Fitch: Verizon Wireless/Alltel Deal May Not Be In The Bag.

With the announced acquisition of Alltel Corp. by Verizon Wireless during the second quarter, initial expectations were for the U.S. Department of Justice (DoJ) and the Federal Communications Commission (FCC) to conclude the regulatory approval process by year-end. However, that decision could be pushed into next year due to many factors.

According to ratings service Fitch, while the merger approvals from the FCC and the DoJ likely require certain market divestitures, possible spectrum divestitures and acceptance of other competitive conditions, Verizon Wireless already has committed to divest certain markets following discussions with the DoJ. Other regional wireless carriers, however, have raised some questions.

In a recent report, Fitch says, "A number of regional and rural carriers as well as industry trade groups are requesting that the FCC either reject or condition Verizon Wireless' planned acquisition of Alltel due to concerns that they will face increased competition based on a variety of issues. The proposed merger conditions that these groups are seeking are similar to the requirements that are currently being petitioned in general FCC industry proceedings. These issues include automatic voice and high-speed data roaming with home market exclusion, additional market divestitures, special restrictions on exclusive handset agreements, universal funding restrictions, open access and aggregate market spectrum positions."

Because Verizon Wireless already has met with the DoJ and has agreed to divest 85 markets if need be, Fitch ...