FCC OKs Carlyle’s
buy of Verizon Hawaii
The Federal Communications Commission has given its blessing to the Carlyle Group's proposed $1.65 billion acquisition of Verizon Hawaii Inc., rejecting concerns that the deal was anti-competitive, could lead to higher phone rates and may harm national security.
"We are satisfied that the proposed transaction is in the public interest and should be granted accordingly," the FCC said in its ruling.
Carlyle Group Managing Director William Kennard said he was "quite pleased" by the ruling.
"This is a significant milestone in our efforts to purchase Verizon Hawaii and to serve the local community as a local company," Kennard said.
The transaction still needs approval from the state Public Utilities Commission and U.S. Justice Department.
Kennard has said he was optimistic that Carlyle could receive PUC approval by the end of this year and that the deal could close early in the first quarter of next year.
The Washington, D.C.-based private equity firm, which has more than $19 billion under management, announced in May that it would purchase Hawaii's dominant local phone service provider from New York-based Verizon Communications Inc.
But the deal ran into opposition led by phone and Internet provider Pacific LightNet Inc., which filed a motion stating that the Carlyle Group's plans to overhaul Verizon's back- office processes would hamper Pacific LightNet's operations.
Time Warner Telecom of Hawaii Inc., doing business as Oceanic Communications, raised similar concerns. Both companies are competitors of Verizon's but also depend on Verizon's networks to complete phone calls to each other's customers.
Verizon Hawaii's back office was dismantled and relocated to the mainland as a result of the 2000 corporate merger that created Verizon Communications.
The FCC said it found no merit in those concerns or in those expressed by the U.S. Defense Department that a back-office revamp could cause disruptions to telecommunications networks, which the department said are vital to the nation's security and military readiness.
Officials with Pacific LightNet and Time Warner Telecom could not be reached for comment.
The Carlyle Group said the deal includes Verizon Hawaii's local telephone operations, print directory, long-distance operations and Internet service provider business.
Verizon Wireless operations and assets in Hawaii are not included in the transaction. Verizon also will retain two units in the state that provide services for federal government customers: Verizon Federal Network Systems and Verizon Federal Inc.
