FCC Approves $24.7 Billion Buyout Of Alltel

Friday, October 26th 2007, 6:36 pm

By: News On 6

WASHINGTON (AP) _ The Federal Communications Commission on Friday approved a $24.7 billion buyout of Alltel Corp., the nation's fifth-largest wireless carrier, to a private investment group.

The agency approved the transfer of licenses held by Alltel to Atlantis Holdings LLC, a holding company consisting of TPG Capital, formerly Texas Pacific Group, and GS Capital Partners, a subsidiary of Goldman Sachs.

Alltel shareholders will receive $71.50 per share in cash, according to the terms of the deal. The company said in a statement Friday night that it expects the transaction to close by Thanksgiving Day, Nov. 22.

Little Rock, Ark.-based Alltel provides wireless voice and data services to more than 12 million customers in 36 states. The company specializes in serving rural areas.

In announcing the approval, the agency said the transaction would not hurt competition in the mobile telephone market. It also noted the transaction will provide Alltel with fresh capital which will lead to deployment of advanced wireless services in rural areas.

Alltel is a major beneficiary of the Universal Service Fund, a national program funded by a fee attached to the phone bill of telephone customers nationwide. The fund provides subsidies to carriers that do business in hard-to-reach areas of the country.

As part of the approval, the agency imposed an interim cap on the amount of money the new owner receives under the program. The cap will remain in place until ``fundamental comprehensive reforms'' are adopted, the agency said in a press release.

Republican FCC Chairman Kevin Martin did not release a statement. Democratic commissioner Michael Copps voted in favor of the transfer but objected to the universal service fund cap, saying ``piecemeal'' reform of the program is ``counterproductive to the far more important goal of rationally implementing comprehensive reform.''

Republican Commissioner Robert McDowell supported the license transfers but criticized the conditions placed on the new owner, calling them ``not merger specific'' and ``unnecessary.''