DoJ restricts Liberty and AT&T in $1.95bn Puerto Rico deal
Puerto Rico’s WorldNet Telecommunications is to take on some of AT&T and Liberty’s business on the island in order to make way for a takeover deal.
AT&T agreed in October 2019 to sell its wireline and wireless operations in the US territories for US$1.95 billion.
The US Department of Justice (DoJ) said it is requiring both companies to offload assets to WorldNet in order for Liberty to proceed with its acquisition in both Puerto Rico and the US Virgin Islands.
The DoJ complained the deal “would have eliminated competition for critical fibre-optic-based telecommunications services that businesses in Puerto Rico rely on every day”, according to assistant attorney general Makan Delrahim (pictured).
“Today’s settlement will ensure that businesses throughout Puerto Rico continue to benefit from vigorous competition in the provision of these services.”
The DoJ approved WorldNet as the acquirer of the fibre-based Columbus network in the metropolitan San Juan area that Liberty acquired as part of its purchase of Cable & Wireless Communications in 2016.
WorldNet will also take over other assets as part of the DoJ-mandated deal, including fibre facilities and IRUs across Puerto Rico. It will take over retail fibre-based enterprise customer accounts served by Liberty today, with limited exceptions and it will have the right to pull fibre through Liberty’s conduit and attach fibre to Liberty’s telephone poles.
Finally, WorldNet will be able to buy segments of AT&T’s aerial fibre-based core network.
The DoJ said: “The divestiture will place WorldNet in the position to become a strong competitor in the provision of fibre-based connectivity and telecommunications services to enterprise customers throughout Puerto Rico.”
It said that Liberty and AT&T are two of the three largest wireline telecommunications providers in Puerto Rico and own two of the three most extensive fibre-based network infrastructures on the island.
A complaint to the DoJ alleged that competition between Liberty and AT&T has resulted in lower prices and higher-quality services for these customers, but that “the combination of Liberty and AT&T would leave many customers with only one alternative and others with no competitive choice at all, likely resulting in increased prices and lower-quality services for enterprise customers across Puerto Rico”.