Wireless Bureau Wants Answers on Verizon Wireless’s Buy of Alltel
The Wireless Bureau is asking a battery of additional questions about Verizon Wireless’s acquisition of Alltel, which it forwarded Wednesday to attorneys for the two companies. The questions largely probe the promised benefits to consumers the companies laid out when they announced their merger. The bureau posed 17 questions, often with multiple parts, in a document sent to former FCC Commissioner Kathleen Abernathy and former NTIA Administrator Nancy Victory, attorneys for the companies.
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One official said Thursday both companies want the FCC to move quickly. “There’s some real pressure to try to do this in the election day meeting Nov. 4. The timing is affected by that,” the official said. “It [would mean] a tremendous change in the wireless market.”
“This is fairly routine,” said a Verizon spokesman. “The FCC often asks questions to make sure it understands fully what’s in the application and public interest filing. This is a good sign because it shows the commission is moving ahead. Obviously, we'll respond in detail.” The letter, signed by acting Bureau Chief James Schlichting, asks for responses by Sept. 22.
The bureau asks about Verizon’s plans for Alltel’s GSM network, whether it will be shut down, and the timetable for doing so. Alternately, it asks, “Does Verizon Wireless have plans to maintain, upgrade and expand the GSM network?” In a question important to smaller carriers, the bureau asks Verizon whether it plans to renew GSM roaming contracts when they expire.
The filing notes that Verizon Wireless has promised to upgrade all of Alltel’s markets to EV-DO Rev. A. The bureau asks the companies to “estimate, if possible, by how many months” the merger would speed up rollout of these advanced networks in Alltel territory. Similarly, the bureau asks for the timetable in rolling out long-term evolution (LTE). “How much faster will the deployment increase as a result of the merger?” the bureau asks.
Many of the questions regard alleged cost savings from the merger. The bureau asks the companies to justify claims that the merger will result in $9 billion in savings. “Provide support for the claim that Verizon Wireless’s costs are lower than Alltel’s,” the bureau instructs. “Explain how the Applicants calculated the savings incurred resulting from elimination of the Alltel call center.” The bureau asks questions about churn rates, requesting side by side data on customer retention from both companies.