VZW could give up 15% of Alltel customers through proposed merger

[Blue4Life]

VZW could give up 15% of Alltel customers through proposed merger
July 23 2008 - 1:40 pm EDT | Jeffrey Silva | RCR Wireless News

Verizon Wireless, positioning itself to regain the top spot in the mobile-phone industry, agreed to initial divestiture requirements by the Department of Justice and offered roaming concessions in hopes of winning government approval of its proposed $28 billion purchase of Alltel Communications L.L.C. But it remains unclear whether the No. 2 wireless provider will have to take additional steps to seal the deal before year’s end, when Republicans at the Federal Communications Commission could lose their majority edge with the possible departure of Republican Commissioner Deborah Taylor Tate.

In a new FCC filing, Verizon Wireless informed the agency it had consented to sell wireless properties in 85 cellular markets in 18 states to satisfy antitrust concerns after early discussions with DoJ. Verizon Wireless said the markets — mostly rural service areas — encompass wireless assets that overlap with those of Alltel throughout North Dakota and South Dakota as well certain areas in California, Colorado, Georgia, Idaho, Illinois, Kansas, Minnesota, Montana, Nevada, New Mexico, North Carolina, Ohio, South Carolina, Utah, Virginia and Wyoming.

The divestitures represent about 15% of Alltel’s 13 million subscribers, according to analysts at Stifel, Nicolaus & Co. They said possible candidates for those wireless assets include AT&T Mobility, Leap Wireless International Inc., MetroPCS Communications Inc. and rural carriers.

Even with the divestitures and roaming provisions it could be tricky getting the Verizon Wireless-Alltel deal through the FCC before next year, when a new administration and Congress will be in place.

“The major risk factor, in our view, is timing at the FCC, which, depending on the relative focus and aggressiveness of lobbying, will likely consider additional conditions related to roaming, special access or ‘open access,’” stated Stifel analysts. “In a move designed to anticipate the roaming issue, Verizon yesterday made two commitments to the FCC to maintain the terms of existing roaming agreements with Alltel. The possible departure of Commissioner Tate at the end of the year would create a 2-2 deadlock, which puts a premium on timely FCC review.”

Verizon Wireless announced the Alltel acquisition last month. Public comments on the transaction, which if approved would enable Verizon Wireless to surpass AT&T Mobility as the nation’s largest cellular carrier, are due July 25 at the FCC. Meantime, the FCC is scheduled to rule Aug. 1 on Verizon Wireless’ $2.67 billion play for Rural Cellular Corp.

The combination of the two acquisitions and Verizon Wireless’ big spectrum winnings at the 700 MHz auction earlier this year has prompted competitive concerns among key Democrats in Congress and roaming angst among lawmakers and small, medium and large carriers.

Moreover, a group of rural wireless providers recently petitioned the FCC to reinstate the spectrum cap, which was axed by the FCC in 2003.

Verizon Wireless and Alltel, both CDMA operators, pledged in their merger applications to honor existing CDMA and GSM roaming agreements with wireless providers.

Verizon Wireless went further in its latest FCC submission, offering two commitments upon the closing of the deal.

“First, each regional, small and/or rural carrier that has a roaming agreement with Alltel will have the option to keep the rates set forth in that roaming agreement in force for the full term of the agreement, notwithstanding any change of control or termination for convenience provisions that would give Verizon Wireless the right to accelerate the termination of such agreement,” the carrier told the FCC. “Second, each such regional, small and/or rural carrier that currently has roaming agreements with both Alltel and Verizon Wireless will have the option to select either agreement to govern all roaming traffic between it and post-merger Verizon Wireless.”

[TNDan21]

This is a map of the properties that Verizon is proposing to divest.

[Mobile Mike]

So this means about 2.1 million (the 15%) of Alltel's total customer base (13 million) would be divested.

Judging from the map, there aren't any major population centers that would be divested. There are some counties that are in major metro areas (like Cleveland and Atlanta), but that's it.

I hope Leap, Metro, and/or other small carriers get the divested properties instead of AT&T. It could be a boon for both Cricket and MetroPCS in the long run.

[Fathead]

That plan has them keeping both the A and B blocks here. Interesting.

[mframe]

Originally Posted by Fathead

That plan has them keeping both the A and B blocks here. Interesting.

Likewise, in Arizona.

[SmArTeStChIlD421]

well keep in mind that it still isn't known whether or not more steps will need to be taken on Verizon's part. and i as well don't want to see these properties go to AT&T

[music4praise]

Originally Posted by Mobile Mike

So this means about 2.1 million (the 15%) of Alltel's total customer base (13 million) would be divested.

Judging from the map, there aren't any major population centers that would be divested. There are some counties that are in major metro areas (like Cleveland and Atlanta), but that's it.

I hope Leap, Metro, and/or other small carriers get the divested properties instead of AT&T. It could be a boon for both Cricket and MetroPCS in the long run.

I think US Cellular would be a much more likely candidate. It is also much more like Alltel in the kinds of plans it offers. I know if I were divested to Cricket or MetroPCS, I would have to change carrier because I need a reasonable kind of national service.

I hope the whole thing gets rejected. For many Alltel customers, except those who chase the latest phones, the deal isn't very appealing.

[blsemp]

I can't help saying this but I really wish they would divest all of South Carolina and AT&T would pick it up. I just have 850 mhz on my mine.

[Eric47]

ATT would essentially have Cell in Almost all of the southern states, and covering completly almost all of them good news for me

[RadioFoneGuy]

The Map definately show them trying to Pick up both Cellular A and B bands in some area.

Michigan for example is 2 or 3 RSA where they will have both bands.

Verizon has the nation wide 700 mhz licence I dont think the FCC will go for dual Cellular Bands especially all the Focus on AT&T getting away with it in Florida.

[KyleAndMelissa22]

Its weird how my market (Cherokee County, SC) which is right in between Greenville, SC & Charlotte, NC
is up for divestature. but the surrounding areas like Charlotte and Greenville are not.

If this area gets divested, there will be a coverage / licence gap for people in
Charlotte travelling to Greenville along I-85 and vice versa.

If AT&T gets it, then they'll want to make it GSM.
So hopefully USCC (already in Asheville) or Cricket (already in Charlotte) could get ahold of the Alltel spectrum.

Remember AT&T's Carolina network has been around for I believe 10 years, and is very mature.
AT&T would just have to divest the Alltel spectrum again, because then they'd have too much.

If it really does get divested, then maybe I'll just move my current plan and phone to Verizon's network anyway.

.....................

Here's Cherokee County, SC and notice how everything near me east and west is untouched:


On I side, why isn't my market inside of Charlotte or Greenville's?
It doesn't make sense to call the counties of Cherokee, Union, Chester & Fairfield a "market."

[RadioFoneGuy]

I think its going to be a cluster just like the whole Alltel / Midwest / Unicel mess.
Some customers will get ETF letters others will get the welcome to Borg letters.

Nothing personal Kyle but any PCS network no matter how mature can benefit from 850. I work in a dual band network and have some areas where there were more 1900 towers than 850. When some of the 1900 was update to 850 the result are phenominal. Just watching a PN or BCCH RSSI (db) will show -10 to -15 improvement with a direct line of site to rule out terrain or vegetation.
In this test both 850 and 1900 are on the same height, same radio power and the 1900 antennas are actually rated for higher gain.

I understand where your comming from thou, I wouldnt want to get caught swinging in the breeze and lose half the network that I was used to having access to.

Its going to be an interesting year and probably like Rural / Unicel probably a hundred petitions later.

[larry]

'Verizon Wireless and Alltel, both CDMA operators, pledged in their merger applications to honor existing CDMA and GSM roaming agreements with wireless providers'.

There was some talk about Verizon possibily trying to eliminate roaming with Sprint and other carriers when the merger with Alltel was first announced but I figured they would have to honor those agreements. Did anyone REALLY think that Sprint was going to lose roaming coverage out of this? I never did for one second.

Also I don't see Metro or Leap being interested in such rural coverage. Those two normally are interested in large metro areas and big cities where they can make more money. But who knows.

[KyleAndMelissa22]

I hope most of it here could just stay in one piece,
like Alltel has the entire state of SC set up to be.

Verizon is chopping and screwing up this area (according to the divest map),
and thats definitely not in the best interest of Alltel customers in this area.

Maybe they wouldn't have to divest at all, or at least not as much, if the FCC / DOJ says ok.
These proposals are only ideas, not intentions, right?

According to the current plans for divest, I wouldn't be able to drive out of my county,
towards Greenville or Charlotte, without losing signal at the county line.


Anyway, I guess I'll be able to goto Verizon anyway (Verizon's current network SID 139)
if the Alltel network gets chopped and screwed, and they should honor my plan and all Alltel features.

[KyleAndMelissa22]

Also, in addition to 800, Alltel does have a PCS license (Block E) that covers most of SC & NC,
maybe this could be divested instead?

[RadioFoneGuy]

I wouldnt sweat it too much, theres going to be so many people at the FCC and DOJ looking at this.

In areas with dual Cellular Bands more than likely Verizon will probably have to spin off those markets and if its only Alltel and Verizon in that area then they will probably have to spin off the customers as well.

Look at Dobson they had to spin off all overlaping 850 markets and customers, and that was on a much smaller scale.

If Dobson and Unicel would have held out another year they would have been able to pick up some nice properties.

[spleck]

Originally Posted by KyleAndMelissa22

Verizon is chopping and screwing up this area (according to the divest map),
and thats definitely not in the best interest of Alltel customers in this area.

According to the current plans for divest, I wouldn't be able to drive out of my county,
towards Greenville or Charlotte, without losing signal at the county line.

You wouldn't have an issue unless you got divested to Scott Ford or something like Cricket/MetroPCS. I don't understand why you think you would lose signal at the county line. They're not going to divest your area into it own separate entity. It will probably be acquired by someone with an existing network even if it means you'll need a new phone. If you got acquired by VZW, they already have cellular licenses over the areas they are proposing divestiture.

Maybe they wouldn't have to divest at all, or at least not as much, if the FCC / DOJ says ok.
These proposals are only ideas, not intentions, right?

I would look at this as more of an early bid--the cost is going to go up, not down. The FCC/DOJ is more likely to require MORE divestitures. If VZW has already considered divesting an area, its probably because even they know they have no grounds for keeping it.

[KyleAndMelissa22]

Originally Posted by spleck

I don't understand why you think you would lose signal at the county line. They're not going to divest your area into it own separate entity. It will probably be acquired by someone with an existing network even if it means you'll need a new phone.

What I mean is that there will be a license gap surrounding my county,
at which point I'd lose signal if I cross that border. (which I do VERY frequently).

The Hard handoff occurs when crossing a license border with other carriers.
One example of a border close to me already is the Alltel - USCC border between Western NC & Upstate SC.
(Both use Cellular Band B)

[KyleAndMelissa22]

Originally Posted by spleck

If you got acquired by VZW, they already have cell