Alltel goes to private equity

The Federal Communications Commission approved the $27.5 billion acquisition of Alltel Corp. by private-equity firms TPG Capital L.P. and the Goldman Sachs Group Inc., despite criticism by several members over linked universal service and enhanced 911 conditions.
Atlantis Holdings L.L.C. is the holding company for TPG Capital and Goldman Sachs. While agency concluded that the transition would not harm wireless service competition, it set special requirements to address concerns about universal service and E-911. As such, the FCC imposed an interim cap on high-cost, competitive eligible telecommunications carrier support-based on 2007 levels-provided to Alltel as a condition to approval of the deal even though the agency has yet craft a broad universal service reform policy.
But there’s an escape clause to the universal service: E-911 compliance and the filing of certain universal service support data.
“The condition being imposed in today’s merger is even more piecemeal than what the [Federal State] Joint Board recommended in May. I fear that the condition will be an even greater hindrance to rational, comprehensive USF reform,” stated Commissioner Michael Copps. “Additionally, it is disappointing to me that the commission imposes this condition when the Joint Board currently is working hard to provide the commission a recommendation on broader reform.”
Fellow Democrat Jonathan Adelstein also criticized the crafting of the restrictions on the Alltel-Atlantis deal.
“The order curiously requires that Alltel immediately meet E-911 public-safety answering point-level compliance as a condition precedent for exemption from the freeze on Alltel’s level of universal service support,” Adelstein said. “This “Jack in the Box” surprise requirement that suddenly sprung up appears as an illogical afterthought. It is unclear to me how Alltel might fulfill this condition given that the commission currently has an open proceeding addressing the details of how carriers must implement PSAP-level accuracy.”
Commissioner Robert McDowell, who helps comprise the three-member GOP majority at the FCC, said the conditions seem to prejudge future actions on major telecom issues.
“The conditions imposed today raise more questions than they answer,” said McDowell. “Given the ongoing nature of the universal service and E911 proceedings, I wonder whether this is an attempt to bind future commission action, and dictate or bind government policy.”