DOJ REQUIRES DIVESTITURES IN VERIZON’S ACQUISTION OF RCC

On June 10, 2008 the Department of Justice (“DOJ”) along with the State of Vermont entered into a settlement agreement that would allay their concerns that Verizon Communication Corp.’s (“Verizon”) acquisition of Rural Cellular Corp. (“RCC”) for $2.7 billion as proposed is anticompetitive.

To resolve antitrust concerns, the DOJ required Verzion to divest assets in six different geographic locations in Vermont, New York and Washington. Verizon and RCC provide service to approximately 60 percent of the consumers in those areas. 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.
Serving more than 65 million people in 49 states, Verizon is the second largest mobile wireless telecommunications services provider. RCC is the 10th largest providing its service to 790,000 consumers in15 states. Last year, Verizon made $43 billion in revenue while RCC earned $635 million. This transaction is currently under review at the Federal Communications Commission.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com