FCC Approves both Sprint and Clearwire Acquisitions

by Matt Klassen on July 9, 2013

In a rare glimpse of bureaucratic efficiency, the Federal Communications Commission has reportedly brought the ongoing Sprint and Clearwire acquisitions sagas to a surprisingly swift conclusion. Now with Dish Network having backed out of both its attempt to acquire Sprint and its defunct partner Clearwire, the stage is set for Softbank to finally close what will become the largest overseas acquisition deal from a Japanese company.

According to Reuters, the FCC voted unanimously to approve the deal late last week, a step that many considered nothing but a formality for deal that was ostensibly complete. The FCC vote not only granted approval to Softbank to acquire Sprint, but gave Sprint the green light to acquire the remaining shares in Clearwire as well—still subject to a minority shareholder vote—its rival bidder Dish Network having backed out when Sprint doubled its offer.

While nothing has been made official, having secured the FCC vote of approval reports indicate that Softbank is hoping to have this entire acquisition wrapped up sometime this week, perhaps even as early as later today.

The FCC’s review, running some 70 pages in length, focused on whether both the Sprint acquisition and the Clearwire acquisition were in the public interest, with Sprint’s rivals voicing concerns that the mergers would give a newly combined Sprint/Clearwire too much spectrum, exceeding the cap, or ‘screen,’ put in place to maintain fair distribution.

But as Reuters explains, “Because of Sprint’s [pre-existing] majority ownership in Clearwire, the FCC had already attributed its spectrum to Sprint for screen purposes but viewed it as less valuable than the type owned by Verizon and AT&T and counted only a portion of Clearwire’s entire spectrum ownership toward the screen.”

While rivals were disappointed with the FCC’s seemingly arbitrary adjustment of its tenuous spectrum ‘screen,’ the Commission, as mentioned, determined the spectrum held by Clearwire to be less valuable, and thus count for less against the cap than equivalent spectrum holdings by Verizon or AT&T.

Regarding the Clearwire acquisition, it served as a key piece of Softbank’s acquisition plan, its spectrum necessary to help Sprint compete against the larger market incumbents. Had the Clearwire deal gone to Dish Network, its uncertain how Softbank would have proceeded.

But I suppose all those questions have gone by the wayside now, as Dish Network has gone as quickly as it appeared, and Softbank is set to invade the American wireless market, hopefully bringing with it the necessary cash, leadership, and business acumen Sprint needs to finally become a carrier to be reckoned with.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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