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AT&T Puts a Price Tag on its Cost to Roll Out LTE Without T-Mobile

by Sean P. Aune | August 12, 2011August 12, 2011 4:15 pm PDT

AT&T has been trying to get the Federal Communications Commission (FCC) excited about its potential merger with T-Mobile by promising that it would roll 4G LTE service out to a lot more of the country if it happens.  The plans without the help of the magenta-hued company call for Big Blue to get LTE out to 80 percent of the country, but in their proposals as to why this merger is a good thing for consumers, they said that the additional spectrum they would gain would allow them to cover an additional 55 million Americans in rural locales, bringing the total to 97 percent of the country.  This has been one of the key points that people who support the merger continually cite as why it should be allowed to happen despite opposition being lodged by entities such as Sprint.

Apparently AT&T has decided this is the banner to rally around as a letter filed with the FCC, which was not as heavily redacted as most, stated that without T-Mobile’s infusion of assets, the rollout of 4G to the additional 55 million Americans would cost them $3.8 billion, and that it was not a cost that it was willing to absorb.  “AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified,” AT&T counsel Richard Rosen said in the letter.  He went on to add, “Because of the significant cost of deploying LTE beyond the Plan of Record, the budgetary pressure that had already been created by accelerating the 80 percent LTE deployment by a full year, and the additional capital expenditures for the basic prep work required for a limited number of sites, AT&T decided not to move forward with this additional work.”

The document has since been pulled, but the quotes were captured by Wireless Week.  The publication reached out to AT&T and received the following statement from spokeswoman Margaret Boles:

There is no real news here.  The confidential information in the latest letter is fully consistent with AT&T’s prior filings.  It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97% of the population following our merger with T-Mobile.  Without this merger, AT&T could not make this expanded commitment.  This merger will unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy.

On the contrary, there is a story here in the fact that AT&T has essentially set up a carrot-on-a-stick scenario with the FCC. “You let us have what we want, and we promise to give you something for the country. Don’t let us have it, we won’t spend the money to do it.”  While this was already fairly well-known, what we didn’t have was the dollar amount nor the thought process behind how they had reached these conclusions.  Essentially AT&T can walk away from the deal if it gets denied by the government saying how it tried to help the consumers, but now it just won’t be possible.

Is it true that they wouldn’t be able to do this extra rollout without the aid of T-Mobile in its assets?  Who knows.  Would it make it easier?  Probably.  Is it worth merging these two companies together for?  That is a question for each person to answer on their own.

What do you think?  Should AT&T be allowed to buy T-Mobile if it means LTE rolling out to more people?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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