In a brief statement last week, Federal Communications Commission Chairman Kevin Martin announced the FCC will try to complete its review of two major wireless mergers by the end of the year. The goal, Martin said, is to reach a decision before a new president takes office in January.
The deals are Sprint's proposed purchase of a 51 percent stake in a reconstituted Clearwire, and Verizon's planned $28 billion purchase of Alltel. If approved, the Alltel merger would make Verizon the largest U.S. cellular carrier with roughly 80 million subscribers, versus AT&T  's 71.4 million.
According to Ross Rubin, director of industry analysis for The NPD Group, the FCC's push to resolve the mergers has more to do with the marketplace than politics.
"I could understand why there would be some eagerness," Rubin said, "since this is a launch of a new generation of wireless connectivity that can bring broadband to almost the entire U.S. population. Potentially, the Sprint/Clearwire initiative will cover 90 to 95 percent of the U.S. population. By allowing the investment to go forward, the FCC will accelerate competition and compel other companies to move forward."
Strong Opposition From AT&T
In a petition filed during the summer, AT&T asked the FCC to apply the same level of scrutiny to the Sprint/Clearwire deal as AT&T's own earlier acquisition of Dobson Communications.
"While AT&T does not fundamentally oppose the underlying transactions," AT&T wrote in its petition, "the regulatory process must be consistent for all entrants, including new Clearwire, and regulatory parity therefore requires an examination of the reformed company's spectrum aggregation."
In particular, AT&T believes the companies have not adequately accounted for all the airwaves that would be brought together by their merger. Sprint and Clearwire have announced they plan to use their joint spectrum holdings to launch a nationwide WiMAX network .
Verizon's proposal to buy Alltel was also opposed by AT&T, which said the deal could create cellular monopolies in certain areas. In response, Verizon has announced plans to sell equipment in affected areas.
AT&T isn't the only organization protesting the mergers. The Rural Cellular Association also filed a petition with the FCC asking for close scrutiny of the deals, which it says undercut interoperability with small rural telecommunication companies and hinder efforts to bring wireless broadband to underserved regions of the country. (continued...)
|
