By Kristina Peterson
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Federal Communications Commission this week conditionally approved AT&T Inc.'s (T) $944 million acquisition of Centennial Communications Corp (CYCL).
The telecommunications companies say the merger will bring broader and faster wireless coverage to Centennial's customers in the Midwest, Southeast, Puerto Rico and the U.S. Virgin Islands and help deploy more broadband Internet access to rural parts of the country.
As part of a settlement with the Department of Justice, the companies will sell Centennial's wireless licenses and assets in eight areas in Louisiana and Mississippi. The licenses will be sold to one purchaser in each of three regions to retain their competitiveness. AT&T agreed in May to sell Centennial's assets in five areas to Verizon Communications Inc (VZ).
AT&T also promised to honor Centennial's current agreements with other carriers to provide roaming services to the end of their term. Any carrier with fewer than 10 million subscribers that has a roaming agreement with Centennial will be allowed to maintain those terms with AT&T for four years or the agreement's end.
AT&T will not have to sell its assets in Puerto Rico but agreed to limit the services it provides to America Movil (AMX), which competes with Centennial in Puerto Rico and the U.S. Virgin Islands.
FCC Commissioner Michael Copps concurred in the decision to approve the merger but cautioned that concentration of telecommunications companies doesn't always benefit consumers.
"Too many rural areas have been abandoned when the marriage didn't produce the big company profits sought by the market," Copps said in a statement.
The two companies agreed to merge last November, with AT&T acquiring Centennial for $944 million in cash. Centennial stockholders will receive $8.50 per share upon completion of the deal.
"The addition of Centennial will enhance AT&T's assets in wireless--a strategic priority and one of our biggest growth drivers," Ralph de la Vega, president and chief executive officer of AT&T Mobility and Consumer Markets, said in a statement on Friday.
AT&T expects to place its products and services at Centennial's mainland retail locations by January 2010 and take over Puerto Rico services later next year.
-By Kristina Peterson, Dow Jones Newswires; 202-862-6619; kristina.peterson@dowjones.com