FCC Poised to Approve Roaming Extensions as Part of Verizon-Alltel Merger
The FCC seems near agreement on imposition of roaming extensions on Verizon Wireless as a merger condition following the carrier’s acquisition of Alltel. The merger is set for a vote Tuesday, though discussions continue at the FCC. The key issue is how long Verizon Wireless extends roaming agreements small carriers primarily have with Alltel after the merger is finalized. Verizon Wireless agreed to a two-year extension to win Department of Justice clearance of the merger.
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Verizon appears willing to offer a four-year extension of roaming agreements to get the merger approved, FCC officials said. FCC Democrats Michael Copps and Jonathan Adelstein want at least five years, and have not formally dropped support for a seven-year extension. Commissioner Deborah Tate is sympathetic to small carrier complaints and believes a two-year extension would not be long enough. The provision likely would offer small carriers protections under sections 201, 202 and 208 of the Communications Act.
Small carrier officials are in the dark, deprived of FCC updates since the merger went onto the Sunshine Act agenda a week ago, they said. “The Dems are on board,” an industry official said. “It is just a matter of where Tate is on this.” Adelstein and Copps would hesitate to endorse the merger without roaming and open access conditions, an FCC official said: “The Democrats have made clear they are no fans of consolidation and those are very important conditions.”
“Conditions on roaming are pretty much a given at this point,” said Jessica Zufolo, Medley Global Advisors analyst. “The question is whether current roaming agreements will be extended beyond the two-year commitment already agreed to by Verizon. Given how long it will take CDMA and GSM competitors to adopt and deploy LTE, we expect there will be some sympathy at the FCC for extending the current roaming agreements beyond three or more years.”
Also unclear Monday was whether the FCC would set open access conditions on the merger, but eliminate universal service stipulations. Dropping the USF provisions makes sense in light of the FCC’s failure to reach an agreement on broader changes to the program, one agency official said.