July 8, 2005

The FCC (Federal Communications Commission) appears close to approving the proposed $35 billion merger between Sprint Corp. and Nextel Communications, though it remains unclear whether the agency will impose any conditions on the deal as consumer groups and community technology centers have advocated.

The Wireless Telecommunications Bureau several days ago sent a staff recommendation to FCC Chairman Kevin Martin in favor of the Sprint-Nextel combo, according to a source close to the matter.

Reuters, citing an anonymous source, reported that Martin is circulating the staff proposal to the other three commissioners. Fred Cambell, identified as Martin's wireless advisor, did not return a call for comment.

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Sprint and Nextel declined to comment. FCC records indicate Sprint Chairman Gary Forsee and Nextel President Timothy Donahue and their lobbyists met with Martin and Sam Feder, acting general counsel and previously wireless advisor to the FCC chairman.

The Martin meeting followed visits by Forsee and Donahue to other FCC commissioners in late June.

Sprint PCS would remain the No. 3 mobile-phone operator if the Nextel acquisition is approved, but the merger would significantly strengthen its ability to compete with No. 1 Cingular Wireless L.L.C and No. 2 Verizon Wireless.

It was always expected that the FCC would approve the deal. The only lingering question is what, if any, conditions and/or divestitures of wireless assets the agency and Justice Department might require.

The Justice Department yesterday called for the sale of mobile-phone licenses in three rural states before it would approve a smaller deal involving Alltel Corp.'s purchase of Western Wireless Corp.

Source: RCR News