Gallant said AT&T's filing reinforced his view that the FCC is likely to approve the deal. "The main risk we saw was spectrum aggregation in some markets," Gallant wrote. But that issue can be dealt with through divestitures in specific markets.
Previously, Gallant noted that the regulators have been focused on preserving competition between the four major carriers -- AT&T, T-Mobile (TMUS), Sprint Nextel (S) and Verizon (VZ) -- and have disregarded competition from Leap and Metro PCS when it comes to measuring the state of play between the four large players. In rejecting the proposed combination of AT&T and T-Mobile two years ago, the Department of Justice and the FCC concluded that regional carriers like Leap were not meaningful competitors to AT&T.
For its part, AT&T says it is committed to the prepaid market and has the capacity to improve the services Cricket already offers.
"Leap's limited network footprint allows it to offer facilities-based services to less than one-third of the U.S. population, and Leap relies on other wireless carriers for roaming and [other] services outside of its network footprint," the company said. "Leap's financial resources and limited spectrum depth make it uneconomic to upgrade its current 3G CDMA platform to LTE throughout its network; to date it has deployed LTE technology in only 11 metropolitan areas covering approximately 21 million people and has little prospect today of financing significant further upgrades to cover the remainder of its network footprint."AT&T also noted that Leap experienced a 22% drop in the number of customers between March 31, 2012 and June 30, 2013. -- Written by Bill McConnell In Washington
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