This is a time of uncertainty for all Alltel subscribers who are being acquired by Verizon. But it's even more so for customers of both companies in those 10 Nebraska counties, because Verizo
RICHARD PIERSOL / Lincoln Journal Star | Posted: Saturday, December 13, 2008 6:00 pm
Boone 5 is an arcane telephone industry reference to a part of Nebraska that becomes special for those who live there and subscribe to Alltel or Verizon Wireless cellular service.
Boone 5 is 10 familiar counties which include the cities of Columbus, Fremont, Albion, Schuyler, Wahoo, David City, Blair and Central City.
And it is one of 100 markets in 22 states where Verizon Wireless must sell some assets to satisfy the U.S. Department of Justice that competition is being served in Verizon’s acquisition of Alltel.
Some people in Boone 5 who are perfectly happy with their cell service could find themselves subscribing to a company they don’t know.
This is a time of uncertainty for all Alltel subscribers who are being acquired by Verizon. But it’s even more so for customers of both companies in those 10 Nebraska counties, because Verizon could sell either the assets it has now or the Alltel assets it acquires.
Assets, said Verizon spokeswoman Robin Nicol, mean licenses, networks, subscribers, towers — all you need to run a wireless phone business.
Verizon could sell the assets separately in the 100 affected markets or all at once, perhaps to another wireless operator, or to a company set up for no reason other than to acquire divested assets.
“The reason we have to do that is the DOJ, which reviews any transaction to preserve competition, has determined if Verizon owned both Alltel and Verizon, competition would not be preserved there,” Nicol said.
So Verizon will have to sell either Verizon assets or Alltel in that market, and Nicol said she doesn’t know which it will be.
A Justice Department spokeswoman who declined to be identified said she had no specific information on how the Boone 5 area qualified for divestiture, other than DOJ’s general guidelines for analyzing the effects of this kind of merger. She referred to the DOJ Web site’s antitrust section.
Verizon Wireless is expected to close in mid-January on its purchase of Alltel, a $5.9 billion deal that also assumes $22.2 billion of Alltel’s debt and will create the nation’s largest cellular company.
All the regulatory hurdles are over. All that’s left is the closing, the transition and the divestiture. Both the state of Nebraska and the Nebraska State Chamber of Commerce filed comments supporting the acquisition.
Alltel customers being acquired by Verizon Wireless won’t hear much from Verizon until the closing, Nicol said. That’s a lot of customers in Nebraska. Neither company discloses numbers, but Alltel is the dominant cell phone company in the state, with Verizon running second. The state has about 1.3 million cell access lines.
“In any situation like this, an acquisition, you have a transition period,” Nicol said. “You don’t cut over on Day One and everything’s done. You need to go through a transition; that will be the case with Alltel. We’re working to try to integrate the companies as quickly as possible.”
It’s not clear yet what that will mean for Alltel subscribers.
“As soon as we close, we will start communicating with Alltel customers,” Nicol said. “We’ll make a public announcement, and customers will receive communications directly as well. But we can’t do anything until we close.”
In a filing with the Securities and Exchange Commission last week, Verizon said it has received commitments from eight financial institutions to provide $17 billion of financing for the Alltel acquisition.
Verizon Wireless is a joint venture between Verizon Communications Inc. of New York and Vodafone Group PLC of Britain.
Alltel, based in Little Rock, Ark., has a wide-ranging wireless network covering mainly the interior of the country. It is the fifth-largest carrier in the U.S.
Reach Richard Piersol at 473-7241 or at dpiersol@journalstar.com.