FEDERAL COMMUNICATIONS COMMISSION
-.JULIUS GENACHOWSKI
CHAIRMAN
December 20,2011
The Honorable Fred Upton
Chairman
Committee on Energy and Commerce
Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Upton:
This responds to your letter ofDecember 7, 2011, concerning the Commission's
review ofAT&T's proposed acquisition ofT-Mobile. I appreciate your interest in the
transparency and predictability of Commission proceedings. As part ofour reform
agenda, the Commission has put significant emphasis on opening up Commission
processes and increasing predictability for the industries within our jurisdiction. We have
made great progress to date, and will continue to focus on unleashing innovation,
investment, and job creation, and promoting competition.
As you are aware, on Tuesday, November 22, consistent with our statutory
obligations under the Communications Act and following an extensive staffreview, I
circulated to my colleagues a draft order that would have referred AT&T's proposed
acquisition ofT-Mobile to a hearing before an Administrative Law Judge. Due to the
voluminous record and complicated issues in this matter, prior to circulation ofthe draft
hearing designation order ("HDO"), the Commission staffhad prepared a report - titled
"StaffFindings and Analysis" - with the intention that the report would be appended to
and published with the Commission's HDO.
Shortly after my staffand I notified AT&T and Deutsche Telekom ofthe decision
to circulate, the Applicants announced that, while they were continuing to pursue antitrust
clearance from the Department ofJustice and still sought FCC approval to close their
proposed deal, they were seeking to withdraw their license transfer applications from
consideration by the Commission. To the best ofour knowledge, this was an
unprecedented action. My staffand I are unaware ofany other case in which parties have
sought to withdraw license transfer applications following the circulation ofa proposed
Commission decision while continuing to pursue the same transaction.
Following AT&T's and Deutsche Telekom's announcement, my staffand I
consulted with each ofmy fellow Commissioners and their staffs about granting the
Applicants' request to withdraw and making the staffreport publicly available. AT&T's
445 12TH STREET S.W. WASHINGTON, D.C. 20554 • 202-418-1000
and Deutsche Telekom's request to withdraw their applications was subsequently granted
and the staffreport was released.
As we explained at the time, there were strong reasons to release the report.
AT&T and Deutsche Telekom filed their applications with the Commission knowing that
doing so would trigger a significant transaction review process that would consume
substantial public and private resources. The Commission received 50 petitions to deny
the transaction and extensive public comment from businesses, public interest groups,
and other interested third parties. The staffconducted hundreds ofmeetings and
reviewed and analyzed hundreds ofthousands ofpages ofdocuments, data, and other
submissions from the Applicants and third parties.
Based on this substantial record, Commission staffprepared a detailed report for
public release synthesizing and analyzing the extensive arguments and factual
submissions made in the record by the Applicants and numerous participants. Releasing
the report promoted fairness and transparency to the public, the participants in the
proceeding, and all interested parties. Furthermore, given the Applicants' public
statement that they were not abandoning the transaction and indeed planned to return to
the FCC for approval, the report contained information ofongoing relevance to the public
and all participants in the proceeding, including the Applicants. Lastly, unlike the
working draft HDO and other deliberative Commission documents that are not disclosed
to the public, the staffreport was both final and intended for release. 1
In view ofall ofthe foregoing, I concluded that it would not be appropriate to
suppress the completed report.
With respect to the spectrum screen, since 2003, the Commission has applied a
case-by-case analysis, rather than a blanket spectrum cap, when examining the potential
competitive impacts ofproposed transactions involving the aggregation ofspectrum. The
Commission developed an initial spectrum screen during its review in 2004 ofthe
Cingular/AT&T Wireless transaction to identify or "trigger" specific markets for further
competitive evaluation. It has no actionable effect; it is merely a tool used to narrow the
Commission's focus on markets where there may be a higher level ofconcern. The
screen is triggered when a transaction would aggregate more than approximately one 
third ofthe spectrum suitable for the service at issue (e.g., mobile broadband) in a
particular market in the hands ofone entity.
1 The confidential HDO that I circulated to my fellow Commissioners on November 22 was not the
Commission's final work product and was not intended for release until after a collaborative editing and
voting process (which, in the end, was not completed). The staffreport, by contrast, was complete when
circulated to the Commissioners and, unlike many staffanalyses, was intended for public release in that
form. The StaffFindings and Analysis is distinct from a draft denial ofa Section 271 application or
forbearance petition for the same reasons.
2
As the Commission has consistently stated, in formulating its screen it "considers
directly the input market ofspectrum that is suitable" for the services at issue?
Suitability is determined by whether the spectrum is capable ofsupporting mobile
service given its physical properties and the state ofequipment technology,
whether the spectrum is licensed with a mobile allocation and corresponding
service rules, and whether the spectrum is committed to another use that
effectively precludes its uses for [the] service [at issue].
3
Where there are significant changes in the marketplace that affect the practical
availability ofspectrum, such as new rules, standards adjustments, or an intervening
spectrum auction, the Commission adjusts its screen accordingly.
With respect to whether the spectrum screen treats all spectrum the same, in one
sense it does and in another it does not. First, the screen does not currently weight the
value - i.e., propagation or capacity characteristics - ofvarious spectrum bands despite
their obvious differences.
4
Second, with respect to certain spectrum - BRS spectrum, for
example - the Commission has found that "specific features associated with [certain]
spectrum," such as interference concerns, may result in all or part ofthat spectrum not
being "suitable" for mobile telephony/broadband services. 5
When the spectrum screen was first utilized in 2004, it was done without a formal
rulemaking process. And each adjustment to the original spectrum screen has occurred
during the course ofa transaction review, where parties have commented on potential
changes to the screen. This approach - which relies on case-by-case analysis rather than
formal rulemaking - has been consistently applied by the Commission since 2004. It has
been widely regarded as sensible because it enables the Commission to use the most
current data available to determine what spectrum should be considered in the screen.
2 Applications ofCellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent to
Transfer Control ofLicenses, Authorizations, and Spectrum Manager and De Facto Transfer Leasing
Arrangements and Petition for Declaratory Ruling that the Transaction is Consistent with Section 31O(b)(4)
ofthe Communications Act, WT Docket No. 08-95, Memorandum Opinion and Order and Declaratory
Ruling, 23 FCC Rcd 17444, 17473~53 (2008) ("Verizon Wireless-ALLTEL Order"). The Commission has
looked at suitable spectrum based on the service at issue. For example, in the Cingular-AT&T Wireless
transaction, the FCC looked at suitable spectrum used for mobile telephony service only, Applications of
AT&T Wireless Services, Inc. and Cingular Wireless Corporation, WT Docket No. 04-70, Memorandum
Opinion and Order, 19 FCC Rcd 21522, 21557-58~72 (2004) ("Cingular-AT&T Wireless Order"), while
in Verizon-ALLTEL, the Commission used the mobile telephony/broadband service market. Verizon
Wireless-ALLTEL Order, 23 FCC Rcd at 17473~53.
3 Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17473~53.
4 See, e.g., Implementation ofSection 6002(b) ofthe Omnibus Budget Reconciliation Act of 1993, Annual
Report and Analysis ofCompetitive Market Conditions with Respect to Mobile Wireless, including
Commercial Mobile Services, WT Docket No. 10-133, Fifteenth Report, 26 FCC Rcd 9664, 9827-28~281
(2011).
5 See, e.g., Sprint Nextel Corporation and Clearwire Corporation Applications for Consent to Transfer
Control ofLicenses, Leases, and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order,
23 FCC Rcd 17570, 17598-99~~67-70 (2008) ("Sprint Nextel-Clearwire Order").
3
Parties are aware ofthis and consistently file public comments on the spectrum screen
during transaction reviews. This case-by-case approach leads to extensive, timely, and
relevant public comment. The alternative risks creating unnecessary process and burdens
on interested parties.
This process is well-established and well-understood. Through it, the
Commission has updated its screen twice in the last four years.
6
Indeed, AT&T,
Deutsche Telekom, and various other stakeholders all asked the Commission to make
changes to its spectrum screen within its proceeding on AT&T's proposed acquisition of
T-Mobile.
7
Thank you for taking the time to inquire about these important topics. The
Commission will continue to operate in an open and transparent manner in order to serve
the American public.
Sincerely,
..
Julius Genachowski
6 See Sprint Nextel-Clearwire Order, 23 FCC Red at 17600~74; Applications ofAT&T Inc. and Dobson
Communications Corporation For Consent to Transfer Control ofLicenses and Authorizations, WT Docket
No. 07-153, Memorandum Opinion and Order, 22 FCC Red 20295, 20312-15~~30-35 (2007).
7 See Applications ofAT&T Inc. and Deutsche Telekom AG for Consent To Assign or Transfer Control of
Licenses and Authorizations, Description ofTransaction, file no. 0004669383, Description ofTransaction,
Public Interest Showing, and Related Demonstrations (filed April 21, 2011) at 77-78; see also AT&T Inc.
and Deutsche Telekom AG Seek FCC Consent to the Transfer ofControl ofthe Licenses and
Authorizations Held By T-Mobile USA, Inc. and its Subsidiaries to AT&T Inc., WT Docket No. 11-65
("AT&T-T-Mobile Docket'), Metro PCS Communications, Inc. and NTELOS Inc. Reply to Joint
Opposition (June 20, 2011) at 34; AT&T-T-Mobile Docket, Green Flag Wireless, LLC Petition to Deny
(May 31, 20II) at 5-6.
4
FEDERAL COMMUNICATIONS COMMISSION
.JULIUS GENACHOWSKI
CHAIRMAN
December 20,2011
The Honorable Greg Walden
Chairman
Subcommittee on Communications and Technology
Committee on Energy and Commerce
Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Upton:
This responds to your letter ofDecember 7,2011, concerning the Commission's
review ofAT&T's proposed acquisition ofT-Mobile. I appreciate your interest in the
transparency and predictability of Commission proceedings. As part ofour reform
agenda, the Commission has put significant emphasis on opening up Commission
processes and increasing predictability for the industries within our jurisdiction. We have
made great progress to date, and will continue to focus on unleashing innovation,
investment, and job creation, and promoting competition.
As you are aware, on Tuesday, November 22, consistent with our statutory
obligations under the Communications Act and following an extensive staffreview, I
circulated to my colleagues a draft order that would have referred AT&T's proposed
acquisition ofT-Mobile to a hearing before an Administrative Law Judge. Due to the
voluminous record and complicated issues in this matter, prior to circulation ofthe draft
hearing designation order ("HDO"), the Commission staffhad prepared a report - titled
"StaffFindings and Analysis" - with the intention that the report would be appended to
and published with the Commission's HDO.
Shortly after my staffand I notified AT&T and Deutsche Telekom ofthe decision
to circulate, the Applicants announced that, while they were continuing to pursue antitrust
clearance from the Department ofJustice and still sought FCC approval to close their
proposed deal, they were seeking to withdraw their license transfer applications from
consideration by the Commission. To the best ofour knowledge, this was an
unprecedented action. My staffand I are unaware of any other case in which parties have
sought to withdraw license transfer applications following the circulation ofa proposed
Commission decision while continuing to pursue the same transaction.
Following AT&T's and Deutsche Telekom's announcement, my staffand I
consulted with each ofmy fellow Commissioners and their staffs about granting the
Applicants' request to withdraw and making the staffreport publicly available. AT&T's
445 12Tl-1 STREET S.W. WASHINGTON, D.C. 20554 • 202-418-1000
and Deutsche Telekom's request to withdraw their applications was subsequently granted
and the staffreport was released.
As we explained at the time, there were strong reasons to release the report.
AT&T and Deutsche Telekom filed their applications with the Commission knowing that
doing so would trigger a significant transaction review process that would consume
substantial public and private resources. The Commission received 50 petitions to deny
the transaction and extensive public comment from businesses, public interest groups,
and other interested third parties. The staffconducted hundreds ofmeetings and
reviewed and analyzed hundreds ofthousands ofpages ofdocuments, data, and other
submissions from the Applicants and third parties.
Based on this substantial record, Commission staffprepared a detailed report for
public release synthesizing and analyzing the extensive arguments and factual
submissions made in the record by the Applicants and numerous participants. Releasing
the report promoted fairness and transparency to the public, the participants in the
proceeding, and all interested parties. Furthermore, given the Applicants' public
statement that they were not abandoning the transaction and indeed planned to return to
the FCC for approval, the report contained information ofongoing relevance to the public
and all participants in the proceeding, including the Applicants. Lastly, unlike the
working draft HDO and other deliberative Commission documents that are not disclosed
to the public, the staffreport was both final and intended for release.!
In view ofall ofthe foregoing, I concluded that it would not be appropriate to
suppress the completed report.
With respect to the spectrum screen, since 2003, the Commission has applied a
case-by-case analysis, rather than a blanket spectrum cap, when examining the potential
competitive impacts ofproposed transactions involving the aggregation ofspectrum. The
Commission developed an initial spectrum screen during its review in 2004 ofthe
Cingular/AT&T Wireless transaction to identify or "trigger" specific markets for further
competitive evaluation. It has no actionable effect; it is merely a tool used to narrow the
Commission's focus on markets where there may be a higher level ofconcern. The
screen is triggered when a transaction would aggregate more than approximately one 
third ofthe spectrum suitable for the service at issue (e.g., mobile broadband) in a
particular market in the hands ofone entity.
I The confidential HDO that I circulated to my fellow Commissioners on November 22 was not the
Commission's final work product and was not intended for release until after a collaborative editing and
voting process (which, in the end, was not completed). The staffreport, by contrast, was complete when
circulated to the Commissioners and, unlike many staffanalyses, was intended for public release in that
form. The StaffFindings and Analysis is distinct from a draft denial ofa Section 271 application or
forbearance petition for the same reasons.
2
As the Commission has consistently stated, in formulating its screen it "considers
directly the input market ofspectrum that is suitable" for the services at issue?
Suitability is determined by whether the spectrum is capable ofsupporting mobile
service given its physical properties and the state ofequipment technology,
whether the spectrum is licensed with a mobile allocation and corresponding
service rules, and whether the spectrum is committed to another use that
effectively precludes its uses for [the] service [at issue].3
Where there are significant changes in the marketplace that affect the practical
availability ofspectrum, such as new rules, standards adjustments, or an intervening
spectrum auction, the Commission adjusts its screen accordingly.
With respect to whether the spectrum screen treats all spectrum the same, in one
sense it does and in another it does not. First, the screen does not currently weight the
value - i.e., propagation or capacity characteristics - ofvarious spectrum bands despite
their obvious differences.
4
Second, with respect to certain spectrum - BRS spectrum, for
example - the Commission has found that "specific features associated with [certain]
spectrum," such as interference concerns, may result in all or part ofthat spectrum not
being "suitable" for mobile telephonylbroadband services. 5
When the spectrum screen was first utilized in 2004, it was done without a formal
rulemaking process. And each adjustment to the original spectrum screen has occurred
during the course ofa transaction review, where parties have commented on potential
changes to the screen. This approach - which relies on case-by-case analysis rather than
formal rulemaking - has been consistently applied by the Commission since 2004. It has
been widely regarded as sensible because it enables the Commission to use the most
cunent data available to determine what spectrum should be considered in the screen.
2 Applications ofCellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent to
Transfer Control ofLicenses, Authorizations, and Spectrum Manager and De Facto Transfer Leasing
Arrangements and Petition for Declaratory Ruling that the Transaction is Consistent with Section 31 O(b)(4)
ofthe Communications Act, WT Docket No. 08-95, Memorandum Opinion and Order and Declaratory
Ruling, 23 FCC Rcd 17444, 17473~53 (2008) (" Verizon Wireless-ALLTEL Order"). The Commission has
looked at suitable spectrum based on the service at issue. For example, in the Cingular-AT&T Wireless
transaction, the FCC looked at suitable spectrum used for mobile telephony service only, Applications of
AT&T Wireless Services, Inc. and Cingular Wireless Corporation, WT Docket No. 04-70, Memorandum
Opinion and Order, 19 FCC Rcd 21522, 21557-58~72 (2004) ("Cingular-AT&T Wireless Order"), while
in Verizon-ALLTEL, the Commission used the mobile telephony/broadband service market. Verizon
Wireless-ALLTEL Order, 23 FCC Rcd at 17473~53.
3 Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17473~53.
4 See, e.g., Implementation of Section 6002(b) ofthe Omnibus Budget Reconciliation Act of 1993, Annual
Report and Analysis ofCompetitive Market Conditions with Respect to Mobile Wireless, including
Commercial Mobile Services, WT Docket No. 10-133, Fifteenth Report, 26 FCC Rcd 9664, 9827-28~281
(2011).
5 See, e.g., Sprint Nextel Corporation and Clearwire Corporation Applications for Consent to Transfer
Control ofLicenses, Leases, and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order,
23 FCC Rcd 17570, 17598-99~~67-70 (2008) ("Sprint Nextel-Clearwire Order").
3
Parties are aware ofthis and consistently file public comments on the spectrum screen
during transaction reviews. This case-by-case approach leads to extensive, timely, and
relevant public comment. The alternative risks creating unnecessary process and burdens
on interested parties.
This process is well-established and well-understood. Through it, the
Commission has updated its screen twice in the last four years.
6
Indeed, AT&T,
Deutsche Telekom, and various other stakeholders all asked the Commission to make
changes to its spectrum screen within its proceeding on AT&T's proposed acquisition of
T-Mobile.
7
Thank you for taking the time to inquire about these important topics. The
Commission will continue to operate in an open and transparent manner in order to serve
the American public.
Sincerely,
Julius Genachowski
6 See Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17600~74; Applications ofAT&T Inc. and Dobson
Communications Corporation For Consent to Transfer Control ofLicenses and Authorizations, WT Docket
No. 07-153, Memorandum Opinion and Order, 22 FCC Rcd 20295,203 12-15~~30-35 (2007).
7 See Applications ofAT&T Inc. and Deutsche Telekom AG for Consent To Assign or Transfer Control of
Licenses and Authorizations, Description ofTransaction, file no. 0004669383, Description ofTransaction,
Public Interest Showing, and Related Demonstrations (filed April 21, 20 II) at 77-78; see also AT&T Inc.
and Deutsche Telekom AG Seek FCC Consent to the Transfer ofControl ofthe Licenses and
Authorizations Held By T-Mobile USA, Inc. and its Subsidiaries to AT&T Inc., WT Docket No. 11-65
("AT&T-T-Mobile Docket"), Metro PCS Communications, Inc. and NTELOS Inc. Reply to Joint
Opposition (June 20, 2011) at 34; AT&T-T-Mobile Docket, Green Flag Wireless, LLC Petition to Deny
(May 31,2011) at 5-6.
4