Washington – SoftBank’s acquisition of a 78 percent stake in Sprint and Sprint’s purchase of Clearwire will serve the public interest, according to Federal Communications Commission’s (FCC) acting chairwoman Mignon Clyburn.
She commented in a statement after the FCC late last week approved the transactions: “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.”
The results of the transactions will be enhanced competition, the promotion of customer choice, innovation and lower prices, she said.
Sprint and SoftBank currently expect to close the merger on July 10.
SoftBank is paying around $16.64 billion to purchase shares from existing Sprint shareholders for a 78 percent ownership stake and plans to provide an additional $5 billion to Sprint to invest in its network.
The SoftBank acquisition, the FCC pointed out in its ruling, “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.”
Sprint’s acquisition of the remainder of Clearwire that it doesn’t already own, while not a prerequisite to SoftBank’s acquisition of Sprint, “does not raise substantial competitive concerns,” the FCC said. The proposed increase in Sprint’s interest in Clearwire from slightly more than 50 percent, the FCC reasoned, “is unlikely as a matter of fact to reduce competitors’ access to 2.5GHz spectrum because … Clearwire’s current revenue stream already is almost entirely derived from Sprint, with competitors to Sprint generally not using Clearwire’s spectrum to deploy advanced broadband technologies or mobile broadband service offerings.”
Sprint had said it would provide financial resources to add 4G LTE technology to ailing Clearwire’s network.
The FCC also said it does not have to impose its own conditions on the SoftBank acquisition for national security purposes because the U.S. Committee on Foreign Investment in the United States (CFIUS) required SoftBank and Sprint to enter into a national security agreement with the Department of Defense, Department of Homeland Security, and the Department of Justice over concerns about the use of communications infrastructure by Chinese companies ZTE and Huawei. The three departments will have the right to review and approve network equipment vendors and managed services providers of Sprint and Clearwire, the FCC noted. Other conditions were also imposed by CFIUS.