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Verizon Faces Governmental Intervention

Filed in archive Announcements by Jason Giacchino on June 10, 2008

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It appears the government is taking monopolistic tactics of some wireless companies very seriously of late. The Justice Department says that Verizon Wireless must rid themselves of some cellular assets in the states of New York, Vermontlinks and Washington if they have any shot at earning government approval of its $2.67 billion purchase of Rural Cellular Corp.

The Justice Department filed a civil lawsuit in U.S. District Court for the District of Columbia to actually block the proposed transaction but along with a proposed consent decree that, if approved by the court, would withdraw its competitive concerns (and the lawsuit itself).

The bottom line is that the government is growing concerned with Verizon's takeover of Rural Cellular Corp. (RCC) in terms of the juggernaut's domination of the market place.

The Justice Department said Verizon Wireless and RCC are the most dominant competitors in Vermont's two rural service areas and the Burlington market. The same is true of these two wireless carriers in rural markets in New York and a couple in Washington as well.

According to the complaint, the proposed transaction would substantially reduce competition in these areas, where at present Verizon Wireless and RCC already serve more than 60% of wireless subscribers.


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Permalink: Verizon Faces Governmental Intervention
Tags: verizon  wireless  monopoly  justice  department  fair  trade  Rural  Cellular  Corp.  RCC  competition  mobile   

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