Prepaid Issue Holds Up AT&T's Alltel Buy

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**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q2 2013.**

AT&T's purchase of Atlantic Tele-Network's (ATNI) Alltel retail operations in January has been put on hold by the Federal Communications Commission. The FCC says it has put a halt on the informal 180-day review period, even though they were 175 days into the investigation, The Verge reported.

The problem arose when the FCC didn't get enough information regarding how AT&T will help Alltel's prepaid customers switch to the new network.

AT&T agreed to pay $780 million for Alltel assets that include spectrum, licenses, retail locations and customers. The carrier already owns a large part of Alltel.

If the acquisition is eventually approved, all of Alltel's old assets will be owned by either AT&T or Verizon, which acquired a large part of Alltel in 2008. Alltel subscribers would have to move from a CDMA network to either GSM or LTE.

In a statement by the FCC, AT&T appears to have constructed a plan for anyone on Alltel's contract-based postpaid plan; however, of the 591,000 Alltel customers, only 182,000 are prepaid. The FCC has not explained any further problems with the deal in its statement. The 180-day approval clock will restart once the statement has an explanation.

Meanwhile, AT&T responded: "AT&T is extremely disappointed at the FCC delay today on this small transaction. AT&T is ready, willing and able to make significant network investments in these rural territories to bring HSPA+ and LTE services to Allied's customers, an investment that will not occur but for this transaction. AT&T has actively worked to address FCC concerns and will continue to work with the Commission until all issues are resolved."

"As a matter of corporate policy, we do not comment on the status of pending regulatory matters," said Michael T. Prior, CEO of ATN, in a prepared statement. "We continue to expect that the sale of our domestic retail wireless business will obtain the necessary regulatory approval and be completed in a timely manner."

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