AT&T must sell off some assets

No, it’s not another antitrust deal. But the Department of Justice is requiring AT&T to ax some of its properties in seven markets in order to gain approval of their Dobson Communications acquisition. The given reason is that as it stands, there wouldn’t be adequate competition in some of the areas. These include Kentucky, Missouri, Oklahoma, Pennsylvania, and Texas. There is no word from AT&T on this ruling, but we have to figure that they’ll comply. We’re sure they were aware of such an issue arising at the time of purchase.

In three of these markets, AT&T and Dobson are the primary competitors, and in two others, AT&T has a substantial minority interest in a rival to Dobson. In the final two markets, a licensee of Cellular One, Dobson’s retail brand, competes with ATT.

Those seem like perfectly legitimate reasons to us.

After AT&T satisfies the wishes of the Justice Department, they must next move to the FCC for approval. Reports abound that FCC Chairman Kevin Martin would approve the deal, though there are conditions tied to that, too:

In order to win FCC approval, AT&T will have to agree to cap the amount of federal subsidies used to offset the cost of deploying and maintaining cellular service in rural areas.

According to the not-for-profit group that administers the Universal Service Fund, AT&T received about $82 million from the fund between January and September this year while Dobson, which operates under the retail name Cellular One, got around $32 million in the same period.

Once again, makes sense to us. Also once again, we’re sure AT&T had figured on these issues arising. If they didn’t well, we’d have to question their executives.

[CNN Money]

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1. AT&T, Verizon play nice in asset swap | Going Cellular Says
   

   [...] to many as Cellular One. After that, Verizon bought Rural Cellular Corp. Both hit snags. AT&T had to divest some assets to make the Dobson purchase go through, and Verizon had problems of its own in Vermont. Now, the [...]

   
   Posted on December 5th, 2007 at 9:42 am

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