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Sprint Corporation Message Board

  • teamrep teamrep Jan 29, 2013 3:11 PM Flag

    What the DOJ letter effectively does is disclose their thinking - it narrows concerns.

    Up to now the DOJ has been pretty silent about how their review was going. Analysts, including myself, have thought that DOJ would not rule against the acquisition by Softbank on antitrust grounds because this will help more than hinder the competitive structure of the US licensed telecommunications industry.

    AT&T, DISH and others have not requested for the FCC or DOJ to throw out SB's acquisition outright. Rather, they have requested a longer response time and further review of the spectrum aggregation. Sprint has propositioned that the process move forward with no further review of the spectrum licensing that proposes to merge Sprint and Clearwire's holdings, asserting that this had already been determined as acceptable by the FCC in their review when New Clearwire was formed. At that time, Sprint contributed its 2.5-2.6GHz spectrum to add to Clearwire's... thus the whole was considered as acceptable by the FCC and not being anticompetitive by DOJ. DISH and AT&T's testimony and motions to the FCC request that there be a fresh review owing to the change in circumstances. This appears to have some merit as much of the spectrum remains unused and thus subject to overall edicts for the FCC to cause spectrum to come into the most useful purposing.

    However, the issues in the media and analysts concerns have mostly centered around FCC deliberations with DOJ having been silent, and thus somewhat of a risk to become the spoiler due to the high degree of the proposed foreign ownership. The broad guidelines are for a review to take place whenever foreign ownership of 25% of more is involved. The nature of telecommunications is from local/regional to global participation with international convergence having become a dominant trend. Verizon, T-Mobile and others have higher than 25% foreign ownership already... so the issue of ownership is weighted more towards its impacts on the structure of competitiveness within the industry, and, of course, on the issue of defense/security and public safety as outlined in the DOJ letter.


    What was not in the DOJ letter may be more important than what was: The DOJ has not requested a delay for review of antitrust concerns including impacts of foreign ownership. The focus on homeland defense and public safety, therefore, tends to narrow the risk of the deal moving forward. While the delay gives DISH, AT&T and others more time to press their issues with the FCC, it tends to push away the more intractable issue of antitrust. This can be viewed as being more favorable than not... any narrowing of these potentially thorny issues helps to head this towards conclusion. What remains unresolved is how the Clearwire spectrum will be treated: whether Sprint's assertion that it should be allowed to be accumulated under the new Sprint entity or whether DISH et al's assertion that the situation has become different and a cause for a review with the intent of gaining access to a portion.

    This is a complex process... two steps forward with one step back looks like progress even though on the surface it comes as a delay.

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