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AT&T’s integration of its $39 billion acquisition of T-Mobile USA may be slowed down by a network already overloaded by users of Apple’s iPhone, a Sanford C. Bernstein & Co. analyst said.

The deal will give AT&T new airwaves for its planned high-speed, fourth-generation network. T- Mobile’s subscribers, who are now using those airwaves, will eventually be moved to AT&T’s network, AT&T said. “That’s probably the most ambitious piece of this,” said Craig Moffett, an analyst at Sanford C. Bernstein who rates AT&T “market perform” and doesn't own the shares. “That network is already struggling and has been ever since they landed the iPhone, so that network isn't ready to dump a bunch of T-Mobile customers onto it.” AT&T expects $7 billion in integration costs over the next three years, said John Stankey, president of AT&T Business Solutions. To free up capacity on the 3G network, used by iPhone customers, for T-Mobile users, AT&T will have to wait until subscribers move to the planned 4G network, a process that may take three to five years, Moffett said. The combined company will update its towers to allow customers to use their second- and third-generation phones across both networks, Stankey said. The higher-speed, 4G long- term-evolution network that AT&T plans to build will cover 95 percent of the U.S., the executive said. All subscribers will see the benefits from the larger network -- which will increase the number of cell sites in the overcrowded New York and San Francisco markets by as much as 35 percent -- within two years, Stankey said. The companies use the same network technologies, which makes the integration easier, he said.

[Commentary] Who loses in the AT&T|T-Mobile deal? Here's the list:

The biggest losers of this deal are going to be the consumers. While AT&T and T-Mobile are going to try to spin it as a good deal to combine wireless spectrum assets, the fact is, T-Mobile USA is now out of the market. T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans as it has tried to compete with its larger brethren. The competition has kept the prices in the market low enough. This has worked well for U.S. consumers. With the merger of AT&T and T-Mobile, the market is now reduced to three national players: AT&T, Verizon and Sprint. Net-net, U.S. consumers are going to lose.

Phone Handset Makers, Sprint, Network Equipment Suppliers, and Google which had a great partner in T-Mobile for its Android OS-based devices. Now the company will be beholden to two massive phone companies — Verizon and AT&T — who are going to try to hijack Android to serve their own ends.

It doesn't matter how you look at it; this is just bad for wireless innovation, which means bad news for consumers. T-Mobile has been pretty experimental and innovative: It has experimented with newer technologies such as UMA, built its own handsets and has generally been a more consumer-centric company. AT&T, on the other hand, has the innovation of a lead pencil and has the mentality more suited to a monopoly: a position it wants to regain.

Broadcasters have told the Federal Communications Commission to do some more looking before it makes its wireless spectrum leap.

In comments on the FCC's spectrum proceeding, the National Association of Broadcasters outlined a five-point plan it said was the right way for the FCC to proceed:
1) assess how the wireless industry could use its spectrum from efficiently;
2) finish and put out for comment a spectrum use study;
3) weigh the costs of shifting spectrum against the potential harms to consumer and the public interest;
4) look for other ways to expand broadband access, and
5) consider and get comment on repacking and incentive auctions before it acts.

NAB was responding to the FCC's proposal to reclassify broadcast spectrum as dual use, broadcast and wireless; have broadcasters share channels, and make improvements to VHF band reception, which is inferior to UHF for DTV. Filing its comments as the combined NAB and the Association for Maximum Service Television, the spectrum lobby group that NAB voted to incorporate into itself, NAB reiterated that it does not oppose incentive auctions, but that the FCC needs to look more broadly and consider all viewers, not just over-the-air viewers.

[Commentary] In the last few weeks, I have read a number of op-eds claiming that reallocation of broadcast spectrum for wireless use should be left to the free market. While I am a fervent believer in free markets and limited government, there are rare instances in which government involvement is necessary. I agree with Federal Communications Commission Chairman Julius Genachowski on his proposal that managing the incentive process to voluntarily reclaim broadcast licenses and repack the spectrum is an area that absolutely requires FCC leadership and experience.

When the FCC assumed responsibility in 1927 to determine the license holders for the nation's spectrum, there were only a few licensees. Today, and largely driven by the wireless industry, spectrum is a scarce commodity that commands billions when auctioned. To ensure that this finite resource is put to its highest and best use, the federal government acts as manager and aggregator of the licenses. For wireless, it identifies spectrum bands that are nationally, and sometimes internationally, harmonized once underused spectrum is identified and license holders are moved (or repackaged). With thousands of license holders across the country, including broadcasters, it's a challenging task but one the government does well to ensure interference-free service. The FCC rightfully plays a critical role in the voluntary broadcast incentive auction process because it works for everyone involved. Let's work with the FCC and move quickly to get this valuable spectrum to auction--the first step will be legislation that authorizes an incentive auction--so that the U.S. wireless industry can remain the world's leader and continue to offer our consumers the best mobile experience.