The DOJ has announced that it reached a settlement with AT&T that will require the communications company to divest assets in seven rural markets in Kentucky, Oklahoma, Missouri, Pennsylvania and Texas, as a condition to its planned US$2.8 billion acquisition of Dobson Communications. AT&T is the largest wireless telecommunications services provider in the United States, serving more than 63 million subscribers; Dobson is the ninth largest provider, serving about 1.7 million subscribers.

In a complaint filed simultaneously with the proposed settlement agreement, the DOJ alleged that the acquisition as planned would have harmed competition by concentrating the number of suppliers of mobile wireless telecommunications services in each of the designated markets. In three rural service areas in Kentucky and Oklahoma, AT&T and Dobson are the only competitors because each holds one of only two cellular licenses. In two other service areas in Texas, AT&T holds a minority interest in Dobson’s primary competitor. As part of the settlement, AT&T has agreed to divest the rights to the “Cellular One” brand name held by Dobson, which owns Cellular One Properties LLC. Cellular One Properties licenses the Cellular One brand and promotes its services and trademarks nationwide. The DOJ found that in two markets in Pennsylvania and Texas, a Cellular One licensee is the primary competitor to AT&T.

According to the complaint, the acquisition as planned would have resulted in higher prices, lower quality and diminished investment in improvements to network infrastructures. The proposed settlement has been published to the Federal Register along with the DOJ’s competitive impact statement, and can be approved only after a 60-day period for public comment.