Federal Communications Commission da 14-349 Before the Federal Communications Commission

Flat Wireless Commitments

183. 
     We noted above that there appears to be at least a potential for AT&T to have the ability to influence Flat’s affairs.⁴² AT&T states that Cricket has negotiated a definitive agreement to sell its interests in Flat and is prepared to move forward with the sale, but that Cricket and Flat currently are in arbitration and the arbitrator has stayed the disposition of Cricket’s interests in Flat pending resolution of the arbitration.⁴³ Leap now anticipates that Cricket will consummate the sale of its interests in Flat in April 2014.⁴⁴
     
184. 
     With regard to Flat Wireless, AT&T commits as follows: In the event that Cricket Communications, Inc. still holds any interest in Flat at the consummation of the AT&T/Leap transaction, AT&T will immediately deliver written notice to Flat notifying it, its Board of Managers and its Members that, for so long as Leap, Cricket, or any of its affiliates remains a Member of Flat (hereinafter “Cricket Members”), neither AT&T nor any Cricket Member shall exercise any right that it may have under Article 6, Article 12, or Article 13 of the Amended and Restated Company Agreement of Flat Wireless, LLC or elsewhere to: (1) acquire any additional interest in Flat, by call under Section 13.07 of the Flat Wireless LLC Agreement or otherwise, except in connection with one or more transactions subject to review and approval by the Federal Communications Commission pursuant to the processes outlined in 47 C.F.R. §§ 1.948 and 63.24; (2) choose and determine a Manager of Flat or place or cause to be placed any AT&T employee, representative or agent on Flat’s Board of Managers; (3) receive or review any confidential and or competitively sensitive information pertaining to Flat; provided however, that AT&T shall be entitled to receive such information as is necessary for accounting and tax purposes and for Cricket to sell its interest in Flat, including a statement of its allocated share of income, gains, losses, deductions, and credits for each taxable year, on the condition that such information is used solely for those purposes.⁴⁵ Finally, to the extent that the AT&T/Leap transaction is consummated prior to Cricket’s sale of its interest in Flat, AT&T commits to use reasonable best efforts to cause Cricket to sell its interest in Flat as soon as practicable thereafter.⁴⁶
     
185. 
     We conclude that AT&T’s commitments address our concerns that its ownership interest in Flat will give it the ability to influence Flat’s affairs or to reduce Flat’s incentive to act as a competitor to AT&T. Accordingly, we need not give further consideration to the interests of Flat Wireless in reviewing the transaction.
     

1. Progress Reports

186. 
     For two years following the date of merger close, AT&T will file with the Commission a quarterly detailed report on the status of the implementation of these commitments and the migration of Leap’s customers.⁴⁷ If the network deployment commitments are not met within the two year reporting period, this reporting requirement will be extended with respect to those deployment commitments until such time as both deployment commitments are fully met or waived by the FCC.⁴⁸ Each such report will be due 30 days following the end of the calendar quarter covered by the report, and the first such report will cover the period from the merger closing thru the end of the first full quarter thereafter.⁴⁹
     
187. 
     We will condition consent to the proposed transaction on AT&T complying with this quarterly reporting obligation. AT&T’s submission of these reports will allow Commission staff to monitor the progress of AT&T’s efforts.
     

8. Balancing The Public Interest BeNEFITS and the HArms

188. 
     In sum, we find that the transaction as proposed has the potential to cause some competitive and other public interest harms in several local markets, as well as to value-conscious consumers generally. Moreover, although we find some potential public interest benefits likely to arise from the transaction in terms of spectral efficiency, these potential benefits by themselves are insufficient to outweigh the potential harms.
     
189. 
     However, we find that considering AT&T’s various commitments, involving spectrum divestitures, the offering of certain rate plans, LTE network deployment, roaming, and device trade-in and trade-in credits for certain groups of current Leap customers, all of which we impose as conditions to our approval, in conjunction with the public interest benefits we find will likely arise from the transaction, there is sufficient evidence on this record for us to conclude that Applicants have met their burden of demonstrating that the likely public interest benefits outweigh the likely public interest harms, such that we are able to approve the proposed transaction.
     

9. ordering clauses

190. 
     ACCORDINGLY, having reviewed the Applications and the record in these matters, IT IS ORDERED that, pursuant to sections 4(i) and (j), 214, 303(r), 309, and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 214, 303(r), 309, 310(d), the applications for transfer of control of Cricket License Company, LLC, Leap Wireless International, Inc., and STX Wireless License, LLC to AT&T, Inc. and the application to assign Lower 700 MHz Band A Block license WQJQ707 from Cricket License Company, LLC to Leap Licenseco Inc. are GRANTED to the extent specified in this Memorandum Opinion and Order and subject to the conditions specified herein.
     
191. 
     IT IS FURTHER ORDERED that the above grant shall include authority for the transfer or assignment of any applications regarding the Leap assets that are pending at the time of consummation as well as any licenses or authorizations that may have inadvertently been omitted from the application forms filed by the Applicants.
     
192. 
     IT IS FURTHER ORDERED that, pursuant to Sections 4(i) and (j), 303(r), 309, and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303(r), 309, 310(d), the Petitions to Deny filed by Broadvox-CLEC, LLC; David K. Smith; The Greenlining Institute; NTCH, Inc.; Public Knowledge, Consumer Action, and the Writers Guild of America, West; and Youghiogheny Communications, LLC are DENIED for the reasons stated herein.
     
193. 
     IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 303(r), 309, and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), (j), 303(r), 309, and 310(d), the request for conditions in the Petitions or Comments filed by the Broadvox-CLEC, LLC; Competitive Carriers Association; David K. Smith; The Greenlining Institute; Infrastructure Networks, Inc.; NTCH, Inc.; Public Knowledge, Consumer Action, and the Writers Guild of America, West; The Rural Wireless Association, Inc.; and Youghiogheny Communications, LLC are DENIED for the reasons stated herein.
     
194. 
     IT IS FURTHER ORDERED that this Order SHALL BE EFFECTIVE upon release. Petitions for reconsideration under section 1.106 of the Commission's rules, 47 C.F.R. § 1.106, may be filed within thirty days of the date of release of this Memorandum Opinion and Order.
     
195. 
     This action is taken under delegated authority pursuant to sections 0.51, 0.131, 0.261, and 0.331 of the Commission’s Rules, 47 C.F.R. §§ 0.51, 0.131, 0.261, and 0.331.
     

Roger C. Sherman

Acting Chief

Wireless Telecommunications Bureau

Chief

Applications for consent to the transfer of control of AWS-1, PCS, and Common Carrier Fixed Point to Point licenses:

Application for consent to assignment of a 700 MHz A Block license:

Applications for consent to the transfer of control of international section 214 authorizations:

Competitive Carriers Association

David K. Smith

The Greenlining Institute

Infrastructure Networks, Inc.

NTCH, Inc.

Public Knowledge, Consumer Action, and the Writers Guild of America, West

The Rural Wireless Association, Inc.

Youghiogheny Communications, LLC
Opposition
AT&T, Inc. and Leap Wireless International, Inc.
Replies
Broadvox-CLEC, LLC

Competitive Carriers Association

David K. Smith

Infrastructure Networks, Inc.

NTCH, Inc.

Public Knowledge, Consumer Action, and the Writers Guild of America, West

The Rural Wireless Association, Inc.

Youghiogheny Communications, LLC