AT&T Holiday Reprieve: FCC Approves Deal to Buy Qualcomm Spectrum

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Mike Blake / Reuters

A Qualcomm sign is seen at one of Qualcomm's numerous buildings located on its San Diego Campus February 7, 2011.

Rebounding from a humbling, all but forced capitulation in the face of fierce government opposition to its proposed purchase of T-Mobile USA, AT&T just won FCC approval to snap up $1.93 billion in Qualcomm spectrum barely three days later. The AT&T-T-Mobile deal, by contrast, was worth an estimated $39 billion.

The FCC cleared the sale yesterday, saying it covers some 300 million people (the population of the U.S.) and that AT&T isn’t allowed to use the spectrum in ways that would conflict with other wireless carries, reports Bloomberg.

(MORE: After AT&T-T-Mobile, Are Verizon’s Cable Spectrum Deals on the Chopping Block?)

According to the FCC, the deal “would not result in competitive harm that would outweigh the public interest benefits of this transaction,” thanks in part to conditions imposed by the government agency.

The deal strikes a very different tone from the position the government took with the AT&T-T-Mobile deal. When AT&T finally dropped its bid to purchase T-Mobile on December 19, it was less than flattering of the government’s position:

“The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry,” wrote AT&T in a statement earlier this week. “It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.”

While the T-Mobile purchase would have been an exponentially greater coup for AT&T, the FCC’s approval of the Qualcomm spectrum sale represents what AT&T has described as a “critical” purchase for its ability to meet escalating demand for bandwidth, as tablet and smartphone sales–and consumer data usage demands–increase.

MORE: Deutsche Telekom and T-Mobile USA: What Happens Next?