This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Leap Wireless Review Hangs on Feds' Approach

He said AT&T already has enough spectrum to build out a third major competitor in the prepaid market but its attempt to offer its own branded prepaid service have had lackluster results. "It's easy to say that you plan to enhance competition in the market but our concern is AT&T will say, 'Thanks very much for the spectrum,' and then abandon what is a less profitable niche."

Feld also said the Leap deal's opponents are concerned about spectrum concentration nationally. "The universe of spectrum in the secondary market is limited and continues to go to AT&T and Verizon Communications Inc. through these transactions. It's true the regulators have said previously that Leap is not a competitor to AT&T, but the trouble is when [you] have one of these smaller companies acquired is when you ask where the next competitors to AT&T and Verizon going to come from."
[Read: <a target="blank" data-add-tracking="true" href="http://www.thestreet.com/video/12022049/twitter-buys-trendrr.html"><em>Twitter Buys Trendrr</em></a>]

Feld said he is encouraged by recent DOJ's to challenge mergers in highly concentrated markets, namely the agency's successful effort to stop AT&T's planned takeover of T-Mobile in 2011 and this month's legal challenge to US Airways Group Inc.'s attempt to buy American Airlines parent AMR Corp. out of bankruptcy. "In the US Air/American deal the DOJ said there's a point when we have too much concentration," he noted. "I'd say we're pretty much at that point in wireless too."

Even if the Leap deal isn't challenged, Feld said a long, in-depth review will likely temper enthusiasm for more deals, particularly one like AT&T's possible interest in buying Dish Network (DISH).

Indeed, telecom analysts continue to predict that AT&T's planned acquisition of Leap will be approved by both the FCC and the DoJ. Guggenheim Securities LLC analyst Paul Gallant noted in a recent report that in its application to the FCC, made public in mid-August, AT&T stressed that the merger would put AT&T over the FCC's spectrum cap in only 38 of 356 designated wireless markets. In 17 of those 38 markets, AT&T would be over by less than 5 MHz. A company is considered over the spectrum cap if it controls more than one-third of the wireless spectrum in a market.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LEAP $0.00 0.00%
ATNI $70.88 0.00%
T $34.69 0.00%
AAPL $122.55 -0.36%
FB $94.44 -2.60%

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs