(gigaom.com) — You can always count on the Federal Communications Commission to pick slow news days for its big decisions. On the Friday after the July 4th holiday, just as the afternoon started to wind down, the FCC issued its order (pdf) approving both SoftBank’s acquisition of Sprint and Sprint’s takeover of Clearwire.
The FCC’s public interest and a Monday vote of Clearwire shareholders were the final steps necessary to close this three-way deal. Assuming Clearwire’s stockholders give their okay, then Sprint and SoftBank could wrap up this transaction in a matter of weeks.
Sprint CEO Dan Hesse immediately issued a statement saying that this deal is exactly what the U.S. mobile market, long dominated by AT&T and Verizon Wireless, needs to remain competitive. Clearwire’s vast stores of spectrum along with SoftBank’s capital will give Sprint the fuel it needs to go after the Big 2. Said Hesse:
“Just two years ago, the wireless industry was at the doorstep of duopoly, but with these transformative transactions, we are one step closer to a stronger Sprint which will better serve consumers, challenge the market share leaders and drive innovation in the American economy.”
Though the Clearwire deal needs to close before the SoftBank takeover of Sprint can go into effect, the FCC decided to weigh both deals as a unified transaction. In truth, there wasn’t much of a public interest review in the matter of Sprint-SoftBank. SoftBank will take over 78 percent of Sprint, but since the Japanese mobile operators has no substantive operations in the U.S., the deal would result in no consolidation of operations, subscribers or spectrum. On the contrary, the FCC concluded that the big capital investment SoftBank would make in Sprint would help promote competition.
“The increased investment in Sprint’s and Clearwire’s networks is likely to accelerate deployment of mobile broadband services and enhance competition in the mobile marketplace, promoting customer choice, innovation and lower prices,” Acting FCC Chairwoman Mignon Clyburn said in a statement.
The Sprint-Clearwire deal was a little bit tricker, and most of the 64-page order was devoted to discussing it. Taking over Clearwire gives Sprint the single-largest spectrum portfolio in the U.S., though the individual licenses aren’t quite as valuable as the low-frequency spectrum held by AT&T and Verizon. Many of Clearwire’s licenses are in weird configurations, making them difficult to deploy networks over. Still Verizon and AT&T asked the FCC to force Sprint to divest some of those licenses as a condition of its approval.
The FCC ultimately opted to let Sprint keep everything. Sprint has held a substantial stake in Clearwire (it’s currently the majority owner) since 2008, and though it’s never had direct control over the company, the FCC has always counted Clearwire’s spectrum as part of Sprint’s holdings in all other transactions. From the FCC’s perspective, nothing has changed under this deal except Sprint’s majority ownership of Clearwire now becomes complete ownership.
We will update this post as we gather more information.
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