DOJ approves Alltel/Midwest merger

[Dogma]

I don't quite understand why MN 11 was not required to be divested? Was that the deal where Alltel was a minority holder of that license (49% stake holder)?




FOR IMMEDIATE RELEASE
THURSDAY, SEPTEMBER 7, 2006 (202) 514-2007
WWW.USDOJ.GOV TDD (202) 514-1888


FINAL


JUSTICE DEPARTMENT REQUIRES DIVESTITURES IN
ALLTEL’S ACQUISITION OF MIDWEST WIRELESS

Sale of Assets in Minnesota Will Preserve Competition for
Rural Consumers of Mobile Wireless Services

WASHINGTON — ALLTEL Corporation has agreed to divest assets in rural areas of Minnesota in order to proceed with its $1.075 billion acquisition of Midwest Wireless Holdings LLC, the Justice Department announced today. The Department said that the deal as originally proposed would have resulted in higher prices, lower quality, and diminished investment in network improvements for consumers of mobile wireless telecommunications services in four areas where both ALLTEL and Midwest Wireless currently operate.

The Department’s Antitrust Division filed a civil lawsuit today in U.S. District Court in Minneapolis to block the proposed transaction. At the same time, the Department filed a proposed consent decree that, if approved by the court, would resolve the lawsuit and the Department’s anticompetitive concerns.

ALLTEL and Midwest Wireless are regional mobile wireless telecommunications service providers and serve many rural markets. Although a combination of these two regional providers gives the merged firm the benefit of having a larger service area footprint, the divestitures are required to assure continued competition in specific markets where ALLTEL and Midwest Wireless are each other’s most significant competitors, the Department said.

“The Department’s action ensures that wireless telephone consumers will continue to obtain the benefits of competition--lower prices and higher quality,” said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. “The required divestitures preserve competition in rural areas where consumers often have fewer choices for wireless telephone services.”


Under the terms of the proposed consent decree, the merged firm must divest ALLTEL’s mobile wireless telecommunications services business, including cellular spectrum and customers, in four Minnesota areas that are comprised of 28 counties. ALLTEL is not required to divest assets used solely to provide roaming services in these four areas to carriers who use GSM technology; Midwest Wireless does not currently offer this service in these areas and therefore the proposed acquisition will not lessen competition in providing the service.

ALLTEL must make the divestitures in the following counties: Blue Earth, Brown, Chippewa, Cottonwood, Fairbault, Freeborn, Jackson, Kandiyohi, Lac qui Parle, Le Sueuer, Lincoln, Lyon, Martin, McLeod, Meeker, Murray, Nicollet, Nobles, Pipestone, Redwood, Renville, Rice, Rock, Sibley, Steele, Waseca, Watowan and Yellow Medicine.

ALLTEL, headquartered in Little Rock, Arkansas, is the fifth-largest provider of mobile wireless voice and data services in the United States, serving approximately 11 million customers. ALLTEL also provides roaming and other wireless services in 35 states to other mobile wireless providers who use the CDMA, TDMA and GSM technologies. In 2005, ALLTEL earned wireless revenues of approximately $6.572 billion.

Midwest Wireless, with headquarters in Mankato, Minnesota, serves approximately 440,000 wireless customers in three states. Midwest Wireless also provides roaming and other wireless services to other mobile wireless providers who use CDMA technology. In 2005, Midwest Wireless earned approximately $264 million in revenues.

The Department has coordinated with the Federal Communications Commission (FCC) throughout its investigation, and the transaction is also subject to review by the FCC. The State of Minnesota joined the Department’s lawsuit and proposed decree.

As required by the Tunney Act, the proposed settlement, along with the Department’s Competitive Impact Statement, will be published in The Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Nancy M. Goodman, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, United States Department of Justice, 1401 H Street, N.W., Suite 8000, Washington, D.C. 20530 (202-514-5621).

At the conclusion of the 60-day comment period, the U.S. District Court for the District of Minnesota may enter the proposed consent decree upon finding that it is in the public interest.

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06-

[TKR]

I don't mean to misdirect this thread, but I could never understand why Cingular/ATTWS was allowed to keep BOTH the cellular A and B bands in some markets, most notably Florida. Forcing a spectrum swap with a PCS carrier or carriers in order to makd them whole on capacity would have made more sense to me than to ever allow any one carrier to have both the A and B side in any market. The 800 MHz spectrum is just too valuable and limited (only two slots) to allow that, as the holder has a distinct coveage advantage simply due to the nature of the band. I'd like to see the FCC force a shuffle of the deck and re-allocate the whole PCS and Celluar bands across more carriers, allocating all carriers slices of each. Let's be real, how many rural areas require anywhere near the full 25 MHz of an A or B side allowance? It's wasted spectrum that could/should be used to aid competition's ability to cover more areas. Conversely, could not A/B "cellular" carriers could actually benefit in many metro areas if they also had 1900 in their tool box instead of just 800 to play with?

I know, I'm crazy and it won't happen.

[UFO]

Just wanting to point the humerous point of the thread being titled a merger, while the article refers to it as an acquisition. In the corporate world, I guess that's how "mergers" usually go, with one company completely controlling and making the decisions for the other.

[agentHibby]

I don't think the FCC given the concent yet on the deal. The FCC may say that MN RSA #11 has to go as well. If Alltel divests the network I am guessing either US Cellular or Verizon would probably end up with the network. Maybe Alltel can do a network swap with someone.

For example US Cellular sells it network in West Virginia, Maryland, Pennsylvania to Alltel and Alltel gives them Southern MN.
Cingular does have alot places that Alltel would like in TX and FL, but I doubt Cingular would do it.

[agentHibby]

Originally Posted by TKR I don't mean to misdirect this thread, but I could never understand why Cingular/ATTWS was allowed to keep BOTH the cellular A and B bands in some markets, most notably Florida.

This has to deal with market control. The only other providers in most of divestment areas are Sprint and T-Mobile. In Florida you have Sprint T-Mobile Verizon and some places Metro PCS. The number of provider don't matter it is the percent of customers you are going to have in a market that matters. In FL I am sure Cingular just barely made it. While out in more rural markets in most cases the 2 cellular providers usually have most of the customers so combining the two would lead to most of customers being with one provider in market. So there can be fair competition in a market the A and B cannot be with one one provider and has to be divested.

Cingular is in best position to offer a swap to Alltel in many markets without losing a single customer or licensed market.

[Dogma]

Originally Posted by UFO Just wanting to point the humerous point of the thread being titled a merger, while the article refers to it as an acquisition. In the corporate world, I guess that's how "mergers" usually go, with one company completely controlling and making the decisions for the other.

Sorry, maybe....."DOJ approves Alltel/Midwest hostile takeover" would have been more to your liking.

I think most people understand Midwest is not calling the shots after this.

[UFO]

No, it was fine, it was really more of a shot at corporate America because everything is a merger and I just find that funny. Using the same logic, I could buy your ... old tennis shoes and leave you with an old shoestring, I suppose corporate America would consider that as some type of merger between us.

[Fire14]

Originally Posted by agentHibby Cingular is in best position to offer a swap to Alltel in many markets without losing a single customer or licensed market.

Weren't parts of these areas that Alltel & Cingular had made a deal for Cingular to buy or swap areas & the deal fell thru about 2 months ago?
Maybe now the deal will go back into effect.