D.C. Memo: Will DOJ, FCC Let T-Mobile Buy UScellular?
D.C. Memo: Will DOJ, FCC Let T-Mobile Buy UScellular?
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Wireless Deal: Will the DOJ and FCC approve the $4.4 billion (cash and debt) sale of UScellular to T-Mobile announced yesterday? UScellular CEO Laurent Therivel told Wall Street analysts that the two sides had taken steps to win the support of Washington, D.C. regulators. “T-Mobile is expected to make employment offers to a significant number of UScellular associates following the transaction. And so given the benefits to customers and to associates, and the mitigation of spectrum aggregation issues, we are hopeful for a smooth regulatory approval process of the transaction,” Therivel said. Still, the transaction removes a wireless player, albeit a regional one, from the competitive landscape. UScellular was just starting to roll out Fixed Wireless Access (FWA) service. “We would expect regulators to scrutinize the transaction regardless of the administration in office. We think there are fairly compelling consumer benefits from the transaction given UScellular lacks scale to compete both on a regional and national level,” said Key Banc analyst Brandon Nispel. In a report, Craig Moffett, Senior Managing Director at MoffettNathanson, indicated that although T-Mobile was acquiring just one-third of UScellular’s spectrum portfolio, the deal could put T-Mobile over federal spectrum caps in some locations. “Will the FCC and DOJ allow a transaction that will put T-Mobile above the FCC’s spectrum ownership ‘soft cap’ in select markets? We don’t know. But it is clear that spectrum concentration concerns are at the very top of the list of issues that made this transaction take so long to announce. The (negative) read-through for the spectrum market here is obvious,” Moffett said.
