FCC Asks AT&T for More Data on How T-Mobile Bid Boosts Broadband

The Federal Communications Commission is asking AT&T Inc. (T) for more information about how the company’s proposed $39 billion acquisition of T-Mobile USA Inc. would expand high-speed wireless service in the U.S.

The request follows the unintentional public release earlier this month of an AT&T filing to the FCC that shed light on the company’s deliberations about the cost of deploying high- speed Long-Term Evolution, or LTE, coverage to 97 percent of the U.S. population.

The filing shows that AT&T could meet that target for “$3.8 billion -- one-tenth of the $39 billion purchase price for T-Mobile,” according to an Aug. 18 news release from Free Press, a Washington-based policy group that promotes wide access to communications.

The FCC and Justice Department are vetting the acquisition proposed March 20 in a review AT&T executives have said will take about a year. AT&T’s purchase of Bellevue, Washington-based T-Mobile would combine the second- and fourth-largest carriers to create a new market leader ahead of No. 1 Verizon Wireless.

President Barack Obama in his Jan. 25 State of the Union address set a goal of extending high-speed wireless, or broadband, to 98 percent of all Americans within the next five years.

AT&T, in a partially redacted version of the same filing posted on the FCC’s website, said the “scale and scope of the larger combined wireless business will permit the additional capital investment to be spread over a larger revenue base than would be the case absent the merger.”

“Simply put, AT&T would not be able to deliver 4G LTE to 55 million more Americans without this merger,” AT&T spokesman Michael Balmoris said in an e-mail today. “To argue otherwise is false and absurd.”

Balmoris said it’s “laughable” that Free Press “would claim expertise in how corporations should spend billions, much less how to build a modern network of any type.”

Sprint Nextel Corp. (S), which opposes the transaction, declined to comment, said spokesman Tom Johnson.

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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