July 6, 2005

The Justice Department said Alltel Corp. must divest wireless assets in Arkansas, Kansas and Nebraska, in order to win government approval of its proposed $6 billion purchase of Western Wireless Corp.

Justice today simultaneously filed a civil suit in federal court here to block the deal and a proposed consent decree agreed to by Alltel that would resolve the department’s antitrust concerns if approved by the court.

Justice said the original transaction would have led to higher prices, lower quality and diminished investment in network upgrades in the three rural states.

.... Advertisement ....

"Today’s action by the department ensures that consumers of mobile wireless telephone services in these markets will obtain the benefits of competition, including lower prices and higher quality," said J. Bruce McDonald, deputy assistant attorney general in the Justice Department's antitrust division.

"The required divestitures will preserve competition in particular for residents of rural areas, who often have fewer choices for wireless telephone services."

Under the terms of the proposed consent decree, Justice said the merged firm must divest Western Wireless’ mobile wireless services business, including spectrum and customers, in nine markets in Nebraska, six markets in Kansas, and one market in Arkansas.

Little Rock, Ark.-based Alltel, however, would not be required to divest Western Wireless assets used solely to provide roaming services in these 16 areas to carriers that use GSM technology.

Alltel does not currently offer this service and therefore the proposed acquisition would not lessen competition in providing the service, said the department.

Source: RCR News