NEW YORK-The Federal Communications Commission announced it has permitted the takeover of
Puerto Rico’s government-run “principal local exchange service provider by a well-financed and experienced
company,” GTE Holdings L.L.C.
In its decision, the FCC granted a transfer to GTE Holdings from the Puerto
Rico Telephone Authority of “certain wireless telecommunications licenses and an international resale (service)
authorization” that are held by Puerto Rico Telephone Co. and Telefonica de Puerto Rico Inc., two authority
subsidiaries.
“This transfer of control will occur as part of a transaction in which GTE Holdings will purchase
from (PRTA) a major ownership interest in … and will obtain de facto control over PRTC,” the FCC said.
The
federal agency also said this transaction already has the approval of Puerto Rico’s governor and legislature. It was
approved by the Puerto Rican government in July when the GTE consortium, which includes Popular Inc., agreed to
buy a 50-percent plus-one-share stake for $444 million. In addition, PRTC agreed to pay the Telephone Authority a
$1.5 billion special dividend. The sale is expected to close in March.
“The Commission concluded that the
transaction is unlikely to produce competitive harms in Puerto Rican telecommunications markets because existing
[FCC] rules, in combination with the continued application of access and reporting conditions that had previously been
imposed on PRTC, are adequate to prevent anti-competitive activity,” the FCC announcement
said.
“The Commission also found that the transfer will result in significant public interest benefits … GTE
Holdings’ commitments to invest substantial sums in infrastructure improvements and (to) improve service quality are
in the public interest … because the record does not demonstrate that such upgrades would have occurred absent the
merger.”
GTE Holdings also has committed to maintain residential phone rates, provide Internet access at
discounted rates to educational institutions and to refrain from “involuntary” termination of employees, the
FCC said.
