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Unintended consequences

February 3 2009 - 12:36 pm ET | Tracy Ford | RCR Wireless News

-<a href=http://www.rcrwireless.com/section/Columnists?tag=Tracy%20Ford&tagid=3588>Click here for more from Tracy Ford</a>-

Click here for more from Tracy Ford

The messy truth of any merger is that there are casualties. And while President Obama may lament the 8,000 people to be laid off at Sprint Nextel, there probably are going to be people whose jobs are lost as a result of Verizon Wireless’ purchase of Alltel. These onesie-twosie workers who are collateral damage from the merger won’t make the news, but the individuals will be just as devastated.

As a condition of the merger, Verizon Wireless must divest about 2 million subscribers in 105 markets. The entire purpose of this requirement was to promote competition. Until the markets are sold, Verizon Wireless has a management trust operating those markets and the trust will continue to treat those subscribers as Alltel customers.

But for Christy Daniel, it’s no longer business as usual. Daniel sells Alltel services in rural Georgia in one of the markets to be divested. As of Jan. 9, when the merger was completed, she has been stripped of access to her existing customer base. You can read the details in her letter to the editor here. But in 105 markets across rural America, the same story is likely being played out. It would be naïve to think that the incomes of those people won’t be impacted from the merger.

How long will it be before those 105 markets are sold? AT&T Mobility purchased Dobson Communications at the end of 2007. And in December 2008, AT&T Mobility reported it had completed its divestiture requirements. That’s a long time for resellers and for subscribers to remain in limbo.

That process wasn’t smooth either. AT&T Mobility later was forced to pay a $2 million fine (without admitting any wrongdoing) because the feds alleged it improperly accessed confidential customer information and was later able to entice those customers to switch.

The sad truth is even if Verizon Wireless does everything in its power to ensure that those 2 million customers are treated fairly, and I have no reason to believe it wouldn’t, the conditions of the Department of Justice — aimed to promote competition — didn’t do anything to help Christy Daniel and her counterparts in 105 markets.



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