VZW will have to divest some markets to win DoJ approval of RCC deal

[RJB]

The Justice Department said Verizon Wireless must divest some cellular assets in Vermont, New York and Washington to win government approval of its $2.67 billion purchase of Rural Cellular Corp.

The department filed a civil lawsuit today in U.S. District Court for the District of Columbia to block the proposed transaction, but concurrently filed a proposed consent decree that, if approved by the court, would resolve its competitive concerns and the lawsuit.

“These divestitures are necessary to preserve the benefits of competition for residents throughout the state of Vermont and in areas of New York and Washington,” said Thomas Barnett, assistant attorney general for antitrust.

The Justice Department said Verizon Wireless and RCC are the most significant competitors in Vermont’s two rural service areas and the Burlington market. The same is true of the two wireless carriers in one rural market in New York and two in Washington. According to the complaint, the proposed transaction would substantially reduce competition in those areas, where Verizon Wireless and RCC collectively serve more than 60% of subscribers.

The Federal Communications Commission is also reviewing the Verizon Wireless-RCC deal, but concerns raised by Sen. Bernie Sanders (I-Vt.) and consumer groups have complicated the agency’s analysis.

Sanders injected himself into the matter last October by recommending the FCC either block the transaction or impose extensive conditions to address competitive concerns and the consequences of a national CDMA cellphone carrier, No. 2 Verizon Wireless, purchasing GSM operator RCC in Vermont. RCC runs CDMA technology on portions of its network.

“We’re still evaluating the application and we hope to make a decision soon,” said an FCC spokesman.

Verizon Wireless also has a pending acquisition of Alltel Communications L.L.C., which will require similar approval.

VZW will have to divest some markets to win DoJ approval of RCC deal - RCR Wireless News