FCC signs off on two wireless mergers

The Federal Communications Commission has approved two big wireless mergers, reports The Wall Street Journal.

The FCC on Tuesday approved a $28 billion deal by Verizon Wireless to acquire Alltel Corp., and Sprint Nextel Corp.'s $14.5 billion deal to combine its WiMax business with Clearwire Corp.

If the deals close, as expected, Verizon will become the No. 1 U.S. wireless carrier by subscribers, and Sprint will assuage investors who were concerned about its previous plans to spend billions on its own to build a fast wireless broadband network using a new technology called WiMax.

The FCC cleared both deals with fairly minor conditions. The Justice Department has already signed off on the Verizon-Alltel deal, but has yet to rule on Sprint-Clearwire.

Verizon's challenge now is to arrange financing to complete the deal, which includes the assumption of $22.2 billion in Alltel debt. Verizon wants to repay Alltel's term loans by raising new debt at a lower interest rate, but the credit crisis has made that task more difficult.

The company still intends to close the deal by the end of the year and is prepared to pay a higher interest rate than it originally anticipated if necessary.