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FCC Approves $28.1 Billion Verizon-Alltel Merger

Both firms share the same CDMA infrastructure and are committed to move to Long-Term Evolution in future years.

The Federal Communications Commission on Tuesday approved Verizon Wireless' $28.1 billion acquisition of Alltel while a vote on the controversial use of White Spaces remained in limbo.

In approving the Verizon-Alltel deal, the FCC paved the way for Verizon Wireless to become the largest U.S. mobile phone service provider. Led by chairman Kevin Martin, the other two Republican commissioners, Deborah Taylor Tate and Robert McDowell, voted in favor of the merger. Democratic commissioners Michael Copps and Jonathan Adelstein voted in favor of the merger, too, but they dissented over some roaming issues asking more guarantees be put in place that would guarantee existing roaming contracts for a lengthy period.

Some Verizon stockholders had questioned whether the company could afford the acquisition in the face of the current economic meltdown, but Verizon Communications' CEO Ivan Seidenberg had assured that the investment was a sound one and that it the company planned to go forward with it. Both firms share the same CDMA infrastructure and are committed to move to Long-Term Evolution in future years. Because of that, insiders say the merger should be accomplished with a minimum of technical complications.

On another issue, Chairman Martin said the company has begun an investigation into the pricing policies of major cable operators and Verizon Communications. News of the pricing investigation came after Consumers Union complained that consumers are being charged more for less service and must now pay for expensive set-top boxes for each television set they use.

The commission began deliberations in the afternoon and the issue that had generated the most heated debate -- over the so-called "White Spaces" spectrum -- still hadn't been voted on late in the afternoon. Approval of flexible use of the White Spaces -- the unlicensed spectrum that exists alongside the 700 MHz band -- would enable consumers to have some use of the spectrum without having to pay for it. Opponents have complained that approval could lead to interference problems.

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