The Federal Communications Commission is approving the $24.7 billion private equity buyout of Alltel, the nations fifth-largest cellular carrier. With the approval handed down Oct. 26, Alltel expects to close the $71.50 per share deal by the end of November.
The FCC ruling determined that the acquisition would not result in competitive harm and that the additional capital provided by Atlantis Holdings would allow the company to acquire additional spectrum to expand its network. Atlantis is a holding company controlled by the principals of TPG Capital and The Goldman Sachs Group.
Primarily a rural carrier, Alltel, of Little Rock, Ark., provides wireless voice and data services to more than 21 million customers in 36 states.
"While I cannot be pleased at the current levels of concentration in the wireless industry, I do not see that this transaction makes the situation any worse," FCC Commissioner Michael Copps said in a statement. "I do, however, renew my plea that the agency conduct a general rulemaking to assess the public interest consequences of private equity firms holding Commission licenses."
The FCC did condition the Alltel sale by capping the companys USF (universal service funding) until Alltel meets E-911 PSAP (Public Safety Answering Point) compliance. The USF uses fees charged to all telephone customers to support telephone service in rural and other under-served areas.
Last month, the FCC set a deadline of Sept. 11, 2012, for wireless carriers to satisfy E-911 accuracy as measured at the PSAP level.
"It is unclear to me how Alltel might fulfill this condition given that the Commission currently has an open proceeding addressing the details of how carriers must implement PSAP-level accuracy," Commissioner Jonathan Adelstein said in his statement.
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