RealTime IT News

FCC Green Lights Wireless Mergers

The Federal Communications Commission (FCC) will approve Verizon Wireless' acquisition of rural carrier Alltel and the proposed Sprint-Clearwire WiMAX venture at its next monthly meeting on Election Day.

"The input to move fast on these is the current stress in the financial markets," said FCC Chairman Kevin Martin during a conference call with reporters yesterday.

During the call, Martin also outlined the commission's November agenda items, which includes a vote on the use of "white space" between television channels for unlicensed, broadband wireless Internet networks that tech companies such as Google have championed.

On the merger front, the Alltel/Verizon approval will make Verizon the largest U.S. wireless carrier after adding Alltel's 13.2 million subscribers to Verizon Wireless' 68.7 million-customer list for a total of 81.9 million customers.

Current leading carrier AT&T (NYSE: T) had 71.4 million subscribers as of the first quarter of 2008. Alltel serves markets in 34 states, including 57 rural markets that Verizon Wireless currently doesn't serve. Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD)

The FCC said Verizon Wireless will provide the same roaming provisions Alltel now provides its customers and that no additional roaming conditions have been attached to the deal.

Rural wireless carrier Leap Wireless (NASDAQ: LEAP) had petitioned the FCC to deny the $28.1 billion deal, claiming it would negatively impact its subscribers and give Verizon Wireless a "massive" amount of spectrum.

The FCC's approval of the Sprint Nextel (NYSE: S) and Clearwire (NASDAQ: CLWR) $14.5 billion effort has no regulatory conditions attached, according to Martin.

The carriers want to build a wireless high-speed Internet network based on the emerging WiMAX technology that will provide service for up to 140 million people in the U.S. by 2010. Clearwire is set to gain an infusion of $3.2 billion from investors, that include cable companies, Google and Intel, at the transaction close. The deal, which includes a merger of all Clearwire and Xohm broadband assets, is valued at $14.5 billion.