Last Friday, the FCC approved the proposed sale of Alltel to a holding company controlled by the principals of two private equity firms—TPG Capital and GS Capital Partners, an affiliate of the Goldman Sachs Group. However, the FCC’s decision to impose conditions relating to universal service fund (USF) support and E911 location accuracy drew protests from several FCC members who complained that such terms bear no relevance to the transaction at hand and are premature in the face of ongoing FCC proceedings to implement USF reform. Alltel ranks as the fifth largest wireless carrier in the U.S. with 12 million subscribers. Declaring that the $27.5 billion acquisition serves the public interest, the FCC found that the transaction would not harm competition in the U.S. mobile telephony market, and would give Alltel access to additional capital necessary to deploy advanced services to rural customers. Notwithstanding the absence of competitive concerns, the agency decided, however, to cap the high-cost USF support that Alltel receives as a competitive eligible telecommunications carrier (CETC) at 2007 levels on an annualized basis, unless Alltel (1) files cost data showing that its per-line costs are less than the capped funding level, and (2) shows compliance with E911 location accuracy standards as measured at the public safety answering point (PSAP). Criticizing the condition as “a jack-in-the-box surprise” and as “an illogical afterthought,” Commissioner Jonathan Adelstein—in a concurring statement—questioned how Alltel could fulfill the E911 provision “given that the Commission currently has an open proceeding addressing the details of how carriers must implement PSAP-level accuracy.” Commissioner Michael Copps, who dissented in part, expressed fear that the CETC cap “will be an even greater hindrance to rational, comprehensive USF reform.” Although voting in favor of the order, Commissioner Robert McDowell warned that the CETC cap “prejudices the Commission’s open docket considering [USF] support distribution,” adding that CETC support “is not raised or discussed in the record of this proceeding.”