Election Day is having an impact over at the Federal Communications Commission, which is delaying a vote on the controversial $28.1 billion purchase of Alltel Corp. by Verizon Wireless. FCC Chairman Kevin Martin scheduled a vote to approve the deal for 11 a.m., but Democratic commissioners have been holding it up in hopes of garnering additional conditions on the deal. The approval would be the last major OK by the FCC during the Bush administration, which has been a period of massive consolidation.
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At issue in the Election Day squabble is what roaming obligations a Verizon Wireless-Alltel company would have as part of its contracts with smaller rural cellular companies.
Verizon had already offered to accept roaming conditions on the Alltel deal, but many smaller rural cell-phone companies worry that Verizon will change the rate structure after existing agreements expire. Democratic commissioners have been pushing to require those roaming agreements, which require Verizon Wireless to offer rivals the same rates it offers itself, for seven years. Martin had agreed to condition the deal on having those contracts in place for two years.
On Sunday, Verizon Wireless sent a letter to the FCC saying it would agree to keep the roaming rules in place for four years, a period Martin said Monday he agrees with.
But Democratic commissioners, hoping on an Barack Obama victory, want to see conditions in place for seven years. The number of years may seem like small potatoes, but smaller and midsize rural cell-phone companies rely heavily on revenues from roaming.
Who knows, Democratic commissioners might try to delay the vote until they have enough leverage to block the deal outright. Only time will tell. - Ron Orol
Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.
