Telecom Takeover

The Federal Communications Commission approved the takeover of VoiceStream Wireless by Germany's Deutsche Telekom Wednesday. The deal should boost the company's position as national wireless competitor.

The FCC said it had concluded that the merger was in the public interest.

"U.S. consumers will benefit from the effects of the proposed merger, which will include the build-out and extension of VoiceStream's network," said the FCC. "U.S. consumers also will benefit from the resulting increase in competition in mobile services, including new communications services and new features."

The deal with capital-rich Deutsche Telekom will also allow VoiceStream to compete more effectively in auctions for U.S. airwaves space.

The vote to approve the merger was 4-0.

The FCC had to approve the takeover because it involves foreign ownership of a U.S. telecommunications company. The commission has the power to prevent any telecom concern that is more than 25 percent foreign or foreign-government-owned from controlling a U.S. business through a holding company. Deutsche Telekom is majority owned by the German government.

Opponents protested the merger saying that having the backing of a foreign government creates an unfair playing field in the volatile telecom market.

In responding to those concerns, the FCC said that it found the German conglomerate "would have neither the incentive nor the ability to engage in unfair competition, specifically predatory pricing, in the U.S. domestic mobile telephone market."

The Justice Department had cleared the deal last fall. The FBI also signed off on the deal after Deutsche Telekom agreed to allow U.S. law enforcement agencies to conduct authorized phone surveillance and to keep such surveillance confidential.

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