FCC Bureaus Grant Verizon Petition For Declaratory Ruling On Foreign Ownership And Verizon-Vodafone Pro Forma Transfers Of Control

In the first action applying new foreign ownership rules meant to reduce red tape and facilitate international investment in US wireless networks, the Federal Communications Commission issued a foreign ownership ruling and approved the transfer of control to Verizon Communications of Vodafone’s stake in Verizon Wireless.

The actions by the International Bureau, Wireless Telecommunications Bureau, and Office of Engineering and Technology came just over one month after the public comment period closed on the petition. In the planned transaction, Verizon, currently the controlling, 55% parent of Verizon Wireless, will acquire, for approximately $130 billion, Vodafone’s U.S. group with the principal asset of the remaining non-controlling 45% interest currently held by Vodafone in Verizon Wireless. As part of the transaction, Verizon will distribute Verizon stock to Vodafone’s shareholders. The declaratory ruling issued by the International Bureau permits Verizon, post-transaction, to have aggregate foreign ownership in excess of the 25% benchmark. None of the non-US shareholders will hold a greater than 5% interest, or a controlling interest, in the outstanding Verizon shares.

Earlier this year, the FCC modified the policies and procedures applied to the review of transactions involving foreign ownership of U.S. wireless networks in order to encourage investment while reducing delay, uncertainty and expense. The rules became effective in August.