The industry is currently abuzz with the Verizon/Alltel deal, and it seems that on the financial end, most people are praising the deal. However, as with most transactions of this nature, not everyone is happy. Considering the cheers from Wall Street, you can imagine who the upset parties are. Yep, we’re talking about customers of Alltel, who face the possibility of rate and plan changes in the future, and government oversight officials, who fear this deal brings antitrust implications.
The biggest consumer fear is that the deal will mean the end of My Circles, a popular Alltel plan which allows subscribers to pick one, five , or 10 numbers to call for free.
“My bill would be astronomical without My Circles,” said Steve Cuccia, in Jefferson, Ohio. In addition, he likes Alltel’s “truly unlimited” wireless data plan, which he uses for home Internet access. His plan is to get the best Alltel plan he can find, and hope that Verizon Wireless lets him keep it after the acquisition.
Another concern is that Verizon won’t show the same commitment to rural coverage as Alltel has in the past. While Verizon will benefit from Alltel’s current rural coverage, the possibility of expansion in such regions is likely lower with the acquisition. As expected, the Department of Justice wants to get their hands on the proposed transaction to review it for antitrust issues. House Subcommittee on Telecommunications and the Internet Chair Edward Markey (D-MA) wants to rigorously review the deal in order to ensure consumer protections. My only beef with the deal is that it removes a competitor in an industry working with finite resources and limited entry. It’s not like my friends and I can get in the entrepreneurial spirit and start our own cell phone company. The spectrum just isn’t available to us. The only option is to purchase minutes wholesale from a larger provider, a strategy that isn’t working too well in the U.S. currently.