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Verizon Wireless Will Have to Divest Assets to Buy RCC

Article Comments  32  

Jun 10, 2008, 12:31 PM   by Eric M. Zeman
updated Jun 10, 2008, 4:03 PM

The Department of Justice has said that in order to acquire Rural Cellular Corporation, Verizon Wireless must divest some of RCC's existing wireless assets. In particular, Verizon Wireless will have to sell off some of RCC's assets in Vermont, New York, and Washington states. The DOJ has filed a lawsuit that will force Verizon Wireless to comply with the divestiture before the acquisition can proceed. Verizon Wireless announced its intent to acquire Rural Cellular Corporation for $2.7 billion in July 2007.

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Jun 10, 2008, 1:56 PM

for those who know a bit more then me

Is this even a big deal?

Who would buy Unicell from Verizon?

would the loss of Unicell hurt Verizon at all in relation to acquired alltel?
Those 80 million subs you guys thought you had? That figure is going to go down. While adding Alltel to the fold will add subs, it will not add what you guys thought it would.
no it will not hurt them these are expected little hurtles.
1. Yes it is a big deal. If companies can just merge together to have no or little competition in a given market plus control roaming fees then competition will go away and pricing will sharply increase. The term of the VZ/Unicell deal was $2.67B.
I can tell you as someone who is close to this, the contents of the DOJ ruling are nothing new or unexpected. Although Verizon was attempting to hold on to these licenses, I think everyone figured that this would eventually be the outcome.
Not only ...

Jun 10, 2008, 3:03 PM

Alltel?? This decision has nothing to do with them?

The reference to alltel is false. There is no areas being divested due to the proposed alltel deal. This is only in reference to the Rurual Cellular deal (Unicell) and will covered the RSA and MSA licenses that they felt covered too many people not allowing fair competition.

The process is four part to combine into what Verizon wants to do with Alltel and Unicell.

1. DOJ Approval of Unicell (this article)
2. FCC Approval of Unicell
3. DOJ Approval of Alltel
4. FCC Approval of Alltel

There will be more requirements to divest by the government resulting from the alltel deal just not this....
Well it has to deal with them somewhat as a framework for the Alltel proposed merger. In addition, if this doesn’t go through, the divestitures and other conditions, perhaps the Alltel proposed merger doesn’t go through. Howe...
This does impact the Alltel deal, but probably not significantly. In some areas, such as rural Minnesota, RCC, Alltel, and Cellular One (Western Wireless) were the big players. When Alltel bought Cellular One and Midwest Wireless, there were require...

Jun 11, 2008, 11:34 AM

Is it just me...

Or did some of the words in the article change company names from Alltel to RCC? 🤨

Jun 10, 2008, 2:45 PM

Verizon in Vermont

This is very good news for cell phone users in the State of Vermont. Unicel and Verizon are the only two real options, and with VZW buying Unicel, there wouldn't be a choice.

The other reason besides monopoly considerations as to why this would be a problem is because Unicel is the only GSM carrier in the State, so T-Mobile/ATT users couldn't even roam if the GSM towers were discontinued.

I believe it's most likely that ATT will purchase the Unicel assets in Vermont, as it was mentioned a few months ago that Verizon and ATT would trade assets in a few areas where there is no competition due to acquisitions of smaller companies.
Yeah, all this DOJ thing did was reaffirm what AT&T and Verizon already were going to do. I think this just sets it in stone, but I believe it would have happened anyways.

Jun 10, 2008, 2:31 PM

From DOJ's website about this.

http://www.usdoj.gov/atr/public/press_releases/2008/ ... »

"The Department of Justice announced today that it will require Verizon Communications Corp. (Verizon) to divest assets in six geographic areas in Vermont, New York and Washington in order to proceed with its $2.7 billion acquisition of Rural Cellular Corp. (RCC), which does business under the Unicel name. The Department said that the transaction as originally proposed would have substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, potentially resulting in higher prices, lower quality and reduced network investments. "

"The divestitures are required to assure continued competition in markets where th...

Jun 10, 2008, 12:55 PM

Can someone explain?

can someone explain why?
It's more than likely because Verizon and Unicel overlap in those areas of Washington, New York, and Vermont. I'm hoping that they aren't divesting EVERYTHING in Washington and Vermont because they don't overlap everywhere. Also, this is just somethin...
Yes.. VZ bought out Unicell also so regulators are afraid of too little competition and an increase in roaming rates because of this buyout as well as the Alltel one.

Some Info "The markets that DOJ wants Verizon divestitures are in Vermont, New Y...
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