Friday, December 29, 2006

AT&T/BellSouth Make Additional Commitments

Yesterday, ATT/BellSouth, made additional commitments to the FCC in order to placate all those that oppose the merger of the two companies. There are all kind of goodies in there including stand-alone 768 Kbps broadband service for $19.95/month.

It will also give up its 2.5 GHz spectrum as part of the deal. However, they will be keeping the 2.3 GHz spectrum (WCS) surrounding the satellite radio providers. That means the AT&T/BellSouth behemoth will be bullying XM and Sirius for some time to come.

By July 21, 2010, ATT/BellSouth agrees to: (1) offer service in the 2.3 GHz band to 25% of the population in the service area of ATT/BellSouth's wireless communications services (WCS) licenses, for mobile or fixed point-to-multi-point services, or (2) construct at least five permanent links per one million people in the service area of ATT/BellSouth's WCS licenses, for fixed point-to-point services. In the event ATT/BellSouth fails to meet either of these service requirements, ATT/BellSouth will forfeit the unconstructed portion of the individual WCS licenses for which it did not meet either of the service requirements as of July 21, 201o; provided, however, that in the event the Commission extends the July 21, 2010, buildout date for 2.3 GHz service for the WCS industry at large ("Extended Date"), the 2010 buildout date specified herein shall be modified to conform to the Extended Date. The wireless commitments set forth above do not apply to any 2.3 GHz Wireless spectrum held by ATT/BellSouth in the state of Alaska.

XM and Sirius missed an opportunity to extract concessions out of the merger arrangement. We think they could have made some legitimate points in having AT&T/BellSouth divest themselves of the WCS licenses. Many of these licenses were originally held by much smaller players. Now it is mostly in the hands of AT&T/BellSouth and NextWave Broadband, the smaller players being pushed out. If nothing else, they could return the favor that AT&T/BellSouth has given them through their constant nit-piking via the WCS Coalition. Perhaps it is not too late.

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