The U.S. Federal Communications Commission has approved AT&T's US$1.2 billion acquisition of competitor Leap Wireless, which sells prepaid mobile service under the Cricket brand.
The FCC on Thursday cleared the transaction subject to several conditions. Among other things, AT&T agreed to sell off some wireless spectrum, deploy LTE service on Leap's unused spectrum and deploy LTE in six south Texas markets within 18 months.
AT&T announced plans to acquire Leap in July. Mobile analysts expected Leap as the next carrier to be sold after SoftBank in 2013 bought No. 3 carrier Sprint for $21.6 billion, a deal allowing Sprint to acquire Clearwire. In early 2013, No. 4 T-Mobile US acquired MetroPCS, another regional budget carrier.
Leap's Cricket service has about 4.6 million customers.
Public Knowledge, a digital rights group, questioned the deal, saying the FCC needs to address problems with spectrum holdings being consolidated by a handful of mobile carriers.
"The removal of Leap ... from the marketplace is troubling, because its low-cost, prepaid price plans are particularly attractive to low-income consumers," John Bergmayer, senior staff attorney at Public Knowledge, said in a statement. "While, among other things, AT&T has committed to offering a $40, unlimited plan for feature phones for 18 months, the best guarantee of consumer protection is competition, not promises."
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.