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Justice Departments Requires Divestitures in ALLTELL’S Acquisition of Midwest Wireless

Doyle, Barlow & Mazard PLLC

On September 7, the DOJ announced that ALLTEL Corporation agreed to divest assets in rural areas of Minnesota in order to proceed with its $1.075 billion acquisition of Midwest Wireless Holdings LLC. The DOJ said that the deal as originally proposed would have resulted in higher prices, lower quality, and diminished investment in network improvements for consumers of mobile wireless telecommunications services in four areas where both ALLTEL and Midwest Wireless currently operate.
The required divestitures preserve competition in rural areas where consumers often have fewer choices for wireless telephone services.

ALLTEL and Midwest Wireless are regional mobile wireless telecommunications service providers and serve many rural markets. Although a combination of these two regional providers gives the merged firm the benefit of having a larger service area footprint, the divestitures are required to assure continued competition in specific markets where ALLTEL and Midwest Wireless are each other's most significant competitors.

Under the terms of the proposed consent decree, the merged firm must divest ALLTEL's mobile wireless telecommunications services business, including cellular spectrum and customers, in four Minnesota areas that are comprised of 28 counties. ALLTEL is not required to divest assets used solely to provide roaming services in these four areas to carriers who use GSM technology; Midwest Wireless does not currently offer this service in these areas and therefore the proposed acquisition will not lessen competition in providing the service.

Andre P. Barlow

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