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.
