Softbank’s merger with Sprint and Clearwire is nearly complete, with the FCC announcing Friday that it has approved the deal.

Despite a rival bid from Dish Network, Sprint shareholders on June 25 approved the merger plan with SoftBank. Clearwire shareholders are scheduled to vote today on a transaction that would give Sprint 100% control of Clearwire. Sprint currently owns about half of Clearwire.

“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 customers, challenge the market share leaders and drive innovation in the American economy,” said Sprint CEO Dan Hesse in a Sprint press release announcing FCC approval of the deal.

Advertisement

In a 74-page order approving the SoftBank/Sprint/Clearwire transactions, the FCC said the approval decision was motivated, in part, by the fact that SoftBank doesn’t already have a U.S. network.

“The investment by SoftBank in the U.S. market differs from wireless transactions in which two domestic competitors with overlapping service areas or spectrum holdings are seeking approval to merge, thereby eliminating an existing competitor,” wrote the FCC. “Rather, SoftBank, which has no attributable interests in any spectrum licenses in the United States, is seeking approval . . . to use approximately $16.64 billion to purchase shares from existing Sprint shareholders, and plans to provide an additional $5 billion to Sprint that it can invest in its network and use to provide wireless broadband service.”

When Softbank announced plans to acquire Sprint last fall, Softbank CEO Masayoshi Son said the company would offer higher mobile broadband speeds than what is available currently in the U.S. In acquiring Sprint and Clearwire, Softbank stands to gain considerable 2.5 MHz spectrum. Much of this is unpaired spectrum, and Softbank is expected to use it to deliver TD-LTE services, a type of LTE that has not previously been offered in the U.S. but has seen deployments overseas. Unpaired spectrum is well suited to TD-LTE, which separates upstream and downstream traffic through time division multiplexing rather than by using separate frequencies.

I scanned through the FCC approval order and found no reference to any requirement for Sprint or Clearwire to divest any spectrum as a condition of the deal. Perhaps that’s not surprising considering that Softbank currently has no U.S. spectrum.

But at least one other carrier and one consumer group have questioned the spectrum screen used by the FCC in evaluating the deal.

“The FCC put political expediency before policy when it chose not to count Clearwire’s spectrum in the spectrum screen,” said the American Consumer Institute Center for Citizen Research in a statement.

In a blog post, an AT&T executive said it was unfair for the FCC to only consider part of the 2.5 GHz holdings that the merged entity ultimately will hold. The executive argued that this decision was “directly contrary to the manner in which the FCC treated the neighboring WCS band at 2.3 GHz.” The FCC adjusted its spectrum screen when AT&T acquired 2.3 GHz licenses, the executive noted.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!