AT&T rural carrier buyout approved

The Department of Justice approved AT&T Inc.'s $2.8 billion purchase of Dobson Communications Corp. on Tuesday, but will require the new company to divest assets in five states to protect competition.

AT&T Inc., one of the nation's two largest wireless service providers, announced it was buying Dobson, a rural service provider, last June for about $13 per share. The purchase, which still requires approval from the Federal Communications Commission, would add 1.7 million customers to AT&T's 63 million subscribers.

Oklahoma City-based Dobson is the nation's ninth-largest carrier, and does business under the Cellular One brand. The company has provided roaming services to AT&T since 1990.

The seven markets of concern are in Kentucky, Oklahoma, Missouri, Pennsylvania and Texas. The Justice Department said as originally proposed, the deal would have resulted in higher prices, lower quality and decreased investment in those areas.

The divestitures will "preserve competition for residents" and "ensure that these consumers continue to enjoy the benefits of competition," said Thomas Barnett, the DOJ's antitrust division chief.

The department noted that Dobson and AT&T are the only competitors in some markets.

DOJ also required the divestiture of the Cellular One brand, noting a Cellular One licensee located in Texas and Pennsylvania is the primary wireless competitor to AT&T. Without the divestiture, AT&T would be able to prevent the licensee from using the name.