The FCC signed off on the $5.1 billion ($7 billion Canadian) merger between Bell Canada parent company BCE and Ziply Fiber without any conditions despite current tensions in the U.S.-Canada relationship that could have upended the deal altogether.
Impact: The approval, which followed closely on the heels of the FCC greenlighting two T-Mobile transactions, sets the stage for the deal to close and for the two companies to start work on increasing their combined footprint to as many as 16 million locations by the end of 2028. The deal, first announced in November 2024 after BCE lost out in its effort to acquire Frontier, includes $3.6 billion in cash and BCE’s assumption of $1.44 billion in debt. It also represents the Canadian operator’s first foray into the U.S. fiber market, where BCE sees opportunities to enhance its growth profile and strategic position while also diversifying its footprint in the “large, underpenetrated U.S. fiber market.” In its approval announcement, the FCC didn’t find any harm to the public interest and in fact waived the prohibition against foreign entities controlling more than 25% of a domestic telecom company because it would serve the public interest. Nor did the FCC see any loss of competition that might stem from the transaction, primarily because there’s no current overlap between the companies’ current footprints. The lack of public comment to the FCC opposing the deal didn’t hurt either. BCE will be held accountable for Ziply’s RDOF commitment, which includes deploying fiber to more than 21,000 locations, as well as its CAF Phase II responsibilities, and Ziply will reportedly continue with its plans to apply for BEAD funding.
Impact: The approval, which followed closely on the heels of the FCC greenlighting two T-Mobile transactions, sets the stage for the deal to close and for the two companies to start work on increasing their combined footprint to as many as 16 million locations by the end of 2028. The deal, first announced in November 2024 after BCE lost out in its effort to acquire Frontier, includes $3.6 billion in cash and BCE’s assumption of $1.44 billion in debt. It also represents the Canadian operator’s first foray into the U.S. fiber market, where BCE sees opportunities to enhance its growth profile and strategic position while also diversifying its footprint in the “large, underpenetrated U.S. fiber market.” In its approval announcement, the FCC didn’t find any harm to the public interest and in fact waived the prohibition against foreign entities controlling more than 25% of a domestic telecom company because it would serve the public interest. Nor did the FCC see any loss of competition that might stem from the transaction, primarily because there’s no current overlap between the companies’ current footprints. The lack of public comment to the FCC opposing the deal didn’t hurt either. BCE will be held accountable for Ziply’s RDOF commitment, which includes deploying fiber to more than 21,000 locations, as well as its CAF Phase II responsibilities, and Ziply will reportedly continue with its plans to apply for BEAD funding.
But BCE has bigger ambitions than just helping Ziply reach a goal it already had put in motion and in May formed a joint venture with Canada’s Public Sector Pension Investment Board to create a separate company (known as Network FiberCo for now) to increase the Ziply expansion to as many as 8 million total locations, with a focus on underserved areas of the U.S. PSP will invest $1.5 billion for a 51% share in the JV, giving BCE a 49% stake. If the expansion proceeds as planned, BCE could end up with 16 million North American fiber passings, potentially making it the third largest fiber broadband provider on the continent after AT&T and Verizon. AT&T ultimately plans to reach 60 million total fiber passings while Verizon has said it eventually will cover between 35 and 40 million thanks to its Frontier acquisition. T-Mobile, meanwhile, has set a 12-15 million fiber goal for itself. With fiber M&A seemingly accelerating, BCE may have gotten in to the American fiber market just in time. Wall Street analysts predict more transaction activity on the horizon, and New Street Research recently said altafiber and Brightspeed could be potential M&A targets in the near term.
