Small Carriers Push For Roaming Conditions on Leap Deal

WASHINGTON (The Deal) -- Small wireless carriers are mounting an 11th-hour push to convince the Federal Communications Commission to require that AT&T (T) charge "reasonable" roaming 4G rates as a condition of approving AT&T's acquisition of prepaid mobile phone carrier Leap Wireless International (LEAP).

AT&T Inc. announced on July 12, a $15 per share deal to acquire Leap, which sells wireless service to low-income and budget-minded consumers under the Cricket brand. Coupled with Leap's $2.8 billion in net debt, the deal values the target at roughly $4 billion.

Last week representatives from the Competitive Carriers Association met with officials of the FCC's general counsel's office and the wireless telecommunications bureau to press the case for merger conditions that would address what the group, which represents rural and regional wireless carriers, said are exorbitant rates AT&T and Verizon Wireless charge smaller carriers for roaming, particularly on their high-speed 4G LTE networks.

The group, along with public advocacy groups and some individual small wireless carriers, is asking the FCC to condition approval of the Leap acquisition on an AT&T commitment either to offer 3G and 4G LTE roaming services on the same terms that competitors negotiate with Leap for at least the next four years, or to provide roaming terms no less favorable than those Leap is entitled to if the merger is broken up. (The companies' merger agreement includes a three-year roaming agreement for Leap if the merger falls apart.)

Finally, the rural and regional carriers want the FCC to make AT&T divest spectrum in markets where the merger would put the combined company over the commission's local spectrum cap.

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