FCC, Justice Dept. Approve $36B Sprint-Nextel Merger

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Sprint Corporation, the no. 3 American mobile-telephone carrier, won approval from American regulators for its proposed $36 billion takeover of Nextel Communications Incorporated without having to sell any assets.


The Federal Communications Commission, which regulates the telephone industry, and the Justice Department both approved the transaction, according to statements yesterday. Public benefits outweigh any harm the transaction may cause, the FCC said after a 4-0 vote.


Regulators concluded that the purchase, which would bolster Overland Park, Kan.-based Sprint’s position as the no. 3 American mobile-telephone carrier, doesn’t create the kind of concentration that led the government to require Cingular Wireless LLC and Alltel Corporation to sell operations in some local markets as a condition of other recent mergers.


“The feeling is, there’s enough competitive dynamic out there to keep consumers protected,” a communications policy analyst at Stanford Washington Research Group, Paul Glenchur, said. Mr. Glenchur previously worked as an attorney at the FCC. He spoke before yesterday’s announcements. The acquisition will reduce the number of large nationwide carriers from five to four.


“Carrier conduct will remain sufficiently competitive to ensure that market performance will not be impaired,” the FCC said in a statement.


The Sprint chief executive, Gary Forsee, and Nextel CEO Timothy Donahue met with FCC chairman Kevin Martin, on July 1 and urged the agency “to act expeditiously to approve the merger,” according to an FCC filing.


“This is a very positive achievement for Chairman Martin,” the chief executive of Washington research firm Precursor, Scott Cleland, said. “This merger review got done quickly. It is impressive.”


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