, as well as demand for data services such as text and photo messaging, boosted revenue to $4.3 billion, up nearly 5 percent over the same period last year.