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A classified document by Arnold & Porter LLP, a lawfirm working on behalf of AT&T was posted on the FCC’s website recently, and quickly snatched up by Gizmodo before it disappeared. In the leaked document are details about AT&T’s planned LTE network rollout, as well as some very specific numbers about the cost of such a thing, and some new information about the T-Mobile merger. Unfortunately, for AT&T, the now public nature of this document has shown them in a rather bad light.
As we all know, AT&T has put forth lack of wireless spectrum as a main selling point in swaying regulators to approve the merger. The documents from their legal team, however, seem to show a rather different story. The gist of the document, which you can find at the bottom of this post, is that AT&T currently plans to cover 70 million people with LTE coverage by the end of this year. It will then increase to 170 million by the end of 2012, and 250 million by the end of 2013. Their intention is to upgrade over 44,000 nodes to LTE in phases. 8000 this year, 16,000 next year, and 20,000 in 2013. That’s not the whole 97% of America that they’re promising should the T-Mo merger take place. That number, 97%, promised by AT&T should they acquire T-Mobile is in fact what will happen over about 6 years, should the deal be approved. That means should the deal close in 2012, it would not be until 2018 that we see that 97% coverage.
What does this mean regarding T-Mobile then? According to the documents, the merger makes the cost of that LTE rollout “more palatable” for AT&T executives. It seems AT&T’s marketing department is at odds with management on this one. The marketing gurus want that 97% coverage, no matter what. But as many things do, it comes down to money. AT&T execs don’t want to spend the money on upgrading the network without the merger. Why not? The rural population. If you live in rural areas, you’re not worth AT&T’s time as they can’t recoup the cost of giving you service. With the T-Mobile towers under their control, the cost becomes “more palatable”.
As it stands, without the T-Mobile merger AT&T will still roll out an LTE network to 80% of the US. The final 17% that they don’t want to cover, according to the report, would cost an additional $3.8 billion. Yes, AT&T just told you that they’re far more interested in your money than providing you with quality service.
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