FCC approves wireless mergers and the use of white spaces

5 Nov 2008

The Federal Communications Commission (FCC) has approved two major tie-ups between US wireless operators and has also decided to allow so-called ‘white spaces’ of unused TV broadcast spectrum to be utilised for wireless data services. Regulators voted yesterday to give the green light to Verizon Wireless’ USD28.1 billion acquisition of smaller rival Alltel, which will create the country’s largest cellular operator with more than 80 million subscribers. Verizon has agreed to divest overlapping assets in 105 markets, including around two million of Alltel’s 13.8 million subscriber base. Verizon hopes to complete the transaction before the end of this year.

Separately, Alltel has announced its third quarter financial results, with revenues rising to USD2.5 billion from USD2.28 billion a year ago. The company swung to a net loss of USD55.2 million, however, down from a profit of USD282.6 million in 3Q 2007.

Meanwhile, the FCC has also cleared the way for Sprint Nextel to merge its WiMAX wireless broadband operations with those of wireless ISP Clearwire to create a national WiMAX operator. The venture also brings in outside investment from cable operators Time Warner, Comcast and Bright House Network, plus Google and Intel. A number of firms including AT&T had tried to scupper the Sprint-Clearwire tie-up, saying that the deal should have been subject to much more stringent regulatory scrutiny before being pushed through. An affiliate operator of Sprint, Illinois-based iPCS, is also trying to block the venture; it has filed an emergency motion in a local circuit court to stop Sprint from going ahead with the merger. It claims that its partnership agreement with Sprint means that Sprint is not allowed to offer competing services in iPCS territories. Sprint argues that it is spinning off its WiMAX operations into a separate company so the affiliate agreement is not being breached.

FCC commissioners also found time for a vote on the use of white spaces, adopting rules which will allow third-party providers to use free spectrum to offer mobile data services. Firms such as Google and Microsoft have been pushing to have the spare frequencies opened up, though broadcasters objected to the proposals, saying that it could cause interference problems for TV transmissions. The FCC’s decision imposes power limits on devices using the white spaces to minimise interference.