- The FCC gave Bell Canada the green light to buy Ziply and expand fiber reach
- The agency notably waived its 25% foreign ownership restriction
- Bell/Ziply is just one of many telecom M&A deals running rampant
Telecom deal approvals keep on coming at the Federal Communications Commission (FCC), which just signed off on Bell Canada’s acquisition of Ziply Fiber for $5.1 billion (CAN $7 billion).
Bell first announced its intent to buy Ziply in November 2024, as it aims to become the third-largest fiber broadband provider in North America after AT&T and Verizon. The Canadian operator expects to have about 9 million fiber locations once the deal closes, but could potentially reach up to 16 million passings from its new joint venture, Network FiberCo.
The FCC concluded the transaction will not reduce competition or consumer choice, given that Bell and Ziply have no geographic overlap in their operating footprints.
Ziply, which currently has over 1.3 million fiber locations across Washington, Oregon, Idaho and Montana, will continue to operate independently under its own name. Bell is set to expand its fiber footprint to more than 12 million locations by the end of 2028, plus it will help Ziply accelerate last-mile fiber deployments via the JV.
“We also find no harms associated with USF programs,” the FCC wrote, noting Bell will be responsible for meeting Ziply’s subsidized rural buildout requirements. Ziply in 2020 scored $57 million in Rural Digital Opportunity Fund (RDOF) support to deploy fiber to more than 21,000 locations.
The company already had plans to apply for Broadband Equity, Access and Deployment (BEAD) funding, and it intends to continue exploring its options post-acquisition, Ziply CEO Harold Zeitz previously told Fierce.
Bell/Ziply got the regulatory green light shortly after the FCC okayed T-Mobile’s USCellular and Metronet acquisitions – approval that came once T-Mobile axed its diversity, equity and inclusion (DEI) programs. The Commission separately signed off on SES’s Intelsat purchase, as satellite broadband is poised to play a bigger role in BEAD.
FCC rules normally prohibit foreign entities from controlling more than 25% of the equity or voting interests in a U.S. company. But in the case of Bell/Ziply, the agency said the deal would serve the public interest and thus waived that requirement.
“This is not a transaction that involves products crossing the border which one side or the other believes should be subject to a tariff,” said New Street Research’s Blair Levin in a note earlier this year. “The only thing crossing the border is financial capital and expertise.”
Fiber consolidation runs wild
Bell’s acquisition of Ziply is one of many mergers running rampant in the telecom space. You’ve got the big deals like Verizon/Frontier, Charter/Cox and AT&T’s acquisition of Lumen’s consumer fiber biz, but there are also a ton of regional fiber players scooping one another up.
Despite all the consolidation already happening, the Big 3 aren’t done buying. NSR predicts AT&T, T-Mobile and Verizon will continue to acquire fiber assets, noting altafiber and Brightspeed could be two potential targets.
“Among potential ILEC targets, Brightspeed is the largest, but altafiber controls the most valuable market not already controlled by AT&T and Verizon,” wrote New Street in its latest report on broadband market trends.
However, don’t count on the next mega deal to happen right away. S&P Global Market Intelligence found most telecom and media deals this year were valued under $10 billion, as “rising policy uncertainty” could potentially mean more smaller-sized acquisitions.