FCC Votes: Sprint-Clearwire, Alltel-Verizon and white spaces rules pass

The FCC late this afternoon approved both the Verizon Wireless acquisition of Alltel and Sprint and Clearwire’s merger of WiMAX assets—two deals that could substantially recreate the wireless landscape in the US. It also adopted rules for governing the use of the “white spaces” between existing broadcast television spectrum for use in offering wireless data services.

A coalition of companies -- dubbed the Wireless Innovation Alliance and including Google, Microsoft, HP, Dell and Motorola – had pushed hard to have the band between existing broadcast channels opened up. Critics, especially broadcasters, protested strongly, contending devices in that range would conflict with TV broadcasts.

As part of the FCC’s decision, it imposed power limits on white space devices so as to minimize interference, including so-called geo-location technology. Motorola had been pushing such an approach after earlier device tests had failed.

Verizon’s $28 billion acquisition of Alltel would add 11 million subscribers to the VZW network and allow it to penetrate deep into small and rural communities. Last week, the US Department of Justice approved the deal, making an FCC vote the final hurdle to overcome. The Justice Department required Verizon to unload 100 markets where Verizon and Alltel had extensive overlap. The FCC required Verizon to divest an additional five markets in the Alltel footprint—something Verizon had already agreed to—and required Verizon to honor Alltel’s roaming agreements for the next four years—two more years than FCC chairman Kevin Martin originally proposed.

The roaming conditions could have been far greater, as commissioners spent most of the day debating the deal. Several operators have challenged the Verizon-Alltel deal, claiming Verizon will use its newfound rural CDMA might to overcharge them for critical roaming services. Leap Wireless asked the FCC to establish a nationwide roaming policy that would have regulated rates that operators can charge for roaming, but the FCC stopped short of imposing such a policy. Democratic commissioners Michael Copps and Jonathan Adelstein proposed that the roaming rate guarantees be extended to seven years, but they were overruled.