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FCC OKs Verizon's Buy of Alltel

Stocks in this article: VZ VOD S

Updated from Tuesday, Nov. 4

The Federal Communications Commission delayed the start of its Election Day meeting on Tuesday as regulators hammered out a conditional approval for Verizon's (VZ) acquisition of Alltel.

According to a report by the Associated Press, the FCC is attaching several conditions to the deal, including a requirement that Verizon Wireless, a joint venture of Verizon and Vodafone (VOD), honor Alltel's existing roaming agreements for four years. Previously, FCC Chairman Kevin Martin said he was in favor of requiring Verizon to keep existing roaming agreements intact for two years.

Last week, the Department of Justice approved the deal with certain terms, including the shedding of many local markets in 22 states.

In June, Verizon Wireless said it would buy privately held Alltel and its 13 million subscribers for about $5.9 billion. On the basis of Alltel's projected net debt at closing of $22.2 billion, the total value of the transaction is $28.1 billion.

"We certainly look forward to seeing and reviewing the FCC order," Verizon spokesperson Robin Nicol told TheStreet.com. "This approval is another critical step in the process of completing this transaction. With the FCC and the DOJ approval, we're now working to complete the final steps of the government approval process."

Nicol said Verizon was continuing to complete the transaction as soon as it would be practical.

Meanwhile, the AP reports the FCC has opened an investigation into the pricing policies of major cable operators and Verizon.

The agency wants to ensure that customers are being treated fairly, Martin said in an interview with the AP.

The FCC wrote to Verizon and 11 cable companies, such as Comcast (CMCSA), Cablevision (CVC), and Time Warner Cable (TWC), last month about their practice of moving analog channels into digital tiers to free up bandwidth for other uses, such as high-definition channels. Verizon offers pay-TV through its FiOS service.

To watch channels that have been moved, subscribers to analog service must either subscribe to a more expensive digital tier, rent a digital set-top box or use an adapter, which service providers are starting to offer for free, according to the AP.

In addition to the Verizon/Alltel deal, FCC commissioners also approved the transfer of licenses in the joint venture between Sprint Nextel (S) and Clearwire (CLWR). The commission is also set to rule on the unlicensed operation of low-power devices in the broadcast television spectrum known as "white space."

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