AT&T defends $23 billion EchoStar deal, so rivals could feel the heat

It's not every day that a company – even as big as AT&T makes a $23 billion deal – and that inevitably causes some disturbance. Now, AT&T is defending its $23 billion spectrum acquisition from EchoStar, insisting the deal will not harm competition in the wireless market.

A white paper to the DOJ

AT&T submitted a white paper to the Justice Department's antitrust division outlining why its pending purchase of spectrum licenses from EchoStar should be approved, per reports. The acquisition would give AT&T about 30 megahertz of nationwide 3.45 GHz spectrum, which it is already leasing, and roughly 20 megahertz of 600 MHz spectrum. AT&T also plans for EchoStar to operate its Boost Mobile service primarily on AT&T infrastructure while maintaining a separate network core.

The carrier emphasized that its mid-band spectrum is smaller than that of T-Mobile and Verizon, which has limited its ability to scale fixed wireless broadband, an alternative to cable in homes. Expanding these holdings, AT&T argued, would let it offer bundled mobile and fixed broadband services more widely.

Despite EchoStar shifting to AT&T's infrastructure, AT&T insisted the company would remain a facilities-based competitor. It noted that EchoStar could offer lower-cost services under the new arrangement, potentially allowing it to compete more effectively following T-Mobile's merger with Sprint in 2020.

Concentration of spectrum?

Regulators have worried that the three biggest carriers controlling too much spectrum could hurt competition, raising prices or affecting service quality. Still, industry experts think AT&T's purchase of EchoStar spectrum probably won't run into serious legal problems. Most of the other potential buyers, like SpaceX, have already bought a lot of spectrum, and cable companies are unlikely to get involved.

T-Mobile opposes parts of the deal, asking the FCC to set conditions or block it, especially to ensure rural areas get coverage. AT&T plans to reach 40% of the population in three years and 75% – in five. Some consumer groups said giving AT&T more spectrum could help, but warned that equal holdings among big carriers don't guarantee real competition. The Rural Wireless Association suggested unused licenses be given to smaller rural carriers.

Ongoing tensions

From my perspective, the EchoStar deal gives AT&T a chance to expand its network and offer better service, but it also raises questions about competition. Without strong oversight, the biggest players could end up dominating even more, leaving fewer choices for consumers.

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