Verizon-Alltel merger approved by DOJ, but with conditions

By Tim Conneally | Published October 31, 2008, 1:15 PM

The United States Department of Justice has conditionally approved Verizon's acquisition of Alltel, provided Verizon divests from 100 markets.

Verizon and Alltel issued joint statements last summer announcing the $28.1 billion acquisition. The combination would result in the single largest mobile network in the United States. As such, the Antitrust Division of the U.S Department of Justice has also required one of the biggest mobile sell-offs thus far in order for the merger to take place.

Thomas O. Barnett, Assistant Attorney General, Antitrust Division said, "The divestitures required are necessary to protect wireless customers and are among the most extensive required by the Department in a wireless case."

Without the mandatory divestitures, the department considers the merger to be a substantial blow to competition that would be a detriment to consumers. The group, along with the Attorneys General of seven U.S. states, therefore filed a civil lawsuit in Washington DC yesterday to block the merger if Verizon does not vacate 94 cellular marketing areas where Verizon and Alltel are each other's closest competitor, as determined by the FCC.

The FCC's review of the case is scheduled for Tuesday of next week.

Comments

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I'll just be happy when they quit "zone" controlling cities.

For example.. I'd love to get Verizon FIOS, but I was told Verizon can't market in my city because AT&T UVERSE already had my zone/city. This frustrates the hell out of me [cable companies do it too].

I dont want to have to choose WHERE I live just to be able to use a service, I want to live anywhere I darn well can afford/want too and select who I want as my content provider (Internet and/or TV signals].

This would be great as it would allow you to actually have best of what is available and price.

Example.. Cable in my area offers their internet 10meg connections at $35, but Phone company (AT&T in this case) only has 6meg connections at this price.

So it'd be nice to get the 10meg internet from the local cable company and get my HiDef TV from AT&T Fiber Optic as the Phone company Fiber Optic quality is superior to what the local Cable companies are providing.

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I am a pretty smart guy but i can honestly say I dont see how this would be good for anyone. Unless i missunderstand the DOJ wants verizon/alltel to not advertise in 94 areas where they would otherwise be allowed to show commercials and such? could someone please break it down a little for me, the verbage is a bit confusing to me.

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In order for the DOJ to approve the merger Verizon/Alltel would have to sell towers in the markets where they are the only major carriers. The idea being that by divesting those assets the merged company would still have compete against the company that purchases those divested assets(most likely Sprint). If Verizon/Alltel weren't required to sell those towers the customers that live in those markets would have little or no choice on which carrier provides their service.

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Now unless i am mistaken large providers ecentialy rent out towers to give companies that otherwise cant afford to lay there own infastucture, the means to operate (boost mobile, and other such "little guys"). the only carreers that have towers (and i could be totaly wrong) are ATT, SPRINT, VZ, Tmobile. the other companies simply rent towers from the big ones. or am i completely off track?

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Companies like Virgin Mobile, Tracphone, PagePlus, etc. that don't have their own tower's are what the industry calls MVNOs(mobile virtual network operators). Boost mobile doesn't really fall under that category because it is partially owned by Sprint Nextel.

There are a few other carriers other from the big 4 you mentioned. Most of them are fairly regional. MetroPCS, Leap Wireless' Cricket, US Cellular are a couple of the larger examples of regional carriers that have their own towers.. There are dozens of smaller carriers but the majority serve fairly rural areas.

Most likely the majority of the towers that Verizon/Alltel divest will get bought up by Sprint(due to technical issues) but a few regional carriers might buy up towers in a few select market as a way to expand their coverage maps.

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Yes, but it still won't work out in the end because of a number of issues. What will happen if noone is interested in buying, or something 'smaller' does, and then goes down in the near or even not so near future? All they have to do is wait....they're still playing on their terms.

This is exactly what happened to ATT and look at what's happened a number of years later? All the baby Bells grew, and grew, and changed, and merged; in the end they all cannibalized each other until ATT just became what it was, even BIGGER now. I witnessed in 5 short years, Bellsouth Wireless changing into Cingular, and Cingular eating up other smaller mobile carriers - and voila, in the end, merging with ATT. Bellsouth itself then merged with ATT as well. How does that make any sense whatsoever? Breaking it up, just to allow it to come together again later on...even bigger and more menacing? Now, in my area - ATT has no competitors, sure there are tiny phone companies around, but they all answer to ATT. And of course the ever expanding monster Comcast, trying to hold its own as well.

While Verizon + Alltel isn't quite as horrendous, selling out in 94 territories is nothing in the big picture.

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Unless these towers are completely rewired so ATT/Cingular can use them, they'll be only useful to a number of CDMA carriers. This being said, it's not really a huge loss to any consumer b/c we pretty much piggy back on other networks when there's no service.

One of the best thing about Verizon. They can use any network that is out of their "normal" area and none of their plans have roam fees.

I'm aware there's not many carriers that DO have roam fees, but about 3 or 4 year ago Alltel still did, so it's feesible that many others still do as well.

... I guess what I'm saying is this "selling off" of towers is only going to be a bad thing if they are disallowed to build new ones and/or they're bought by ATT.

... and I'll be super pissed if Toledo is sold, although the number of carriers that have local access are pretty good O:-)

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No such thing as a "free market" economy. It's more of a "flexible market".

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Then what would be the point of buying Alltel then thats just stupid.

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