FCC Green-Lights AT&T's Leap Buy
The FCC has officially cleared the path for AT&T to acquire Leap Wireless, noting that concessions the carrier has made are enough to satisfy any public interest concerns.
AT&T Inc. (NYSE: T) announced its intent to acquire Leap Wireless International Inc. (Nasdaq: LEAP), which operates the Cricket Communications Inc. brand, in July of last year. The $1.19 billion deal earned Federal Communications Commission (FCC) approval Thursday evening. (See AT&T to Acquire Leap Wireless for $1.19B.)
The FCC found that the "public interest benefits of the proposed transaction outweigh the likelihood of significant public interest harms, such that overall, the proposed transaction is in the public interest." It didn't come without conditions, however.
AT&T has to divest spectrum in certain markets, as well as agreeing to begin deploying LTE using Leap's spectrum within 90 days to 12 months of closing -- and within 18 months in six specific markets in south Texas where Leap had a big swatch of customers. It also has to maintain Leap's CDMA roaming agreements as long as it keeps the network around. (See AT&T Plans a Prepaid Cricket Attack.)
The FCC is also requiring AT&T to continue to offer rate plans targeted at value-conscious and Lifeline customers, as well as to provide it with quarterly updates on how it's meeting the conditions and the migration of Leap customers.
AT&T gains nearly 5 million new prepaid customers through the deal, but, more importantly, it gets access to Leap's spectrum, including its complementary PCS and AWS holdings and an LTE network that covers 21 million people.
— Sarah Reedy, Senior Editor, Light Reading