TR Daily Clyburn Complains About AT&T/FiberTower Order Process
Friday, February 9, 2018

Clyburn Complains About AT&T/FiberTower Order Process

FCC Commissioner Mignon L. Clyburn is upset about the process the agency used for approving AT&T, Inc.’s acquisition of FiberTower Corp.’s 39 gigahertz band licenses as part of its purchase of the company.

In a statement released last night, Ms. Clyburn said, “‘It has long been customary at the FCC for Bureaus planning to issue significant orders on delegated authority to provide those items to Commissioners 48 hours prior to their scheduled release. Then, if any one Commissioner asked for the Order to be brought up to the Commission level for a vote, that request would be honored.’ That is a direct quote from then-Commissioner Ajit Pai during testimony before the Senate Committee on Commerce, Science, and Transportation on March 18, 2015. Therefore, I am disappointed that Chairman Pai did not honor my request to have the full Commission vote on an Order that permitted the transfer of 39 GHz licenses from FiberTower to AT&T.”

Ms. Clyburn continued, “By objecting to proceeding on delegated authority, I do not suggest that I would have voted against this item. Rather, its analysis is lacking in its current form. I believe that our statutory obligations, under the Communications Act, requires us to do more than simply consider whether AT&T’s 39 GHz holdings, post-transaction, exceed 1850 GHz of millimeter wave spectrum. The Commission should also consider whether AT&T’s substantial holdings in other spectrum bands, including below 1-GHz, together with these 39 GHz licenses from FiberTower, could result in potential public interest harms.”

In response to Ms. Clyburn’s statement, an FCC spokesperson said today, “Approval of this transaction was in the public interest because it will expedite the development and deployment of 5G services for the benefit of American consumers. Moreover, it was entirely appropriate for the Wireless Telecommunications Bureau to issue this decision because it was consistent with past precedent, most notably the Verizon-Straight Path transaction that was approved by the Bureau just last month. Finally, it is critical to note that Commissioner Clyburn was unable to persuade any other Commissioner to support her request.”

AT&T announced today that it has closed on the $207 million FiberTower acquisition, which the carrier said will give it “a significant footprint in the 39 GHz band, with average holdings of more than 375 MHz in the top 100 markets.” It said the spectrum will help it deploy 5G services in a dozen markets by late this year.

The Wireless Bureau’s release of a memorandum opinion and order yesterday in ULS file nos. 0007652635 and 0007652637 was made possible by an order on remand and MO&O released late last month by the bureau’s Broadband Division implementing a settlement agreement between FiberTower and the FCC under which FiberTower retained 479 licenses and abandoned 224 licenses, including all of its 24 GHz band licenses (TR Daily, Jan. 29). Under the agreement, AT&T is paying $27 million to the U.S. Treasury on behalf of FiberTower.

Last month’s item granted FiberTower’s request for a limited waiver of a 2012 substantial service deadline related to reinstatement of some 39 GHz band licenses.

In 2015, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit handed FiberTower a partial victory in the company’s legal challenge of the FCC’s cancellation of 595 licenses in the 39 GHz band and 94 licenses in the 24 GHz band (TR Daily, April 3, 2015). The court agreed with FiberTower that the FCC erred when it canceled 42 of the licenses without analyzing the fact that FiberTower had constructed links in the spectrum and was operating them. It remanded the error to the FCC. However, the court rejected other arguments advanced by FiberTower.

The AT&T/FiberTower transaction approved yesterday is the latest involving the purchase of millimeter-wave spectrum by one of the two largest wireless carriers to the dismay of smaller providers, following orders approving Verizon Communications, Inc.’s acquisition of Nextlink Wireless LLC and Straight Path Communications, Inc. (TR Daily, Nov. 29, 2017, and Jan. 18).

“After carefully evaluating the likely competitive effects of the proposed transfer of control, we find that the likelihood of any competitive harms is low,” the Wireless Bureau said in the order released yesterday. “AT&T’s post-transaction spectrum holdings across the 39 GHz bands do not raise any competitive concerns in light of the current state of the marketplace and our millimeter wave (mmW) spectrum holdings threshold, as recently revised in the Spectrum Frontiers Second Report and Order. Further, we find that public interest benefits are likely to be realized from the transfer, including the expeditious use of this mmW spectrum for the potential introduction of innovative fifth-generation (5G) services to the benefit of American consumers. Based on the record before us and on our competitive review, we find that the transfer proposed herein will serve the public interest, convenience, and necessity, and therefore we consent to the transfer of control.”

The order said “that post-transaction, AT&T will not trigger the mmW spectrum threshold of 1850 megahertz in any county subject to the proposed transaction. Its maximum spectrum holdings in any given county would be 796.8 megahertz.”

The bureau denied or dismissed petitions and comments filed by several parties, including the Competitive Carriers Association, T-Mobile US, Inc., and M&M Brothers LLC.

It noted that CCA, T-Mobile, and M&M Brothers “argue that we should not grant FiberTower waivers of the substantial service requirements and should not reinstate licenses that were terminated for failure to build out and that were subject to a remand order from the D.C. Circuit. They argue that instead we should reclaim and auction the spectrum associated with FiberTower’s unbuilt licenses.”

The bureau said that to the extent parties argued that the agency “should not grant waivers and extensions of the substantial service requirements, their arguments are not transaction specific. They do not arise out of the transaction at issue here, involving the transfer of control of FiberTower’s licenses. Instead, such arguments concern issues relate to FiberTower’s requests for license waivers and extensions of the substantial service requirements that were subject to a separate lengthy proceeding, and presenting them now is untimely and unrelated to any competitive harms that may arise out of consent to this transaction. Those parties raising the issues now could have filed informal objections when FiberTower filed its extension and waiver requests originally, but they did not do so.”

The order added that “none of the arguments in the record points to any competitive harm that might be caused by the proposed transaction. As discussed below, we find that consenting to the transfer of control of FiberTower’s 39 GHz licenses to AT&T will most likely enable that spectrum to be used rapidly in 5G development and deployment, and that this would serve the public interest.” —Paul Kirby, [email protected]


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