[Federal Register Volume 73, Number 219 (Wednesday, November 12, 2008)]
[Notices]
[Pages 66922-66938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26564]



[[Page 66922]]

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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Verizon Communications Inc.; Proposed Final 
Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Verizon Communications Inc., Civil Action No. 08-
cv-1878 (EGS). On October 30, 2008, the United States filed a Complaint 
alleging that the proposed acquisition by Verizon Communications Inc. 
of the wireless telecommunications services businesses of Alltel 
Corporation would violate Section 7 of the Clayton Act, 15 U.S.C. 18 by 
substantially lessening competition in the provision of mobile wireless 
telecommunications services in 94 cellular market areas (``CMAs''). The 
proposed Final Judgment, filed the same time as the Complaint, requires 
the divestiture of mobile wireless telecommunications services 
businesses for CMAs in the states of Alabama, Arizona, California, 
Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, Minnesota, Montana, 
Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, South 
Carolina, South Dakota, Utah, Virginia, and Wyoming.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 1st Floor, 
Liberty Square Building, 450 5th Street, Washington, DC 20530 (202-514-
2481), on the Department of Justice's Web site (http://www.usdoj.gov/atr) and at the Office of the Clerk of the United States District Court 
for the District of Columbia. Copies of these materials may be obtained 
from the Antitrust Division upon request and payment of the copying fee 
is set by the Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Nancy Goodman, Chief, Telecommunications and Media Enforcement 
Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, 
NW., Suite 8000, Washington, DC 20530 (202-514-5621).

J. Robert Kramer II,
Director of Operations, Antitrust Division.

In the United States District Court for the District of Columbia

United States of America, Department of Justice, Antitrust Division, 
1401 H Street, NW., Suite 8000, Washington, DC 20530;

    State of Alabama, Attorney General, 500 Dexter Avenue, Montgomery, 
Alabama 36130;
    State of California, California Office of the Attorney General, 300 
So. Spring Street, Suite 1702, Los Angeles, California 90013;
    State of Iowa, Iowa Department of Justice, Hoover Office Building-
Second Floor, 1305 East Walnut Street, Des Moines, Iowa 50319;
    State of Kansas, Kansas Office of the Attorney General, Consumer 
Protection/Antitrust, 120 SW 10th Avenue, 2nd Floor, Topeka, Kansas 
66212;
    State of Minnesota, Minnesota Attorney General's Office, 445 
Minnesota Street, Suite 1200, St. Paul, Minnesota 55101;
    State of North Dakota, Antitrust Division, Office of Attorney 
General, 4205 State Street, P.O. Box 1054, Bismarck, North Dakota 
58502-1054;
    and
    State of South Dakota, Office of the Attorney General, 1302 E. 
Highway 14, Suite I, Pierre, South Dakota 57501-8501m
    Plaintiffs,
    v.
    Verizon Communications Inc., 140 West Street, New York, New York 
10007;
    and
    Alltel Corporation, One Allied Drive, Little Rock, Arkansas 72202, 
Defendants.

Civil No. Case: 1:08-cv-01878. Assigned To: Sullivan, Emmet G. Assign. 
Date: 10/30/2008. Description: Antitrust.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, the State of Alabama, by its 
Attorney General Troy King, the State of California, by its Attorney 
General Edmund G. Brown Jr., the State of Iowa, by its Attorney General 
Thomas J. Miller, the State of Kansas, by its Attorney General Steve 
Six, the State of Minnesota, by its Attorney General Lori Swanson, the 
State of North Dakota, by its Attorney General Wayne Stenehjem, and the 
State of South Dakota, by its Attorney General Lawrence E. Long, bring 
this civil action to enjoin the merger of two mobile wireless 
telecommunications services providers, Verizon Communications Inc. 
(``Verizon'') and Alltel Corporation (``Alltel''), and to obtain other 
relief as appropriate. Plaintiffs allege as follows:
    1. Verizon entered into an agreement to acquire Alltel, dated June 
5, 2008, under which the two companies would combine their mobile 
wireless telecommunications services businesses (``Transaction 
Agreement''). Plaintiffs seek to enjoin this transaction because it 
likely will substantially lessen competition to provide mobile wireless 
telecommunications services in 94 geographic markets where Verizon and 
Alltel are among the most significant competitors.
    2. Verizon's mobile wireless telecommunications services network 
covers 263 million people in 49 states and serves in excess of 70 
million subscribers. Alltel provides mobile wireless telecommunications 
services in 35 states and serves approximately 13 million subscribers. 
The combination of Verizon and Alltel likely will substantially lessen 
competition for mobile wireless telecommunications services throughout 
North and South Dakota, and geographic areas in Alabama, Arizona, 
California, Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, 
Minnesota, Montana, Nebraska, Nevada, New Mexico, North Carolina, Ohio, 
South Carolina, Utah, Virginia and Wyoming, where both Verizon and 
Alltel currently operate. As a result of the proposed acquisition, 
residents of these areas will likely face increased prices, diminished 
quality or quantity of services, and less investment in network 
improvements for these services.

I. Jurisdiction and Venue

    3. This Complaint is filed by the United States under Section 15 of 
the Clayton Act, 15 U.S.C. 25, to prevent and restrain defendants from 
violating Section 7 of the Clayton Act, as amended, 15 U.S.C. 18. 
Plaintiffs Alabama, California, Iowa, Kansas, Minnesota, North Dakota, 
South Dakota by and through their respective Attorneys General, bring 
this action in their respective sovereign capacity and as parens 
patriae on behalf of the citizens, general welfare, and economy of 
their respective States under Section 16 of the Clayton Act, 15 U.S.C. 
26, to prevent defendants from violating Section 7 of the Clayton Act, 
15 U.S.C. 18.
    4. Verizon and Alltel are engaged in interstate commerce and in 
activities substantially affecting interstate commerce. The Court has 
jurisdiction over this action pursuant to Sections 15

[[Page 66923]]

and 16 of the Clayton Act, 15 U.S.C. 25 and 26, and 28 U.S.C. 1331 and 
1337.
    5. The defendants have consented to personal jurisdiction and venue 
in this judicial district.

II. The Defendants and the Transaction

    6. Verizon, with headquarters in New York, is a corporation 
organized and existing under the laws of the State of Delaware. Verizon 
is one of the world's largest providers of communications services. 
Verizon is the second largest mobile wireless telecommunications 
services provider in the United States as measured by subscribers, 
provides mobile wireless telecommunications services in 49 states, and 
serves in excess of 70 million subscribers. In 2007, Verizon earned 
mobile wireless telecommunications services revenues of approximately 
$43 billion.
    7. Alltel, a subsidiary of Atlantis Holdings LLC, is a corporation 
organized and existing under the laws of the State of Delaware, with 
headquarters in Little Rock, Arkansas. Alltel is the fifth largest 
mobile wireless telecommunications services provider in the United 
States as measured by subscribers, and provides mobile wireless 
telecommunications services in 13 states. Alltel has approximately 13 
million subscribers and in 2007, it earned approximately $8.8 billion 
in revenues.
    8. Pursuant to the Transaction Agreement, Verizon will acquire 
Alltel for approximately $28 billion. If this transaction is 
consummated, Verizon and Alltel combined would have approximately 83 
million subscribers in the United States, with over $51 billion in 
mobile wireless telecommunications services revenues.

III. Trade and Commerce

A. Nature of Trade and Commerce

    9. Mobile wireless telecommunications services allow customers to 
make and receive telephone calls and obtain data services using radio 
transmissions without being confined to a small area during the call or 
data session, and without the need for unobstructed line-of-sight to 
the radio tower. Mobility is highly valued by customers, as 
demonstrated by the more than 262 million people in the United States 
who own mobile wireless telephones. In 2007, revenues from the sale of 
mobile wireless telecommunications services in the United States were 
over $138 billion. To meet this desire for mobility, mobile wireless 
telecommunications services providers must deploy extensive networks of 
switches, radio transmitters, and receivers and interconnect their 
networks with the networks of wireline carriers and other mobile 
wireless telecommunications services providers.
    10. In the early to mid-1980s, the FCC issued two cellular licenses 
(A-block and B-block) in each Metropolitan Statistical Area (``MSA'') 
and Rural Service Area (``RSA'') (collectively, ``Cellular Market 
Areas'' or ``CMAs''), for a total of 734 CMAs covering the entire 
United States. Each license consists of 25 MHz of spectrum in the 800 
MHz band. The first mobile wireless voice systems using this cellular 
spectrum were based on analog technology, now referred to as first-
generation or ``IG'' technology.
    11. In 1995, the FCC licensed additional spectrum for the provision 
of Personal Communications Services (``PCS''), a category of services 
that includes mobile wireless telecommunications services comparable to 
those offered by cellular licensees. These licenses are in the 1900 MHz 
band and are divided into six blocks: A, B, and C, which consist of 30 
MHz each; and D, F, and F, which consist of 10 MHz each. 
Geographically, the A- and B-block 30 MHz licenses are issued by Major 
Trading Areas (``MTAs''). C-, D-, E-, and F-block licenses are issued 
by Basic Trading Areas (``BTAs''), several of which comprise each MTA. 
MTAs and BTAs do not generally correspond to MSAs and RSAs.
    12. With the introduction of the PCS licenses, both cellular and 
PCS licensees began offering digital services, thereby increasing 
network capacity, shrinking the size of handsets, and extending handset 
battery life, in addition, in 1996, a specialized mobile radio (``SMR'' 
or ``dispatch'') spectrum licensee began using SMR spectrum to offer 
mobile wireless telecommunications services comparable to those offered 
by other mobile wireless telecommunications services providers, in 
conjunction with its dispatch, or ``push-to-talk,'' service. Although 
there are a number of providers holding spectrum licenses in each area 
of the country, not all providers have fully built out their networks 
throughout each license area. In particular, because of the 
characteristics of PCS spectrum, providers holding this type of 
spectrum generally have found it less attractive to build out in rural 
areas.
    13. Today, more than 95 percent of the total U.S. population lives 
in counties where three or more mobile wireless telecommunications 
services operators offer service. Nearly all mobile wireless voice 
services have migrated to the second-generation, or ``2G'' digital 
technologies, using 3SM (global standard for mobility) or CDMA (code 
division multiple access). Even more advanced technologies (``2.5G'' 
and ``3G''), based on the earlier 2G technologies, have been deployed 
for mobile wireless data services.

B. Relevant Product Market

    14. Mobile wireless telecommunications services is a relevant 
product market. Mobile wireless telecommunications services include 
both voice and data services provided over a radio network and allow 
customers to maintain their telephone calls or data sessions without 
wires when traveling. There are no cost-effective alternatives to 
mobile wireless telecommunications services. Because fixed wireless 
services are not mobile, they are not regarded by consumers of mobile 
wireless telecommunications services to be a reasonable substitute for 
those services. It is unlikely that a sufficient number of customers 
would switch away from mobile wireless telecommunications services to 
make a small but significant price increase in those services 
unprofitable. Mobile wireless telecommunications services accordingly 
is a relevant product market under Section 7 of the Clayton Act, 15 
U.S.C. 18.

C. Relevant Geographic Markets

    15. The United States comprises numerous local geographic markets 
for mobile wireless telecommunications services. A large majority of 
customers use mobile wireless telecommunications services in close 
proximity to their workplaces and homes. Thus, customers purchasing 
mobile wireless telecommunications services choose among mobile 
wireless telecommunications services providers that offer services 
where they live, work, and travel on a regular basis. The geographic 
areas in which the FCC has licensed mobile wireless telecommunications 
services providers often represent the core of the business and social 
sphere within which customers have the same competitive choices for 
mobile wireless telephone services. The number and identity of mobile 
wireless telecommunications services providers varies among geographic 
areas, as does the quality of services and breadth of geographic 
coverage offered by providers. Some mobile wireless telecommunications 
services providers can and do offer different promotions, discounts, 
calling plans, and equipment subsidies in different geographic areas, 
varying the price for customers by geographic area.

[[Page 66924]]

    16. The relevant geographic markets, under Section 7 of the Clayton 
Act, 15 U.S.C. 18, where the transaction would substantially lessen 
competition for mobile wireless telecommunications services are 
effectively represented by the 94 FCC spectrum licensing areas 
specified in Appendix A. It is unlikely that a sufficient number of 
customers would switch to mobile wireless telecommunications services 
providers who do not offer services in these geographic areas to make a 
small but significant price increase in the relevant geographic markets 
unprofitable.

D. Anticompetitive Effects

1. Mobile Wireless Telecommunications Services
    17. In each of the cellular license areas described in Appendix A, 
Verizon and Alltel are significant providers of mobile wireless 
telecommunications services (based on subscribers), and together their 
combined share in each area ranges from over 55% to 100%. In addition, 
each is the other's closest competitor for a significant set of 
customers.
    18. The relevant geographic markets for mobile wireless services 
are highly concentrated. As measured by the Herfindahl-Hirschman Index 
(``HHI''), which is commonly employed in merger analysis and is defined 
and explained in Appendix B to this Complaint, concentration in these 
geographic areas ranges from over 2100 to more than 9100, which is well 
above the 1800 threshold at which plaintiffs consider a market to be 
highly concentrated. After Verizon's proposed acquisition of Alltel is 
consummated, the HHIs in the relevant geographic areas will range from 
over 4000 to 10,000, with increases in the HHI as a result of the 
merger ranging from over 300 to over 4900, significantly beyond the 
thresholds at which plaintiffs consider a transaction likely to cause 
competitive harm.
    19. Competition between Verizon and Alltel in the relevant 
geographic markets has resulted in lower prices and higher quality in 
mobile wireless telecommunications services than otherwise would have 
existed in these geographic markets. In these areas, consumers consider 
Verizon and Alltel to be particularly attractive competitors because 
other providers' networks often lack coverage or provide lower-quality 
service, in all but two of these CMAs, Verizon and Alltel each hold 
cellular spectrum licenses. If Verizon's proposed acquisition of Alltel 
is consummated, competition between Verizon and Alltel in mobile 
wireless telecommunications services will be eliminated in these 
markets and the relevant markets for mobile wireless telecommunications 
services will become substantially more concentrated. As a result, the 
loss of competition between Verizon and Alltel increases the merged 
firm's incentive and ability in the relevant geographic markets to 
increase prices, diminish the quality or quantity of services provided, 
and refrain from or delay making investments in network improvements.
2. Entry
    20. Entry by a new mobile wireless services provider in the 
relevant geographic markets would be difficult, time-consuming, and 
expensive, requiring spectrum licenses and the build out of a network. 
Therefore, any entry in response to a small but significant price 
increase for mobile wireless telecommunications services by the merged 
firm in the relevant geographic markets would not be timely, likely, or 
sufficient to thwart the competitive harm resulting from Verizon's 
proposed acquisition of Alltel, if it were consummated.

IV. Violation Alleged

    21. The effect of Verizon's proposed acquisition of Alltel, if it 
were to be consummated, may be substantially to lessen competition in 
interstate trade and commerce in the relevant geographic markets for 
mobile wireless telecommunications services, in violation of Section 7 
of the Clayton Act, 15 U.S.C. 18.
    22. Unless restrained, the transaction will likely have the 
following effects in mobile wireless telecommunications services in the 
relevant geographic markets, among others:
    a. Actual and potential competition between Verizon and Alltel will 
be eliminated;
    b. Competition in general will be lessened substantially;
    c. Prices are likely to increase;
    d. The quality and quantity of services are likely to decrease; and
    e. Incentives to improve wireless networks will be reduced.

V. Requested Relief

    The plaintiffs request:
    23. That Verizon's proposed acquisition of Alltel be adjudged to 
violate Section 7 of the Clayton Act, 15 U.S.C. 18;
    24. That defendants be permanently enjoined from and restrained 
from carrying out the Agreement and Plan of Merger dated June 5, 2008, 
or from entering into or carrying out any agreement, understanding, or 
plan, the effect of which would be to bring the wireless services 
businesses of Verizon and Alltel under common ownership or control;
    25. That plaintiffs be awarded their costs of this action; and
    26. That plaintiffs have such other relief as the Court may deem 
just and proper.

Dated: October 30, 2008
Respectfully Submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA:

Thomas O. Barnett
Assistant Attorney General
Antitrust Division

Nancy Goodman
Chief, Telecommunications & Media
Enforcement Section
Antitrust Division

Deborah A. Garza
Deputy Assistant Attorney General
Antitrust Division

Laury Bobbish
Assistant Chief, Telecommunications & Media Enforcement Section
Antitrust Division

J. Robert Kramer II
Deputy Director of Operations
Antitrust Division
Hillary B. Burchuk (DC Bar No. 366755)
Lauren Fishbein (DC Bar No. 451889)
Lawrence M. Frankel (DC Bar No. 441532)
Peter Gray
Jared A. Hughes
Justin Hurwitz
Lorenzo McRae (DC Bar No. 473660)

Attorneys, Telecommunications & Media Enforcement Section
Antitrust Division
U.S. Department of Justice
City Center Building
1401 H Street, N.W., Suite 8000
Washington, D.C. 20530
Phone: (202) 514-5621
Facsimile: (202) 514-6381

FOR PLAINTIFF STATE OF ALABAMA

STATE OF ALABAMA

TROY KING
Attorney General
State of Alabama
500 Dexter Avenue
Montgomery, Alabama 36130
(334) 242-7300
(334) 242-2433

FOR PLAINTIFF STATE OF CALIFORNIA:
EDMUND O. BROWN JR.,
Attorney General of the State of California

KATHLEEN FOOTE,
Sr. Assistant Attorney General

BARBARA M. MOTZ,
Supervising Deputy Attorney General

PAULA LAUREN GIBSON,
State Bar No. 100780
Deputy Attorney General
California Office of the Attorney General
300 So. Spring Street, Suite 1702
Los Angeles, CA 90013
Telephone: (213) 897-0014
Facsimile: (213) 897-2801

FOR PLAINTIFF STATE OF IOWA:

STATE OF IOWA
THOMAS J. MILLER

[[Page 66925]]

Attorney General

LAYNE M. LINDEBAK
Assistant Attorney General
Special Litigation Division
Iowa Department of Justice
Hoover Office Building--Second Floor
1305 East Walnut Street
Des Moines, Iowa 50319
Phone: (515) 281-7054
Facsimile: (515) 281-4902

FOR PLAINTIFF STATE OF KANSAS:

STEVE SIX

Attorney General of Kansas

LYNETTE R. BAKKER
Assistant Attorney General
Kansas Office of the Attorney General
Consumer Protection/Antitrust
120 SW 10th Avenue, 2nd Floor
Topeka, KS 66212
Phone: (785) 368-8451
Facsimile: (785) 291-3699

FOR PLAINTIFF STATE OF MINNESOTA:

LORI SWANSON
Attorney General
State of Minnesota

KRISTEN M. OLSEN
Assistant Attorney General
Atty. Reg. No. 30489X
445 Minnesota Street, Suite 1200
St. Paul, Minnesota 55101-2130
Phone: (651) 296-2921
Facsimile: (651) 282-5437

FOR PLAINTIFF STATE OF NORTH DAKOTA:

WAYNE STENEHJEM
Attorney General

Parrell D. Grossman
Assistant Attorney General
ND Bar ID No. 04684
Director, Consumer Protection & Antitrust Div.
Office of Attorney General
4205 State Street
PO Box 1054
Bismarck, ND 58502-1054
Phone: (701) 328-5570
Facsimile: (701) 328-5568

FOR PLAINTIFF STATE OF SOUTH DAKOTA

LAWRENCE E. LONG
Attorney General
State of South Dakota

JEFFREY P. HAHEM
Assistant Attorney General
State of South Dakota
1302 E. Highway 14, Suite I
Pierre, SD 57501-8501
Phone: (605) 773-3215
Facsimile: (605) 773-4106

Appendix A

    (1) Lima OH MSA (CMA 158);
    (2) Hickory NC MSA (CMA 166);
    (3) Fargo-Moorhead ND-MN MSA (CMA 221);
    (4) Mansfield OH MSA (CMA 231);
    (5) Dothan AL MSA (CMA 246);
    (6) Sioux City IA-NE MSA (CMA 253);
    (7) Albany GA MSA (CMA 261);
    (8) Danville VA MSA (CMA 262);
    (9) Sioux Falls SD MSA (CMA 267);
    (10) Billings MT MSA (CMA 268);
    (11) Grand Forks ND-MN MSA (CMA 276);
    (12) Rapid City SD MSA (CMA 289);
    (13) Great Falls MT MSA (CMA 297);
    (14) Bismarck ND MSA (CMA 298);
    (15) Casper WY MSA (CMA 299);
    (16) AL RSA 7 (CMA 313);
    (17) AZ RSA 5 (CMA 322);
    (18) CA RSA 6 (CMA 341);
    (19) CO RSA 4 (CMA 351);
    (20) CO RSA 5 (CMA 352);
    (21) CO RSA 6 (CMA 353);
    (22) CO RSA 7 (CMA 354);
    (23) CO RSA 8 (CMA 355);
    (24) CO RSA 9 (CMA 356);
    (25) GA RSA 6 (CMA 376);
    (26) GA RSA 7 (CMA 377);
    (27) GA RSA 8 (CMA 378);
    (28) GA RSA 9 (CMA 379);
    (29) GA RSA 10 (CMA 380);
    (30) GA RSA 12 (CMA 382);
    (31) GA RSA 13 (CMA 383);
    (32) ID RSA 2 (CMA 389);
    (33) ID RSA 3 (CMA 390);
    (34) IL RSA 8 (CMA 401);
    (35) IL RSA 9 (CMA 402);
    (36) IA RSA 8 (CMA 419);
    (37) KS RSA 1 (CMA 428);
    (38) KS RSA 2 (CMA 429);
    (39) KS RSA 6 (CMA 433);
    (40) KS RSA 7 (CMA 434);
    (41) KS RSA 11 (CMA 438);
    (42) KS RSA 12 (CMA 439);
    (43) KS RSA 13 (CMA 440);
    (44) MN RSA 1 (CMA 482);
    (45) MN RSA 2 (CMA 483);
    (46) MN RSA 7 (CMA 488);
    (47) MT RSA 1 (CMA 523);
    (48) MT RSA 2 (CMA 524);
    (49) MT RSA 4 (CMA 526);
    (50) MT RSA 5 (CMA 527);
    (51) MT RSA 6 (CMA 528);
    (52) MT RSA 7 (CMA 529);
    (53) MT RSA 8 (CMA 530);
    (54) MT RSA 9 (CMA 531);
    (55) MT RSA 10 (CMA 532);
    (56) NE RSA 5 (CMA 537);
    (57) NV RSA 2 (CMA 544);
    (58) NV RSA 5 (CMA 547);
    (59) NM RSA 1 (CMA 553);
    (60) NM RSA 5 (CMA 557);
    (61) NM RSA 6 (CMA 558);
    (62) NC RSA 2 (CMA 566);
    (63) NC RSA 5 (CMA 569);
    (64) NT RSA 1 (CMA 580);
    (65) ND RSA 2 (CMA 581);
    (66) ND RSA 3 (CMA 582);
    (67) ND RSA 4 (CMA 583);
    (68) ND RSA 5 (CMA 584);
    (69) OH RSA 2 (CMA 586);
    (70) OH RSA 5 (CMA 589);
    (71) OH RSA 6 (CMA 590);
    (72) SC RSA 1 (CMA 625);
    (73) SC RSA 2 (CMA 626);
    (74) SC RSA 3 (CMA 627);
    (75) SC RSA 7 (CMA 631);
    (76) SD RSA 1 (CMA 634);
    (77) SD RSA 2 (CMA 635);
    (78) SD RSA 3 (CMA 636);
    (79) SD RSA 4 (CMA 637);
    (80) SD RSA 5 (CMA 638);
    (81) SD RSA 6 (CMA 639);
    (82) SD RSA 7 (CMA 640);
    (83) SD RSA 8 (CMA 641);
    (84) SD RSA 9 (CMA 642);
    (85) UT RSA 3 (CMA 675);
    (86) UT RSA 4 (CMA 676);
    (87) UT RSA 5 (CMA 677);
    (88) UT RSA 6 (CMA 678);
    (89) VA RSA 1 (CMA 681);
    (90) VA RSA 8 (CMA 688);
    (91) WY RSA 1 (CMA 718);
    (92) WY RSA 2 (CMA 719);
    (93) WY RSA 4 (CMA 721);
    (94) WY RSA 5 (CMA 722).

Appendix B

Herfindahl-Hirschman Index

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted 
measure of market concentration. It is calculated by squaring the 
market share of each firm competing in the market and then summing the 
resulting numbers. For example, for a market consisting of four firms 
with shares of 30, 30, 20, and 20 percent, the HHI is 2600 (30\2\ + 
30\2\ + 20\2\ + 20\2\ = 2600). (Note: Throughout the Complaint, market 
share percentages have been rounded to the nearest whole number, but 
HHIs have been estimated using unrounded percentages in order to 
accurately reflect the concentration of the various markets.) The HHI 
takes into account the relative size distribution of the firms in a 
market and approaches zero when a market consists of a large number of 
small firms. The HHI increases both as the number of firms in the 
market decreases and as the disparity in size between those firms 
increases.
    Markets in which the HHI is between 1000 and 1800 points are 
considered to be moderately concentrated, and those in which the HHI is 
in excess of 1800 points are considered to be highly concentrated. See 
Horizontal Merger Guidelines ] 1.51 (revised Apr. 8, 1997). 
Transactions that increase the HHI by more than 100 points in 
concentrated markets presumptively raise antitrust concerns under the 
guidelines issued by the U.S. Department of Justice and Federal Trade 
Commission. See id.

In the United States District Court for the District of Columbia United 
States of America, State of Alabama, State of California, State of 
Iowa, State of Kansas, State of Minnesota, State of North Dakota, and 
State of South Dakota:

Plaintiffs,


[[Page 66926]]


v.

Verizon Communications Inc., and Alltel Corporation,

Defendants.

Civil No.: 08 1878.

Final Judgment

    Whereas, plaintiffs, United States of America, State of Alabama, 
State of California, State of Iowa, State of Kansas, State of 
Minnesota, State of North Dakota, and State of South Dakota, filed 
their Complaint on October, 2008, plaintiffs and defendants, Verizon 
Communications Inc. (``Verizon'') and Alltel Corporation (``Alltel''), 
by their respective attorneys, have consented to the entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law, and without this Final Judgment constituting any evidence against 
or admission by any party regarding any issue of fact or law;
    And whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by defendants to assure 
that competition is not substantially lessened;
    And whereas, plaintiffs require defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, defendants have represented to plaintiffs that the 
divestitures required below can and will be made and that defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest the Divestiture Assets.
    B. ``Alltel'' means Alltel Corporation, a subsidiary of Atlantis 
Holdings LLC, a corporation organized and existing under the laws of 
the State of Delaware, with headquarters in Little Rock, Arkansas, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``CMA'' means cellular market area which is used by the Federal 
Communications Commission (``FCC'') to define cellular license areas 
and which consists of Metropolitan Statistical Areas (``MSAs'') and 
Rural Service Areas (``RSAs'').
    D. ``Divestiture Assets'' means each mobile wireless 
telecommunications services business to be divested under this Final 
Judgment, including all types of assets, tangible and intangible, used 
by defendants in the operation of the mobile wireless 
telecommunications services businesses to be divested. To ensure that 
the divested mobile wireless telecommunications services businesses 
remain viable, ongoing businesses, the term ``Divestiture Assets'' 
shall be construed broadly to accomplish the complete divestiture, as 
required by this Final Judgment, of the entire business of
    (1) Alltel in each of the following CMA license areas:
    (a) Lima OH MSA (CMA 158);
    (b) Hickory NC MSA (CMA 166);
    (c) Fargo-Moorhead ND-MN MSA (CMA 221);
    (d) Mansfield OH MSA (CMA 231);
    (e) Dothan AL MSA (CMA 246);
    (f) Sioux City IA-NE MSA (CMA 253);
    (g) Albany GA MSA (CMA 261);
    (h) Danville VA MSA (CMA 262);
    (i) Sioux Falls SD MSA (CMA 267);
    (j) Billings MT MSA (CMA 268);
    (k) Grand Forks ND-MN MSA (CMA 276);
    (l) Rapid City SD MSA (CMA 289);
    (m) Great Falls MT MSA (CMA 297);
    (n) Bismarck ND MSA (CMA 298);
    (o) Casper WY MSA (CMA 299);
    (p) AL RSA 7 (CMA 313);
    (q) AZ RSA 5 (CMA 322);
    (r) CA RSA 6 (CMA 341);
    (s) CO RSA 4 (CMA 351);
    (t) CO RSA 5 (CMA 352);
    (u) CO RSA 6 (CMA 353);
    (v) CO RSA 7 (CMA 354);
    (w) CO RSA 8 (CMA 355);
    (x) CO RSA 9 (CMA 356);
    (y) GA RSA 6 (CMA 376);
    (z) GA RSA 7 (CMA 377);
    (aa) GA RSA 8 (CMA 378);
    (bb) GA RSA 9 (CMA 379);
    (cc) GA RSA 10 (CMA 380);
    (dd) GA RSA 12 (CMA 382);
    (ee) GA RSA 13 (CMA 383);
    (ff) ID RSA 2 (CMA 389);
    (gg) ID RSA 3 (CMA 390);
    (hh) IL RSA 8 (CMA 401);
    (ii) IL RSA 9 (CMA 402);
    (jj) IA RSA 8 (CMA 419);
    (kk) MN RSA 1 (CMA 482);
    (ll) MN RSA 2 (CMA 483);
    (mm) MT RSA 1 (CMA 523);
    (nn) MT RSA 2 (CMA 524);
    (oo) MT RSA 4 (CMA 526);
    (pp) MT RSA 5 (CMA 527);
    (qq) MT RSA 6 (CMA 528);
    (rr) MT RSA 7 (CMA 529);
    (ss) MT RSA 8 (CMA 530);
    (tt) MT RSA 9 (CMA 531);
    (uu) MT RSA 10 (CMA 532);
    (vv) NV RSA 2 (CMA 544);
    (ww) NV RSA 5 (CMA 547);
    (xx) NM RSA 1 (CMA 553);
    (yy) NM RSA 5 (CMA 557);
    (zz) NM RSA 6 (CMA 558);
    (aaa) NC RSA 2 (CMA 566);
    (bbb) NC RSA 5 (CMA 569);
    (ccc) ND RSA 1 (CMA 580);
    (ddd) ND RSA 2 (CMA 581);
    (eee) ND RSA 3 (CMA 582);
    (fff) ND RSA 4 (CMA 583);
    (ggg) ND RSA 5 (CMA 584);
    (hhh) OH RSA 2 (CMA 586);
    (iii) OH RSA 5 (CMA 589);
    (jjj) OH RSA 6 (CMA 590);
    (kkk) SC RSA 1 (CMA 625);
    (lll) SC RSA 2 (CMA 626);
    (mmm) SC RSA 3 (CMA 627);
    (nnn) SC RSA 7 (CMA 631);
    (ooo) SD RSA 1 (CMA 634);
    (ppp) SD RSA 2 (CMA 635);
    (qqq) SD RSA 3 (CMA 636);
    (rrr) SD RSA 4 (CMA 637);
    (sss) SD RSA 5 (CMA 638);
    (ttt) SD RSA 6 (CMA 639);
    (uuu) SD RSA 7 (CMA 640);
    (vvv) SD RSA 8 (CMA 641);
    (www) SD RSA 9 (CMA 642);
    (xxx) UT RSA 3 (CMA 675);
    (yyy) UT RSA 4 (CMA 676);
    (zzz) UT RSA 5 (CMA 677);
    (aaaa) UT RSA 6 (CMA 678);
    (bbbb) VA RSA 1 (CMA 681);
    (cccc) VA RSA 8 (CMA 688);
    (dddd) WY RSA 1 (CMA 718);
    (eeee) WY RSA 2 (CMA 719);
    (ffff) WY RSA 4 (CMA 721);
    (gggg) WY RSA 5 (CMA 722).
    (2) Verizon, that was acquired from Rural Cellular Corporation in 
August 2008, in each of the following CMA license areas:
    (a) KS RSA 1 (CMA 428);
    (b) KS RSA 2 (CMA 429);
    (c) KS RSA 6 (CMA 433);
    (d) KS RSA 7 (CMA 434);
    (e) KS RSA 11 (CMA 438);
    (f) KS RSA 12 (CMA 439);
    (g) KS RSA 13 (CMA 440); and
    (3) Verizon (but not including any assets acquired from Rural 
Cellular Corporation) in each of the following CMA license areas:
    (a) MN RSA 7 (CMA 488); and
    (b) NE RSA 5 (CMA 537).
    The Divestiture Assets shall include, without limitation, all types 
of real and personal property, monies and financial instruments, 
equipment, inventory,

[[Page 66927]]

office furniture, fixed assets and furnishings, supplies and materials, 
contracts, agreements, leases, commitments, spectrum licenses issued by 
the FCC and all other licenses, permits and authorizations, operational 
support systems, cell sites, network infrastructure, switches, customer 
support and billing systems, interfaces with other service providers, 
business and customer records and information, customer contracts, 
customer lists, credit records, accounts, and historic and current 
business plans that relate primarily to the wireless businesses being 
divested, as well as any patents, licenses, sublicenses, trade secrets, 
know-how, drawings, blueprints, designs, technical and quality 
specifications and protocols, quality assurance and control procedures, 
manuals and other technical information defendants supply to their own 
employees, customers, suppliers, agents, or licensees, and trademarks, 
trade names and service marks or other intellectual property, including 
all intellectual property rights under third-party licenses that are 
capable of being transferred to the Acquirer(s) either in their 
entirety, for assets described in (a) below, or through a license 
obtained through or from defendants, for assets described in (b) below; 
provided that defendants shall only be required to divest Multi-line 
Business Customer contracts if the primary business address for that 
customer is located within any of the license areas described herein, 
and further, any subscriber who obtains mobile wireless 
telecommunications services through any such contract retained by 
defendants and who are located within the license areas identified 
above, shall be given the option to terminate their relationship with 
defendants, without financial cost, at any time within one year of the 
closing of the Transaction. Defendants shall provide written notice to 
these subscribers within 45 days after the closing of the Transaction 
of the option to terminate.
    The divestiture of the Divestiture Assets shall be accomplished by:
    (a) transferring to the Acquirer(s) the complete ownership and/or 
other rights to the assets (other than those assets used substantially 
in the operations of defendants' overall wireless telecommunications 
services business that must be retained to continue the existing 
operations of the wireless properties that defendants are not required 
to divest, and that either are not capable of being divided between the 
divested wireless telecommunications services businesses and those not 
divested, or are assets that the defendants and the Acquirer(s) agree, 
subject to the approval of plaintiff United States, shall not be 
divided); and
    (b) granting to the Acquirer(s) an option to obtain a nonexclusive, 
transferable license from defendants for a reasonable period, subject 
to the approval of plaintiff United States, and at the election of the 
Acquirer(s), to use any of defendants' retained assets under paragraph 
(a) above used in operating the mobile wireless telecommunications 
services businesses being divested, so as to enable the Acquirer(s) to 
continue to operate the divested mobile wireless telecommunications 
services businesses without impairment. Defendants shall identify in a 
schedule submitted to plaintiff United States and filed with the Court 
as expeditiously as possible following the filing of the Complaint, and 
in any event prior to any divestiture and before the approval by the 
Court of this Final Judgment, any and all intellectual property rights 
under third-party licenses that are used by the mobile wireless 
telecommunications services businesses being divested that defendants 
could not transfer to the Acquirer(s) entirely or by license without 
third-party consent, the specific reasons why such consent is 
necessary, and how such consent would be obtained for each asset.
    E. ``Multi-line Business Customer'' means a corporate or business 
customer that contracts with a divesting defendant for mobile wireless 
telecommunications services to provide multiple telephones to its 
employees or members whose services are provided pursuant to a contract 
with the corporate or business customer.
    F. ``Transaction'' means the Agreement and Plan of Merger among 
Ceilco Partnership, Airtouch Cellular, Abraham Merger Corporation, 
Alltel Corporation and Atlantis Holdings LLC, dated June 5, 2008.
    G. ``Verizon'' means defendant Verizon Communications Inc., a 
Delaware corporation, with its headquarters in New York, New York, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.

III. Applicability

    A. This Final Judgment applies to defendants Verizon and Alltel, as 
defined above, and all other persons in active concert or participation 
with any of them who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. If, prior to complying with Section IV and V of this Final 
Judgment, defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the 
Divestiture Assets, they shall require the purchaser to be bound by the 
provisions of this Final Judgment. Defendants need not obtain such an 
agreement from the acquirer(s) of the assets divested pursuant to this 
Final Judgment.

IV. Divestitures

    A. Defendants are ordered and directed, within 120 days after 
consummation of the Transaction, or five calendar days after notice of 
the entry of this Final Judgment by the Court, whichever is later, to 
divest the Divestiture Assets in a manner consistent with this Final 
Judgment to an Acquirer or Acquirers acceptable to plaintiff United 
States in its sole discretion, upon consultation with the relevant 
plaintiff State, or, if applicable, to a Divestiture Trustee designated 
pursuant to Section V of this Final Judgment. Plaintiff United States, 
in its sole discretion, upon consultation with the relevant plaintiff 
State, may agree to one or more extensions of this time period not to 
exceed 60 calendar days in total, and shall notify the Court in such 
circumstances. With respect to divestiture of the Divestiture Assets by 
defendants or the Divestiture Trustee, if applications have been filed 
or are on file with the FCC within the period permitted for divestiture 
seeking approval to assign or transfer licenses to the Acquirer(s) of 
the Divestiture Assets, but an order or other dispositive action by the 
FCC on such applications has not been issued before the end of the 
period permitted for divestiture, the period shall be extended with 
respect to divestiture of those Divestiture Assets for which FCC 
approval has not been issued until five days after such approval is 
received. Defendants agree to use their best efforts to accomplish the 
divestitures set forth in this Final Judgment and to seek all necessary 
regulatory approvals as expeditiously as possible. This Final Judgment 
does not limit the FCC's exercise of its regulatory powers and process 
with respect to the Divestiture Assets. Authorization by the FCC to 
conduct the divestiture of a Divestiture Asset in a particular manner 
will not modify any of the requirements of this decree.
    B. In accomplishing the divestitures ordered by this Final 
Judgment, defendants shall promptly make known, if they have not 
already done so, by usual and customary means, the availability of the 
Divestiture Assets. Defendants shall inform any person making inquiry 
regarding a possible purchase of the Divestiture Assets that

[[Page 66928]]

they are being divested pursuant to this Final Judgment and provide 
that person with a copy of this Final Judgment. Defendants shall offer 
to furnish to all prospective Acquirers, subject to customary 
confidentiality assurances, all information and documents relating to 
the Divestiture Assets customarily provided in a due diligence process 
except such information or documents subject to the attorney-client or 
work product privileges. Defendants shall make available such 
information to plaintiffs at the same time that such information is 
made available to any other person.
    C. Defendants shall provide the Acquirer(s) and plaintiffs 
information relating to the personnel involved in the operation, 
development, and sale or license of the Divestiture Assets to enable 
the Acquirer(s) to make offers of employment. Defendants will not 
interfere with any negotiations by the Acquirer(s) to employ any 
defendant employee whose primary responsibility is the operation, 
development, or sale or license of the Divestiture Assets.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the Divestiture Assets; access to any and all environmental, zoning, 
and other permit documents and information; and access to any and all 
financial, operational, and other documents and information customarily 
provided as part of a due diligence process.
    E. Defendants shall warrant to the Acquirer(s) that (1) the 
Divestiture Assets will be operational on the date of sale, and (2) 
every wireless spectrum license is in full force and effect on the date 
of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, licensing, operation, or divestiture of the Divestiture 
Assets.
    G. Defendants shall warrant to the Acquirer(s) of the Divestiture 
Assets that there are no material defects in the environmental, zoning, 
licensing or other permits pertaining to the operation of each asset 
and that following the sale of the Divestiture Assets, defendants will 
not undertake, directly or indirectly, any challenges to the 
environmental, zoning, licensing or other permits relating to the 
operation of the Divestiture Assets.
    H. Unless plaintiff United States, in its sole discretion upon 
consultation with the relevant plaintiff State, otherwise consents in 
writing, the divestitures pursuant to Section IV, or by a Divestiture 
Trustee appointed pursuant to Section V, of this Final Judgment, shall 
include the entire Divestiture Assets, and shall be accomplished in 
such a way as to satisfy plaintiff United States in its sole discretion 
that these assets can and will be used by the Acquirer(s) as part of a 
viable, ongoing business engaged in the provision of mobile wireless 
telecommunications services. The divestiture of the Divestiture Assets, 
whether pursuant to Section IV or Section V of this Final Judgment:
    (1) shall be made to an Acquirer or Acquirers that, in plaintiff 
United States's sole judgment, upon consultation with the relevant 
plaintiff State, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the provision of mobile wireless 
telecommunications services; and
    (2) shall be accomplished so as to satisfy plaintiff United States 
in its sole discretion, upon consultation with the relevant plaintiff 
State, that none of the terms of any agreement between an Acquirer(s) 
and defendants shall give defendants the ability unreasonably to raise 
the Acquirer's costs, to lower the Acquirer's efficiency, or otherwise 
to interfere with the ability of the Acquirer to compete effectively.
    I. The Divestiture Assets listed in each numbered subsection below 
shall be divested together to a single Acquirer, provided that it is 
demonstrated to the sole satisfaction of plaintiff United States, upon 
consultation with the relevant plaintiff State, that the Divestiture 
Assets will remain viable and the divestiture of such assets will 
remedy the competitive harm alleged in the Complaint:
    (1) Alabama
    (a) Dothan MSA (CMA 246);
    (b) ALRSA7 (CMA 313);

    (2) Colorado
    (a) CO RSA 4 (CMA 351);
    (b) CO RSA 5 (CMA 352);
    (c) CO RSA 6 (CMA 353);
    (d) CO RSA 7 (CMA 354);
    (e) CO RSA 8 (CMA 355);
    (f) CO RSA 9 (CMA 356);

    (3) Georgia
    (a) Albany MSA (CMA 261);
    (b) GA RSA 6 (CMA 376);
    (c) GA RSA 7 (CMA 377);
    (d) GA RSA 8 (CMA 378);
    (e) GA RSA 9 (CMA 379);
    (f) GA RSA 10 (CMA 380);
    (g) GA RSA 12 (CMA 382);
    (h) GA RSA 13 (CMA 383);

    (4) Idaho
    (a) ID RSA2 (CMA 389);
    (b) ID RSA 3 (CMA 390);

    (5) Illinois
    (a) IL RSA 8 (CMA 401);
    (b) IL RSA 9 (CMA 402);

    (6) Iowa/Nebraska
    (a) Sioux City MSA (CMA 253);
    (b) IA RSA 8 (CMA 419);
    (c) NE RSA 5 (CMA 537);

    (7) Kansas
    (a) KS RSA 1 (CMA 428);
    (b) KS RSA 2 (CMA 429);
    (c) KS RSA 6 (CMA 433);
    (d) KS RSA 7 (CMA 434);
    (e) KS RSA 11 (CMA 438);
    (f) KS RSA 12 (CMA 439);
    (g) KS RSA 13 (CMA 440);

    (8) Southern Minnesota
    (a) MN RSA 7 (CMA 488);

    (9) Montana
    (a) Billings MSA (CMA 268);
    (b) Great Falls MSA (CMA 297);
    (c) MT RSA 1 (CMA 523);
    (d) MT RSA 2 (CMA 524);
    (e) MT RSA 4 (CMA 526);
    (f) MT RSA 5 (CMA 527);
    (g) MT RSA 6 (CMA 528);
    (h) MT RSA 7 (CMA 529);
    (i) MT RSA 8 (CMA 530);
    (j) MT RSA 9 (CMA 531);
    (k) MT RSA 10 (CMA 532);

    (10) Nevada
    (a) NV RSA 2 (CMA 544);
    (b) NV RSA 5 (CMA 547);

    (11) New Mexico
    (a) NM RSA 5 (CMA 557);
    (b) NM RSA 6 (CMA 558);

    (12) North Carolina
    (a) Hickory MSA (CMA 166);
    (b) NC RSA 2 (CMA 566);
    (c) NC RSA 5 (CMA 569);

    (13) North Dakota/Northern Minnesota
    (a) Fargo-Moorhead ND-MN MSA (CMA 221);
    (b) Grand Forks ND-MN MSA (CMA 276);
    (c) Bismarck MSA (CMA 298);
    (d) MN RSA 1 (CMA 482);
    (e) MN RSA 2 (CMA 483);
    (f) ND RSA 1 (CMA 580);
    (g) ND RSA 2 (CMA 581);
    (h) ND RSA 3 (CMA 582);
    (i) ND RSA 4 (CMA 583);
    (j) ND RSA 5 (CMA 584);

    (14) Ohio
    (a) Lima MSA (CMA 158);
    (b) Mansfield MSA (CMA 231);
    (c) OH RSA 2 (CMA 586);
    (d) OH RSA 5 (CMA 589);
    (e) OH RSA 6 (CMA 590);

    (15) South Carolina
    (a) SC RSA 1 (CMA 625);
    (b) SC RSA 2 (CMA 626);
    (c) SC RSA 3 (CMA 627);
    (d) SC RSA 7 (CMA 631);

    (16) South Dakota
    (a) Sioux Falls MSA (CMA 267);
    (b) Rapid City MSA (CMA 289);
    (c) SD RSA 1 (CMA 634);
    (d) SD RSA 2 (CMA 635);
    (e) SD RSA 3 (CMA 636);

[[Page 66929]]

    (f) SD RSA 4 (CMA 637);
    (g) SD RSA 5 (CMA 638);
    (h) SD RSA 6 (CMA 639);
    (i) SD RSA 7 (CMA 640);
    (j) SD RSA 8 (CMA 641);
    (k) SD RSA 9 (CMA 642);

    (17) Utah
    (a) UT RSA 3 (CMA 675);
    (b) UT RSA 4 (CMA 676);
    (c) UT RSA 5 (CMA 677);
    (d) UT RSA 6 (CMA 678);

    (18) Wyoming
    (a) Casper MSA (CMA 299);
    (b) WY RSA 1 (CMA 718);
    (c) WY RSA 2 (CMA 7I9);
    (d) WY RSA 4 (CMA 721);
    (e) WY RSA 5 (CMA 722);

provided however: (i) The Divestiture Assets in Minnesota RSA 7 must be 
divested to the same acquirer as the wireless business assets in 
Minnesota RSA 7 (CMA 488), Minnesota RSA 8 (CMA 489), Minnesota RSA 9 
(CMA 490) and Minnesota RSA 10 (CMA 491), recently purchased by 
defendant Verizon from Rural Cellular Corporation, that must be 
divested pursuant to the proposed Modified Final Judgment in United 
Slates et al. v. ALLTEL Corp. et al., Civ. No. 06-363 1 (RHKJAJB) (D. 
MN filed Sept. 7, 2006); (ii) the Divestiture Assets in New Mexico RSAs 
5 and 6 must be divested to the same acquirer as the wireless business 
assets in the Las Cruces NM MSA (CMA 285), currently owned by defendant 
Alltel, that must be divested pursuant to the proposed Modified Final 
Judgment in United States v. Bell Atlantic Corp. et al, Civ. No. 1 :99C 
Vol 119 (EGS) (D.D.C. filed May 7, 1999); (iii) the Divestiture Assets 
in the Lima and Mansfield OH MSAs and OH RSAs 2, 5 and 6 must be 
divested to the same acquirer as the wireless business assets in the OH 
RSA 3 (CMA 587), currently owned by defendant Alltel, that must be 
divested pursuant to the proposed Modified Final Judgment in United 
States v. Bell Atlantic Corp. et al., Civ. No. 1:99C Vol 119 (EGS) 
(D.D.C. May 7, 1999); and (iv) the Divestiture Assets in SC RSAs 1, 2, 
3 and 7 must be divested to the same acquirer as the wireless business 
assets in the Anderson SC MSA (CMA 227), currently owned by defendant 
Alltel, that must be divested pursuant to the proposed Modified Final 
Judgment in United States v. Bell Atlantic Corp. et al., Civ. No. I 
:99CV01 119 (EGS) (D.D.C. May 7, 1999). In addition to the foregoing, 
nothing in this section shall be construed as limiting the ability of 
an Acquirer to purchase the assets in more than one numbered 
subsection, and defendants shall be required to consider bids from 
potential acquirers that are contingent on the acquisition of all of 
the assets in more than one of the numbered subsections. The assets in 
each CMA license area listed in Subsection II.D of this Final Judgment 
but not listed in any of the above subsections (Danville VA MSA (CMA 
262); AZ RSA 5 (CMA 322); CA RSA 6 (CMA 341); NM RSA 1 (CMA 553); VA 
RSA 1 (CMA 681); and VA RSA 8 (CMA 688)) can be sold to a single 
Acquirer or acquired together with other Divestiture Assets. With the 
written approval of plaintiff United States, in its sole discretion, 
upon consultation with the relevant plaintiff State, defendants or the 
Divestiture Trustee may sell, to a single acquirer, fewer than all of 
the assets contained in the numbered subsections above, to facilitate 
prompt divestiture to an acceptable Acquirer(s).
    J. At the option of the Acquirer(s) of the Divestiture Assets, 
defendants shall enter into a contract for transition services 
customarily provided in connection with the sale of a business 
providing mobile wireless telecommunications services or intellectual 
property licensing sufficient to meet all or part of the needs of the 
Acquirer(s) for a period of up to one year, provided that defendants 
shall only be required to license the Verizon brand to the acquirer(s) 
of the Divestiture Assets in the CMAs listed in Section ILD.3 for a 
period of nine (9) months. The terms and conditions of any contractual 
arrangement meant to satisl3 this provision must be reasonably related 
to market conditions.
    K. To the extent that the Divestiture Assets use intellectual 
property, as required to be identified by Section HD, that cannot be 
transferred or assigned without the consent of the licensor or other 
third parties, defendants shall use their best efforts to obtain those 
consents.

V. Appointment of Divestiture Trustee

    A. If defendants have not divested the Divestiture Assets within 
the time period specified in Section IV.A, defendants shall notify 
plaintiff United States, and the relevant plaintiff State of that fact 
in writing, specifically identifying the Divestiture Assets that have 
not been divested. Upon application of plaintiff United States, upon 
consultation with the relevant plaintiff State, the Court shall appoint 
a Divestiture Trustee selected by plaintiff United States and approved 
by the Court to effect the divestiture of the Divestiture Assets. The 
Divestiture Trustee will have all the rights and responsibilities of 
the Management Trustee who may be appointed pursuant to the 
Preservation of Assets Stipulation and Order, and will be responsible 
for:
    (1) Accomplishing divestiture of all Divestiture Assets transferred 
to the Divestiture Trustee from defendants, in accordance with the 
terms of this Final Judgment, to an Acquirer(s) approved by plaintiff 
United States, in its sole discretion upon consultation with the 
relevant plaintiff State, under Section IV.A of this Final Judgment; 
and
    (2) Exercising the responsibilities of the licensee of any 
transferred Divestiture Assets and controlling and operating any 
transferred Divestiture Assets, to ensure that the businesses remain 
ongoing, economically viable competitors in the provision of mobile 
wireless telecommunications services in the license areas specified in 
Section II.D, until they are divested to an Acquirer(s), and the 
Divestiture Trustee shall agree to be bound by this Final Judgment.
    B. Defendants shall submit a proposed trust agreement (``Trust 
Agreement'') to plaintiff United States, which must be consistent with 
the terms of this Final Judgment and which must receive approval by 
plaintiff United States in its sole discretion, upon consultation with 
the relevant plaintiff State, who shall communicate to defendants 
within 10 business days its approval or disapproval of the proposed 
Trust Agreement, and which must be executed by the defendants and the 
Divestiture Trustee within five business days after approval by 
plaintiff United States.
    C. After obtaining any necessary approvals from the FCC for the 
assignment of the licenses of the Divestiture Assets to the Divestiture 
Trustee, defendants shall irrevocably divest the remaining Divestiture 
Assets to the Divestiture Trustee, who will own such assets (or own the 
stock of the entity owning such assets, if divestiture is to be 
effected by the creation of such an entity for sale to Acquirer) and 
control such assets, subject to the terms of the approved Trust 
Agreement.
    D. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the Divestiture Assets. The Divestiture Trustee shall have the power 
and authority to accomplish the divestiture to an Acquirer(s) 
acceptable to plaintiff United States, in its sole judgment, upon 
consultation with the relevant plaintiff State, at such price and on 
such terms as are then obtainable upon reasonable effort by the 
Divestiture Trustee, subject to the provisions of Sections IV, V, and 
VI of this Final Judgment, and shall have such other powers as this 
Court deems

[[Page 66930]]

appropriate. Subject to Section V.G of this Final Judgment, the 
Divestiture Trustee may hire at the cost and expense of defendants the 
Management Trustee appointed pursuant to the Preservation of Assets 
Stipulation and Order and any investment bankers, attorneys or other 
agents, who shall be solely accountable to the Divestiture Trustee, 
reasonably necessary in the Divestiture Trustee's judgment to assist in 
the divestiture.
    E. In addition, notwithstanding any provision to the contrary, 
plaintiff United States, in its sole discretion, upon consultation with 
the relevant plaintiff State, may (1) require defendants to include 
additional assets, and (2) with the written approval of plaintiff 
United States, allow defendants to substitute substantially similar 
assets, which substantially relate to the Divestiture Assets to be 
divested by the Divestiture Trustee.
    F. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such objections by defendants must be conveyed in writing to plaintiff 
United States and the Divestiture Trustee within 10 calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    G. The Divestiture Trustee shall serve at the cost and expense of 
defendants, on such terms and conditions as plaintiff United States 
approves, and shall account for all monies derived from the sale of the 
assets sold by the Divestiture Trustee and all costs and expenses so 
incurred. After approval by the Court of the Divestiture Trustee's 
accounting, including fees for its services and those of any 
professionals and agents retained by the Divestiture Trustee, all 
remaining money shall be paid to defendants and the trust shall then be 
terminated. The compensation of the Divestiture Trustee and any 
professionals and agents retained by the Divestiture Trustee shall be 
reasonable in light of the value of the Divestiture Assets and based on 
a fee arrangement providing the Divestiture Trustee with an incentive 
based on the price and terms of the divestiture, and the speed with 
which it is accomplished, but timeliness is paramount.
    H. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestitures, 
including their best efforts to effect all necessary regulatory 
approvals. The Divestiture Trustee and any consultants, accountants, 
attorneys, and other persons retained by the Divestiture Trustee shall 
have full and complete access to the personnel, books, records, and 
facilities of the businesses to be divested, and defendants shall 
develop financial and other information relevant to the assets to be 
divested as the Divestiture Trustee may reasonably request, subject to 
reasonable protection for trade secret or other confidential research, 
development, or commercial information. Defendants shall take no action 
to interfere with or to impede the Divestiture Trustee's accomplishment 
of the divestitures.
    I. After its appointment, the Divestiture Trustee shall file 
monthly reports with plaintiff United States, and the relevant 
plaintiff States, and the Court setting forth the Divestiture Trustee's 
efforts to accomplish the divestitures ordered under this Final 
Judgment. To the extent such reports contain information that the 
Divestiture Trustee deems confidential, such reports shall not be filed 
in the public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The 
Divestiture Trustee shall maintain full records of all efforts made to 
divest the (1) investiture Assets.
    J. If the Divestiture Trustee has not accomplished the divestitures 
ordered under the Final Judgment within six months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth (1) The Divestiture Trustee's efforts to 
accomplish the required divestitures, (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestitures have not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent such reports contain information that the Divestiture 
Trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. The Divestiture Trustee shall at the same 
time furnish such report to plaintiff United States, and the relevant 
plaintiff States, who shall have the right to make additional 
recommendations consistent with the purpose of the trust. The Court 
thereafter shall enter such orders as it shall deem appropriate to 
carry out the purpose of the Final Judgment, which may, if necessary, 
include extending the trust and the term of the Divestiture Trustee's 
appointment by a period requested by plaintiff United States, upon 
consultation with the relevant plaintiff States.
    K. After defendants transfer the Divestiture Assets to the 
Divestiture Trustee, and until those Divestiture Assets have been 
divested to an Acquirer or Acquirers approved by plaintiff United 
States pursuant to Sections IV.A and IVU, the Divestiture Trustee shall 
have sole and complete authority to manage and operate the Divestiture 
Assets and to exercise the responsibilities of the licensee and shall 
not be subject to any control or direction by defendants. Defendants 
shall not use, or retain any economic interest in, the Divestiture 
Assets transferred to the Divestiture Trustee, apart from the right to 
receive the proceeds of the sale or other disposition of the 
Divestiture Assets.
    L. The Divestiture Trustee shall operate the Divestiture Assets 
consistent with the Preservation of Assets Stipulation and Order and 
this Final Judgment, with control over operations, marketing, and 
sales. Defendants shall not attempt to influence the business decisions 
of the Divestiture Trustee concerning the operation and management of 
the Divestiture Assets, and shall not communicate with the Divestiture 
Trustee concerning divestiture of the Divestiture Assets or take any 
action to influence, interfere with, or impede the Divestiture 
Trustee's accomplishment of the divestitures required by this Final 
Judgment, except that defendants may communicate with the Divestiture 
Trustee to the extent necessary for defendants to comply with this 
Final Judgment and to provide the Divestiture Trustee, if requested to 
do so, with whatever resources or cooperation may be required to 
complete divestiture of the Divestiture Assets and to carry out the 
requirements of the Preservation of Assets Stipulation and Order and 
this Final Judgment. Except as provided in this Final Judgment and the 
Preservation of Assets Stipulation and Order, in no event shall 
defendants provide to, or receive from, the Divestiture Trustee or the 
mobile wireless telecommunications services businesses any non public 
or competitively sensitive marketing, sales, pricing or other 
information relating to their respective mobile wireless 
telecommunications services businesses.

VI. Notice of Proposed Divestitures

    A. Within the later of two (2) business days following (i) the 
execution of a definitive divestiture agreement, or (ii) the filing of 
the Complaint in this action, defendants or the Divestiture Trustee, 
whichever is then responsible for effecting the divestitures required 
herein, shall notify plaintiff United States, and the relevant 
plaintiff State,

[[Page 66931]]

in writing of any proposed divestiture required by Section IV or V of 
this Final Judgment. If the Divestiture Trustee is responsible, it 
shall similarly notify defendants. The notice shall set forth the 
details of the proposed divestiture and list the name, address, and 
telephone number of each person not previously identified who offered 
or expressed an interest in or desire to acquire any ownership interest 
in the Divestiture Assets, together with fill details of the same.
    B. Within fifteen (15) calendar days of receipt of notice by 
plaintiff United States and the relevant plaintiff State, plaintiff 
United States and any plaintiff State receiving such notice, may 
request from defendants, the proposed Acquirer, any other third party, 
or the Divestiture Trustee, if applicable, additional information 
concerning the proposed divestiture, the proposed Acquirer, and any 
other potential Acquirer. Defendants and the Divestiture Trustee shall 
furnish any additional information requested within fifteen (15) 
calendar days of the receipt of the request, unless the parties shall 
otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after plaintiff United States and the 
relevant plaintiff State have been provided the additional information 
requested from defendants, the proposed Acquirer, any third party, and 
the Divestiture Trustee, whichever is later, plaintiff United Slates, 
upon consultation with the relevant plaintiff State, shall provide 
written notice to defendants and the Divestiture Trustee, if there is 
one, stating whether or not it objects to the proposed divestiture. If 
plaintiff United States provides written notice that it does not 
object, the divestiture may be consummated, subject only to defendants' 
limited right to object to the sale under Section V.F of this Final 
Judgment. Absent written notice that plaintiff United States does not 
object to the proposed Acquirer or upon objection by plaintiff United 
States, a divestiture proposed under Section IV or Section V shall not 
be consummated. Upon objection by defendants under Section V.F, a 
divestiture proposed under Section V shall not be consummated unless 
approved by the Court.

VII. Financing

    Defendants shall not finance all or any part of any divestiture 
made pursuant to Section IV or V of this Final Judgment.

VIII. Preservation of Assets

    Until the divestitures required by this Final Judgment have been 
accomplished, defendants shall take all steps necessary to comply with 
the Preservation of Assets Stipulation and Order entered by this Court 
and cease use of the Divestiture Assets during the period that the 
Divestiture Assets arc managed by the Management Trustee. Defendants 
shall take no action that would jeopardize the divestitures ordered by 
this Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestitures have been completed under Section IV or V, defendants 
shall deliver to plaintiffs an affidavit as to the fact and manner of 
its compliance with Section IV or V of this Final Judgment. Each such 
affidavit shall include the name, address, and telephone number of each 
person who during the preceding thirty (30) calendar days, made an 
offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the Divestiture Assets, and shall describe 
in detail each contact with any such person during that period. Each 
such affidavit shall also include a description of the efforts 
defendants have taken to solicit buyers for the Divestiture Assets, and 
to provide required information to prospective Acquirers, including the 
limitations, if any, on such information. Assuming the information set 
forth in the affidavit is true and complete, any objection by plaintiff 
United States upon consultation with the relevant plaintiff State, to 
information provided by defendants, including limitation on 
information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to plaintiffs an affidavit 
that describes in reasonable detail all actions defendants have taken 
and all steps defendants have implemented on an ongoing basis to comply 
with Section VIII of this Final Judgment. Defendants shall deliver to 
plaintiffs an affidavit describing any changes to the efforts and 
actions outlined in defendants' earlier affidavits filed pursuant to 
this section within fifteen (15) calendar days after the change is 
implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestitures have been completed.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment or whether the Final Judgment should be modified or 
vacated, and subject to any legally recognized privilege, authorized 
representatives of the United States Department of Justice (including 
consultants and other persons retained by plaintiff United States) 
shall, upon written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants, be permitted:
    (1) access during defendants' office hours to inspect and copy, or 
at plaintiff United States's option, to require defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data and documents in the possession, custody, or control of 
defendants, relating to any matters contained in this Final Judgment; 
and
    (2) to interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or response to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by plaintiff United States to any person 
other than an authorized representative of the executive branch of 
plaintiff United States, any relevant plaintiff state, or, pursuant to 
a customary protective order or waiver of confidentiality by 
defendants, the FCC, except in the course of legal proceedings to which 
plaintiff United States is a party (including grand jury proceedings), 
or for the purpose of securing compliance with this Final Judgment, or 
as otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to plaintiff United States, defendants represent and 
identify in writing the material in any such information or documents 
to which a claim of protection may be asserted under Rule 26(c)(l)(G) 
of the Federal Rules of Civil Procedure, and defendants mark each

[[Page 66932]]

pertinent page of such material, ``Subject to claim of protection under 
Rule 26(c)(l)(G) of the Federal Rules of Civil Procedure,'' then 
plaintiff United States shall give defendants ten (10) calendar days 
notice prior to divulging such material in any legal proceeding (other 
than a grand jury proceeding).

XI. No Reacquisition

    Defendants may not reacquire or lease any part of the Divestiture 
Assets during the term of this Final Judgment.

XII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XIV. Public Interest Determination

    Entry of this Final Judgment is in the public interest The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and plaintiff United States's responses to 
comments. Based upon the record before the Court, which includes the 
Competitive Impact Statement and any comments and response to comments 
filed with the Court, entry of this Final Judgment is in the public 
interest.

    Date:

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C 16

United States District Judge

In the United States District Court for the District of Columbia

United States of America, State of Alabama, State of California, State 
of Iowa, State of Kansas, State of Minnesota, State of North Dakota, 
and State of South Dakota, Plaintiffs, v. Verizon Communications Inc. 
and Alltel Corporation, Defendants

Case: 1:08-cv-01878. Assigned To: Sullivan, Emmet G. Assign Date: 10/
30/2008. Description: Antitrust.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Turmey Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendants entered into an Agreement and Plan of Merger dated June 
5, 2008, pursuant to which Verizon Communications Inc. (``Verizon'') 
will acquire Alltel Corporation (``Alltel''). Plaintiffs United States 
and the States of Alabama, California, Iowa, Kansas, Minnesota, North 
Dakota, and South Dakota filed a civil antitrust Complaint on October 
30, 2008, seeking to enjoin the proposed acquisition. The Complaint 
alleges that the likely effect of this acquisition would be to lessen 
competition substantially for mobile wireless telecommunications 
services in 94 Cellular Market Areas (``CMAs'') in Alabama, Arizona, 
California, Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, 
Minnesota, Montana, Nebraska, Nevada, New Mexico, North Carolina, North 
Dakota, Ohio, South Carolina, South Dakota, Utah, Virginia, and Wyoming 
where Verizon and Alltel are among the most significant competitors, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. 18.\1\ This loss 
of competition would result in consumers facing higher prices, lower 
quality service and fewer choices of mobile wireless telecommunications 
services providers.
---------------------------------------------------------------------------

    \1\ In order to alleviate competitive concerns associated with 
the proposed acquisition, defendants also have agreed to divest 
wireless businesses in six additional CMAs, covered by the final 
judgments in United States et al. v. Alltel Corp. et al., Civ. No. 
06-3631 (RHKIAJB) (D. MN filed Sept. 7, 2006), and United States v. 
Bell Atlantic Corp. et al., Civ. No. 1:99CV01119 (EGS) (D.D.C. filed 
May 7, 1999), which prohibit defendants from reacquiring the 
wireless businesses in those CMAs. The wireless businesses in those 
CMAs will be divested pursuant to proposed modifications of those 
Final Judgments.
---------------------------------------------------------------------------

    At the same time the Complaint was filed, plaintiffs also filed a 
Preservation of Assets Stipulation and Order (``Stipulation'') and 
proposed Final Judgment, which are designed to eliminate the 
anticompetitive effects of the acquisition. Under the proposed Final 
Judgment, which is explained more fully below, defendants are required 
to divest mobile wireless telecommunications services businesses and 
related assets in the 94 CMAs (the ``Divestiture Assets''). Under the 
terms of the Stipulation, defendants will take certain steps to ensure 
that, during the pendency of the ordered divestitures, the Divestiture 
Assets are preserved and operated as competitively independent, 
economically viable ongoing businesses without influence by defendants.
    Plaintiffs and defendants have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. Entry of the 
proposed Final Judgment would terminate this action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof. Defendants have also stipulated that they will comply with the 
terms of the Stipulation and the proposed Final Judgment from the date 
of signing of the Stipulation, pending entry of the proposed Final 
Judgment by the Court and the required divestitures. Should the Court 
decline to enter the proposed Final Judgment, defendants have also 
committed to continue to abide by its requirements and those of 
Stipulation until the expiration of time for appeal.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Verizon, with headquarters in New York, is a corporation organized 
and existing under the laws of the state of Delaware. Verizon is one of 
the world's largest providers of communications services. It is the 
second largest mobile wireless telecommunications services provider in 
the United States measured by subscribers, providing mobile wireless 
telecommunications services in 49 states to more than 70 million 
subscribers. In 2007, Verizon earned mobile wireless telecommunications 
services revenues of approximately $43 billion.
    Alltel, a subsidiary of Atlantis Holdings LLC, is a corporation 
organized and existing under the laws of the State of Delaware, with 
headquarters in Little Rock, Arkansas. Alltel is the fifth largest 
mobile wireless telecommunications services provider in the United 
States measured by subscribers providing mobile wireless 
telecommunications services in 13 states to approximately 13 million 
subscribers. In 2007, Alltel earned approximately $8.8 billion in 
mobile wireless telecommunications services revenues.
    Pursuant to an Agreement and Plan of Merger dated June 5, 2008, 
Verizon will acquire Alltel for approximately $28 billion. If this 
transaction is consummated, Verizon and Alltel combined would have 
approximately 83 million subscribers in the United States, with over 
$51 billion in mobile wireless telecommunications services revenues.

[[Page 66933]]

The proposed transaction, as initially agreed to by defendants, would 
lessen competition substantially for mobile wireless telecommunications 
services in a large number of CMAs in Alabama, Arizona, California, 
Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, Minnesota, Montana, 
Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Ohio, South 
Carolina, South Dakota, Utah, Virginia, and Wyoming. This acquisition 
is the subject of the Complaint and proposed Final Judgment filed by 
plaintiffs.

B. Mobile Wireless Telecommunications Services Industry

    Mobile wireless telecommunications services allow customers to make 
and receive telephone calls and obtain data services using radio 
transmissions without being confined to a small area during the call or 
data session, and without the need for unobstructed line-of-sight to 
the radio tower. Mobility is highly valued by customers, as 
demonstrated by the more than 262 million people in the United States 
who own mobile wireless telephones. In 2007, revenues from the sale of 
mobile wireless telecommunications services in the United States were 
over $138 billion. To meet this desire for mobility, mobile wireless 
telecommunications services providers must deploy extensive networks of 
switches, radio transmitters, and receivers and interconnect their 
networks with the networks of wireline carriers and other mobile 
wireless telecommunications services providers.
    In the early to mid-1980s, the FCC issued two cellular licenses (A-
block and B-block) in each Metropolitan Statistical Area (``MSA'') and 
Rural Service Area (``RSA'') (collectively, CMAs), for a total of 734 
CMAs covering the entire United States. Each license consists of 25 MHz 
of spectrum in the 800 MHz band. The first mobile wireless voice 
systems using this cellular spectrum were based on analog technology, 
now referred to as first-generation or ``1G'' technology.
    In 1995, the FCC licensed additional spectrum for the provision of 
Personal Communications Services (``PCS''), a category of services that 
includes mobile wireless telecommunications services comparable to 
those offered by cellular licensees. These licenses are in the 1900 MHz 
band and are divided into six blocks: A, B, and C, which consist of 30 
MHz each; and D, E, and F, which consist of 10 MHz each. 
Geographically, the A- and B-block 30 MHz licenses are issued by Major 
Trading Areas (``MTAs''). C-, D-, E-, and F-block licenses are issued 
by Basic Trading Areas (``BTAs''), several of which comprise each MTA. 
MTAs and BTAs do not generally correspond to MSAs and RSAs. With the 
introduction of the PCS licenses, both cellular and PCS licensees began 
offering digital services, thereby increasing network capacity, 
shrinking the size of handsets, and extending handset battery life. In 
addition, in 1996, a specialized mobile radio (``SMR'' or ``dispatch'') 
spectrum licensee, began using SMR spectrum to offer mobile wireless 
telecommunications services comparable to those offered by other mobile 
wireless telecommunications services providers, in conjunction with its 
dispatch, or ``push-to-talk,'' service.
    Although there are a number of providers holding spectrum licenses 
in each area of the country, not all providers have fully built out 
their networks throughout each license area. In particular, because of 
the characteristics of PCS spectrum, providers holding this type of 
spectrum generally have found it less attractive to build out in rural 
areas.
    Today, more than 95 percent of the total U.S. population lives in 
counties where three or more mobile wireless telecommunications 
services operators offer service. Nearly all mobile wireless voice 
services have migrated to the second-generation, or ``2G'' digital 
technologies, using GSM (global standard for mobility) or CDMA (code 
division multiple access). Even more advanced technologies (``2.5G'' 
and ``3G''), based on the earlier 2G technologies, have now been 
deployed for mobile wireless data services. Additionally, during the 
past two years, the FCC has auctioned off additional spectrum that can 
be used to support mobile wireless telecommunications services, 
including Advanced Wireless Spectrum (1710-1755 MHz and 2110-2155 MHz 
bands) and 700 MHz band spectrum, although it will be several years 
before mobile wireless telecommunications services utilizing this 
spectrum are widely deployed.

C. The Competitive Effects of the Transaction on Mobile Wireless 
Telecommunications Services

    Mobile wireless telecommunications services include both voice and 
data services provided over a radio network and allow customers to 
maintain their telephone calls or data sessions without wires when 
traveling. There are no cost-effective alternatives to mobile wireless 
telecommunications services. Because fixed wireless services are not 
mobile, they are not regarded by consumers of mobile wireless 
telecommunications services to be a reasonable substitute for those 
services. It is unlikely that a sufficient number of customers would 
switch away from mobile wireless telecommunications services to make a 
small but significant price increase in those services unprofitable.
    The United States comprises numerous local geographic markets for 
mobile wireless telecommunications services.\2\ A large majority of 
customers use mobile wireless telecommunications services in close 
proximity to their workplaces and homes. Thus, customers purchasing 
mobile wireless telecommunications services choose among mobile 
wireless telecommunications services providers that offer services 
where they live, work, and travel on a regular basis. The geographic 
areas in which the FCC has licensed mobile wireless telecommunications 
services providers often represent the core of the business and social 
sphere within which customers have the same competitive choices for 
mobile wireless telephone services. The number and identity of mobile 
wireless telecommunications services providers varies among geographic 
areas, as does the quality of services and breadth of geographic 
coverage offered by providers. Some mobile wireless telecommunications 
services providers can and do offer different promotions, discounts, 
calling plans, and equipment subsidies in different geographic areas, 
varying the price for customers by geographic area.
---------------------------------------------------------------------------

    \2\ The existence of local markets does not preclude the 
possibility of competitive effects in a broader geographic area, 
such as a regional or national area, though plaintiff United States 
does not allege such effects in this transaction.
---------------------------------------------------------------------------

    The relevant geographic markets, under Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18, where the transaction would substantially 
lessen competition for mobile wireless telecommunications services are 
effectively represented by the following FCC spectrum licensing areas:
    (1) Lima OH MSA (CMA 158);
    (2) Hickory NC MSA (CMA 166);
    (3) Fargo-Moorhead ND-MN MSA (CMA 523);
    (4) Mansfield OH MSA (CMA 231);
    (5) Dothan AL MSA (CMA 246);
    (6) Sioux City IA-NE MSA (CMA 253);
    (7) Albany GA MSA (CMA 261);
    (8) Danville VA MSA (CMA 262);
    (9) Sioux Falls SD MSA (CMA 267);
    (10) Billings MT MSA (CMA 268);
    (11) Grand Forks ND-MN MSA (CMA 276);
    (12) Rapid City SD MSA (CMA 289);
    (13) Great Falls MT MSA (CMA 297);
    (14) Bismarck ND MSA (CMA 298);
    (15) Casper WY MSA (CMA 299);
    (16) AL RSA 7 (CMA313);

[[Page 66934]]

    (17) AZ RSA 5 (CMA 322);
    (18) CA RSA 6 (CMA 341);
    (19) CO RSA 4 (CMA 351);
    (20) CO RSA 5 (CMA 352);
    (21) CO RSA 6 (CMA 353);
    (22) CO RSA 7 (CMA 354);
    (23) CO RSA 8 (CMA 355);
    (24) CO RSA 9 (CMA 356);
    (25) GA RSA 6 (CMA 376);
    (26) GA RSA 7 (CMA 377);
    (27) GA RSA 8 (CMA 378);
    (28) GA RSA 9 (CMA 379);
    (29) GA RSA 10 (CMA 380);
    (30) GA RSA 12 (CMA 382);
    (31) GA RSA 13 (CMA 383);
    (32) ID RSA 2 (CMA 389);
    (33) ID RSA 3 (CMA 390);
    (34) IL RSA 8 (CMA 401);
    (35) IL RSA 9 (CMA 402);
    (36) IA RSA 8 (CMA 419);
    (37) KS RSA 1 (CMA 428);
    (38) KS RSA 2 (CMA 429);
    (39) KS RSA 6 (CMA 433);
    (40) KS RSA 7 (CMA 434);
    (41) KS RSA 11 (CMA438);
    (42) KS RSA 12 (CMA 439);
    (43) KS RSA 13 (CMA 440);
    (44) MN RSA 1 (CMA 482);
    (45) MN RSA 2 (CMA 483);
    (46) MN RSA 7 (CMA 488);
    (47) MT RSA 1 (CMA 523);
    (48) MT RSA 2 (CMA 524);
    (49) MT RSA 4 (CMA 526);
    (50) MT RSA 5 (CMA 527);
    (51) MT RSA 6 (CMA 528);
    (52) MT RSA 7 (CMA 529);
    (53) MT RSA 8 (CMA 530);
    (54) MT RSA 9 (CMA 531);
    (55) MT RSA 10 (CMA 532);
    (56) NE RSA 5 (CMA 537);
    (57) NV RSA 2 (CMA 544);
    (58) NV RSA 5 (CMA 547);
    (59) NM RSA 1 (CMA 553);
    (60) NM RSA 5 (CMA 557);
    (61) NM RSA 6 (CMA 558);
    (62) NC RSA 2 (CMA 566);
    (63) NC RSA 5 (CMA 569);
    (64) ND RSA 1 (CMA 580);
    (65) ND RSA 2 (CMA 581);
    (66) ND RSA 3 (CMA 582);
    (67) ND RSA 4 (CMA 583);
    (68) ND RSA 5 (CMA 584);
    (69) OH RSA 2 (CMA 586);
    (70) OH RSA 5 (CMA 589);
    (71) OH RSA 6 (CMA 590);
    (72) SC RSA 1 (CMA 625);
    (73) SC RSA 2 (CMA 626);
    (74) SC RSA 3 (CMA 627);
    (75) SC RSA 7 (CMA 631);
    (76) SD RSA 1 (CMA 634);
    (77) SD RSA 2 (CMA 635);
    (78) SD RSA 3 (CMA 636);
    (79) SD RSA 4 (CMA 637);
    (80) SD RSA 5 (CMA 638);
    (81) SD RSA 6 (CMA 639);
    (82) SD RSA 7 (CMA 640);
    (83) SD RSA 8 (CMA 641);
    (84) SD RSA 9 (CMA 642);
    (85) UT RSA 3 (CMA 675);
    (86) UT RSA 4 (CMA 676);
    (87) UT RSA 5 (CMA 677);
    (88) UT RSA 6 (CMA 678);
    (89) VA RSA 1 (CMA 681);
    (90) VA RSA 8 (CMA 688);
    (91) WY RSA 1 (CMA 718);
    (92) WY RSA 2 (CMA 719);
    (93) WY RSA 4 (CMA 721); and
    (94) WY RSA 5 (CMA 722).
    It is unlikely that a sufficient number of customers would switch 
to mobile wireless telecommunications services providers who do not 
offer services in these geographic areas to make a small but 
significant price increase in the relevant geographic markets 
unprofitable.
    These geographic areas of concern for mobile wireless 
telecommunications services were identified via a fact-specific, 
market-by-market analysis that included consideration of, but was not 
limited to, the following factors: the number of mobile wireless 
telecommunications services providers and their competitive strengths 
and weaknesses; Verizon's and Alltel's market shares, along with those 
of the other providers; whether additional spectrum is, or is likely 
soon to be, available; whether any providers are limited by 
insufficient spectrum or other factors in their ability to add new 
customers; concentration in the market, and the breadth and depth of 
coverage by different providers in each area and in the surrounding 
area; each carrier's network coverage in relationship to the population 
density of the license area; each provider's retail presence; local 
wireless number portability data; and the likelihood that any provider 
would expand its existing coverage or that new providers would enter.
    Verizon and Alltel are significant providers of mobile wireless 
telecommunications services in each of the CMAs listed above. Their 
combined share of subscribers in each area ranges from over 55 percent 
to 100 percent. In addition, each is the other's closest competitor for 
a significant set of customers.
    Verizon and Alltel each hold cellular spectrum licenses in all but 
two of these CMAs Verizon does not own cellular spectrum in the other 
two CMAs--NE RSA 5 and MN RSA 7--but is a strong competitor because, 
unlike many other providers with PCS spectrum in rural areas, it has 
constructed a PCS network that covers a significant portion of the 
population. Considering these factors, defendants Verizon and Alltel 
are also strong and close competitors considering their brand 
recognition, service quality and reputation, coverage, handset 
selection, and service features.
    The relevant geographic markets for mobile wireless services are 
highly concentrated. As measured by the Herfindahl-Hirschman Index 
(``HHI''), which is commonly employed in merger analysis and is defined 
and explained in Appendix B to the Complaint, concentration in these 
geographic areas ranges from over 2100 to more than 9100, which is well 
above the 1800 threshold at which plaintiffs consider a market to be 
highly concentrated. After Verizon's proposed acquisition of Alltel is 
consummated, the HHIs in the relevant geographic areas will range from 
over 4000 to 10,000, with increases in the HHI as a result of the 
merger ranging from over 300 to over 4900, significantly beyond the 
thresholds at which plaintiffs consider a transaction likely to cause 
competitive harm.
    Competition between Verizon and Alltel in the relevant geographic 
areas has resulted in lower prices and higher quality in mobile 
wireless telecommunications services than otherwise would have existed 
in these geographic areas. If Verizon's proposed acquisition of Alltel 
is consummated, competition between Verizon and Alltel in mobile 
wireless telecommunications services will be eliminated in these areas. 
As a result, the loss of competition between Verizon and Alltel 
increases the merged firm's incentive and ability in the relevant 
geographic markets to increase prices, diminish the quality or quantity 
of services provided, and refrain from or delay making investments in 
network improvements.
    Entry by a new mobile wireless services provider in the relevant 
geographic areas would be difficult, time-consuming, and expensive, 
requiring spectrum licenses and the build out of a network. Therefore, 
any entry in response to a small but significant price increase for 
mobile wireless telecommunications services by the merged firm in these 
relevant geographic areas would not be timely, likely, or sufficient to 
thwart the competitive harm resulting from Verizon's proposed 
acquisition of Alltel, if it were consummated without the divestitures 
provided for in the proposed Final Judgment.
    For these reasons, plaintiffs concluded that Verizon's proposed 
acquisition of Alltel likely would substantially lessen competition, in 
violation of Section 7 of the Clayton Act, in the provision of mobile 
wireless telecommunications services in the relevant geographic areas 
alleged in the Complaint.

[[Page 66935]]

III. Explanation of the Proposed Final Judgment

    The divestiture requirements of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in mobile 
wireless telecommunications services in the geographic areas of 
concern. The proposed Final Judgment requires defendants to divest the 
Divestiture Assets within one hundred twenty days after the 
consummation of the Transaction, or five days after notice of the entry 
of the Final Judgment by the Court, whichever is later. The Divestiture 
Assets are essentially the entire mobile wireless telecommunications 
services businesses of one of the merging companies in the geographic 
areas described herein where Verizon and Alltel are each other's close 
competitors for mobile wireless telecommunications services. These 
assets must be divested in such a way as to satisfy plaintiff United 
States in its sole discretion upon consultation with the relevant 
plaintiff state that the assets will be operated by the purchaser as a 
viable, ongoing business that can compete effectively in each relevant 
area. Defendants must take all reasonable steps necessary to accomplish 
the divestitures quickly and shall cooperate with prospective 
purchasers.
    The proposed Final Judgment requires that a single purchaser 
acquire all of the Divestiture Assets in each of the following numbered 
subsections:
(1) Alabama (a) Dothan MSA (CMA 246); (b) ALRSA7 (CMA313);

(2) Colorado (a) CO RSA 4 (CMA 351); (b) CO RSA 5 (CMA 352); (c) CO RSA 
6 (CMA 353); (d) CO RSA 7 (CMA 354); (e) CO RSA 8 (CMA 355); (f) CO RSA 
9 (CMA 356);

(3) Georgia (a) Albany MSA (CMA 261); (b) GA RSA 6 (CMA 376); (c) GA 
RSA 7 (CMA 377); (d) GA RSA 8 (CMA 378); (e) GA RSA 9 (CMA 379); (f) GA 
RSA 10 (CMA 380); (g) GA RSA 12 (CMA 382); (h) GA RSA 13 (CMA 383);

(4) Idaho (a) ID RSA 2 (CMA 389); (b) ID RSA 3 (CMA 390);

(5) Illinois (a) IL RSA 8 (CMA 401); (b) IL RSA 9 (CMA 402);

(6) Iowa/Nebraska (a) Sioux City MSA (CMA 253); (b) IA RSA 8 (CMA 419); 
(c) NE RSA 5 (CMA 537);

(7) Kansas (a) KS RSA 1 (CMA 428); (b) KS RSA 2 (CMA 429); (c) KS RSA 6 
(CMA 433); (d) KS RSA 7 (CMA 434); (e) KS RSA 11 (CMA 438); (f) KS RSA 
12 (CMA 439); (g) KS RSA 13 (CMA 440);

(8) Southern Minnesota\3\ (a) MN RSA 7 (CMA 488);

    \3\ In addition, defendants will divest the wireless businesses 
in MN RSAs 7 through 10, recently acquired by Verizon from Rural 
Cellular Corporation, pursuant to the proposed Modified Final 
Judgment in United States et al. v. Alltel Corp. et al., Civ. No. 
06-3631 (RHKJAJB) (D. MN filed Sept. 7, 2006), to the same acquirer 
as the acquirer of the Divestiture Assets in the CMA specified in 
this subsection.

(9) Montana (a) Billings (CMA 268); (b) Great Falls (CMA 297); (c) MT 
RSA 1 (CMA 523); (d) MT RSA 2 (CMA 524); (e) MT RSA 4 (CMA 526); (f) MT 
RSA 5 (CMA 527); (g) MT RSA 6 (CMA 528); (h) MT RSA 7 (CMA 529); (i) MT 
---------------------------------------------------------------------------
RSA 8 (CMA 530); (j) MT RSA 9 (CMA 531); (k) MT RSA 10 (CMA 532);

(10) Nevada (a) NV RSA 2 (CMA 544); (b) NV RSA 5 (CMA 547);
(11) New Mexico\4\ (a) NM RSA 5 (CMA 557); (b) NM RSA 6 (CMA 558);
---------------------------------------------------------------------------

    \4\ In addition, defendants will divest the wireless business in 
the Las Cruces MSA (CMA 285), currently owned by Alltel, pursuant to 
the proposed Modified Final Judgment in United States v. Bell 
Atlantic Corp. et al., Civ. No. 1 :99CV01 119 (EGS) (D.D.C. filed 
May 7, 1999), to the same acquirer as the acquirer of the 
Divestiture Assets in the CMAs specified in this subsection.

(12) North Carolina (a) Hickory MSA (CMA 166); (b) NC RSA 2 (CMA 566); 
---------------------------------------------------------------------------
(c) NC RSA 5 (CMA 569);

(13) North Dakota/Northern Minnesota (a) Fargo-Moorhead ND-MN (CMA 
523); (b) Grand Forks ND-MN (CMA 276); (c) Bismarck MSA (CMA 298); (d) 
MN RSA 1 (CMA 482); (e) MN RSA 2 (CMA 483); (f) ND RSA 1 (CMA 580); (g) 
ND RSA2 (CMA 581); (h) ND RSA 3 (CMA 582); (i) NI RSA 4 (CMA 583); (j) 
ND RSA 5 (CMA 584);

(14) Ohio\5\ (a) Lima MSA (CMA 158); (b) Mansfield MSA (CMA 231); (c) 
OH RSA 2 (CMA 586); (d) OH RSA 5 (CMA 589); (e) OH RSA 6 (CMA 590);
---------------------------------------------------------------------------

    \5\ In addition, defendants will divest the wireless business in 
OH RSA 3 (CMA 587), currently owned by Alltel, pursuant to the 
proposed Modified Final Judgment in United States v. Bell Atlantic 
Corp. et al., Civ. No. I :99CV01 19 (EGS) (DD.C. filed May 7, 1999), 
to the same acquirer as the acquirer of the Divestiture Assets in 
the CMAs specified in this subsection.

(15) South Carolina\6\ (a) SC RSA 1 (CMA 625); (b) SC RSA 2 (CMA 626); 
(c) SC RSA 3 (CMA 627); (d) SC RSA 7 (CMA 631);
---------------------------------------------------------------------------

    \6\ In addition, defendants will divest the wireless business in 
the Anderson MSA (CMA 227), currently owned by Alltel, pursuant to 
the proposed Modified Final Judgment in United States v. Bell 
Atlantic Corp. et al., Civ. No. 1 :99C VOl 19 (EGS) (D.D.C. May 7, 
1999), to the same acquirer as the acquirer of the Divestiture 
Assets in the CMA specified in this subsection.

(16) South Dakota (a) Sioux Falls MSA (CMA 267); (b) Rapid City MSA 
(CMA 289); (c) SD RSA 1 (CMA 634); (d) SD RSA 2 (CMA 635); (e) SD RSA 3 
(CMA 636); (f) SD RSA 4 (CMA 637); (g) SD RSA 5 (CMA 638); (h) SD RSA 6 
(CMA 639); (i) SD RSA 7 (CMA 640); (j) SD RSA 8 (CMA 641); (k) SD RSA 9 
---------------------------------------------------------------------------
(CMA 642);

(17) Utah (a) UT RSA 3 (CMA 675); (b) UT RSA 4 (CMA 676); (c) UT RSA 5 
(CMA 677); (d) UT RSA 6 (CMA 678);

(18) Wyoming (a) Casper MSA (CMA 299); (b) WY RSA 1 (CMA 718); (c) WY 
RSA 2 (CMA 719); (d) WY RSA 4 (CMA 721); (e) WY RSA 5 (CMA 722).

    The CMAs have been grouped to reflect the fact that carriers 
frequently are more competitive where they serve contiguous areas. Some 
customers often travel across FCC licensing areas, so operating a 
larger contiguous service area can be an important feature for selling 
the product in each affected market. Moreover, there may be significant 
efficiencies associated with serving a broader geographic area. In 
deciding on the particular packages to require, plaintiff United States 
recognized that selling areas with significant linkages across these 
areas provides greater assurance that the buyer will be an effective 
competitor. Plaintiff United States also recognized, however, that 
larger packages might discourage potential buyers who might otherwise 
have the strongest incentives to replace the lost competition in any 
one particular area. The proposed Final Judgment strikes a balance 
between these potential issues by creating bundles that are 
geographically linked but allowing potential buyers to effectively 
suggest larger packages by bidding conditionally on multiple packages. 
The proposed Final Judgment also gives plaintiff United States in its 
sole discretion upon consultation with the relevant plaintiff State the 
flexibility to allow even smaller packages of assets as appropriate to 
ensure a successful divestiture.

A. Timing of Divestitures

    In antitrust cases involving mergers or joint ventures in which the 
United States seeks a divestiture remedy, it requires completion of the 
divestitures within the shortest time period reasonable under the 
circumstances. Section IV.A of the proposed Final Judgment in this case 
requires divestiture of the Divestiture Assets, within 120 days after 
the consummation of the Transaction, or five days after notice of the 
entry of the Final Judgment by the Court, whichever is later. Plaintiff 
United States in its sole discretion, upon consultation with the 
relevant plaintiff State, may extend the date for divestiture of the 
Divestiture

[[Page 66936]]

Assets by up to 60 days. Because the FCC's approval is required for the 
transfer of the wireless licenses to a purchaser, Section IV.A provides 
that if applications for transfer of a wireless license have been filed 
with the FCC, but the FCC has not acted dispositively before the end of 
the required divestiture period, the period for divestiture of those 
assets shall be extended until five days after the FCC has acted. This 
extension is to be applied only to the individual Divestiture Assets 
affected by the delay in approval of the license transfer and does not 
entitle defendants to delay the divestiture of any other Divestiture 
Assets for which license transfer approval is not required or has been 
granted.
    The divestiture timing provisions of the proposed Final Judgment 
will ensure that the divestitures are carried out in a timely manner, 
and at the same time will permit defendants an adequate opportunity to 
accomplish the divestitures through a fair and orderly process. Even if 
all Divestiture Assets have not been divested upon consummation of the 
transaction, there should be no adverse impact on competition given the 
limited duration of the period of common ownership and the detailed 
requirements of the Stipulation.

B. Use of a Management Trustee

    The Stipulation filed simultaneously with this Competitive Impact 
Statement ensures that the Divestiture Assets remain an ongoing 
business concern prior to divestiture. To accomplish this objective, 
the Stipulation provides for the appointment of a management trustee 
selected by plaintiff United States upon consultation with the 
plaintiff States, to oversee the operations of the Divestiture Assets. 
The appointment of a management trustee is appropriate because the 
Divestiture Assets are not independent facilities that can be held 
separate and operated as stand alone units, but are an integral part of 
a larger network which, to maintain their competitive viability and 
economic value, should remain part of that network during the 
divestiture period. A management trustee will oversee the continuing 
relationship between defendants and these assets to ensure that these 
assets are preserved and supported by defendants during this period, 
yet run independently. The management trustee will have the power to 
operate the Divestiture Assets in the ordinary course of business, so 
that they will remain independent and uninfluenced by defendants and so 
that the Divestiture Assets are preserved and operated as an ongoing 
and economically viable competitor to defendants and to other mobile 
wireless telecommunications services providers. The management trustee 
will preserve the confidentiality of competitively sensitive marketing, 
pricing, and sales information; ensure defendants' compliance with the 
Stipulation and the proposed Final Judgment; and maximize the value of 
the Divestiture Assets so as to permit expeditious divestiture in a 
manner consistent with the proposed Final Judgment.
    The Stipulation provides that defendants will pay all costs and 
expenses of the management trustee, including the cost of consultants, 
accountants, attorneys, and other representatives and assistants hired 
by the management trustee as are reasonably necessary to carry out his 
or her duties and responsibilities. After his or her appointment 
becomes effective, the management trustee will file monthly reports 
with plaintiffs setting forth efforts taken to accomplish the goals of 
the Stipulation and the proposed Final Judgment and the extent to which 
defendants are fulfilling their responsibilities. Finally, the 
management trustee may become the divestiture trustee, pursuant to the 
provisions of Section V of the proposed Final Judgment.

C. Use of a Divestiture Trustee

    In the event that defendants do not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, the Final 
Judgment provides that the Court will appoint a trustee selected by 
plaintiff United States upon consultation with the relevant plaintiff 
State, to effect the divestitures. As part of this divestiture, 
defendants must continue, as has been the practice while the businesses 
have been managed by the Management Trustee, to relinquish any direct 
or indirect financial control and any direct or indirect role in 
management. Pursuant to Section V of the proposed Final Judgment, the 
divestiture trustee will have the legal right to control the 
Divestiture Assets until they are sold to a final purchaser, subject to 
safeguards to prevent defendants from influencing their operation.
    Section V details the requirements for the establishment of the 
divestiture trust, the selection and compensation of the divestiture 
trustee, the responsibilities of the divestiture trustee in connection 
with the divestiture and operation of the Divestiture Assets, and the 
termination of the divestiture trust. The divestiture trustee will have 
the obligation and the sole responsibility, under Section V.D, for the 
divestiture of any transferred Divestiture Assets. The divestiture 
trustee has the authority to accomplish divestitures at the earliest 
possible time and ``at such price and on such terms as are then 
obtainable upon reasonable effort by the Divestiture Trustee.'' In 
addition, to ensure that the divestiture trustee can promptly locate 
and divest to an acceptable purchaser, plaintiff United States, in its 
sole discretion upon consultation with the relevant plaintiff State, 
may require defendants to include additional assets, or allow 
defendants to substitute substantially similar assets, which 
substantially relate to the Divestiture Assets to be divested by the 
divestiture trustee.
    The divestiture trustee will not only have responsibility for sale 
of the Divestiture Assets, but will also be the authorized holder of 
the wireless licenses, with full responsibility for the operations, 
marketing, and sales of the wireless businesses to be divested, and 
will not be subject to any control or direction by defendants. 
Defendants will continue to have no role in the operation, or 
management of the Divestiture Assets other than the right to receive 
the proceeds of the sale. Defendants will also retain certain 
obligations to support the Divestiture Assets and cooperate with the 
divestiture trustee in order to complete the divestiture.
    The proposed Final Judgment provides that defendants will pay all 
costs and expenses of the divestiture trustee. The divestiture 
trustee's commission will be structured, under Section V.G of the 
proposed Final Judgment, so as to provide an incentive for the 
divestiture trustee based on the price obtained and the speed with 
which the divestitures are accomplished. After his or her appointment 
becomes effective, the divestiture trustee will file monthly reports 
with the Court and plaintiffs setting forth his or her efforts to 
accomplish the divestitures. Section V.J requires the divestiture 
trustee to divest the Divestiture Assets to an acceptable purchaser or 
purchasers no later than six months after the assets are transferred to 
the divestiture trustee. At the end of six months, if all divestitures 
have not been accomplished, the trustee and plaintiffs will make 
recommendations to the Court, which shall enter such orders as 
appropriate in order to carry out the purpose of the Final Judgment, 
including extending the trust or term of the trustee's appointment
    The divestiture provisions of the proposed Final Judgment will 
eliminate

[[Page 66937]]

the anticompetitive effects of the transaction in the provision of 
mobile wireless telecommunications services. The divestitures of the 
Divestiture Assets will preserve competition in mobile wireless 
telecommunications services by maintaining an independent and 
economically viable competitor in the relevant geographic areas.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, IS U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty days of the date of publication of this Competitive Impact 
Statement in the Federal Register or the last date of publication in a 
newspaper of the summary of this Competitive Impact Statement, which 
ever is later. All comments received during this period will be 
considered by the Department of Justice, which remains free to withdraw 
its consent to the proposed Final Judgment at any time prior to the 
Court's entry of judgment. The comments and the response of plaintiff 
United States will be filed with the Court and published in the Federal 
Register.
    Written comments should be submitted to:
    Nancy M. Goodman, Chief, Telecommunications and Media Enforcement 
Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, 
NW., Suite 8000, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgement

    Plaintiffs considered, as an alternative to the proposed Final 
Judgment, a full trial on the merits against defendants. Plaintiffs 
could have continued the litigation and sought preliminary and 
permanent injunctions against Verizon's acquisition of Alltel. 
Plaintiffs are satisfied, however, that the divestiture of assets and 
other relief described in the proposed Final Judgment will preserve 
competition for the provision of mobile wireless telecommunications 
services in the relevant areas identified in the Complaint.

VII. Standard of Review Under the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(l). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:

    A. The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    B. The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

    15 U.S.C. l6(e)(l)(A) & (B). In considering these statutory 
factors, the court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reach of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cii. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1, 11 (D.D.C. 
2007) (assessing the public interest standard under the Tunney Act).\7\
---------------------------------------------------------------------------

    \7\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for a court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. I 6(e)(1) (2006); see also SBC 
Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS. Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001). Courts have held that:

    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

    Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\8\ 
In determining whether a proposed settlement is in the public interest, 
a district court ``must accord deference to the government's 
predictions about the efficacy of its remedies, and may not require 
that the remedies perfectly match the alleged violations.'' SBC

[[Page 66938]]

Commc'ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 
(noting the need for courts to be ``deferential to the government's 
predictions as to the effect of the proposed remedies''); United States 
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) 
(noting that the court should grant due respect to the United States' 
prediction as to the effect of proposed remedies, its perception of the 
market structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \8\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the {APPAJ is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies {obtained in the decree 
are{time}  so inconsonant with the allegations charged as to fall 
outside of the `reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have great flexibility in approving proposed consent decrees 
than in crafting their own decrees following a finding of liability in 
a litigated matter. ``[A] proposed decree must be approved even if it 
falls short of the remedy the court would impose on its own, as long as 
it falls within the range of acceptability or is `within the reaches of 
public interest.' '' United States v. Am. Tel, & Tel. Co., 552 F. Supp. 
131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v. 
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. 
Maryland v. United States, 460 U.S. 1001 (1983); see also United States 
v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) 
(approving the consent decree even though the court would have imposed 
a greater remedy). To meet this standard, the United States ``need only 
provide a factual basis for concluding that the settlements are 
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 
F. Supp. 2d at 17.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 145 9-60. As this Court recently confirmed in SBC Communications, 
courts ``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction ``[nothing in this 
section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). The language wrote into the statute 
what the Congress that enacted the Tunney Act in 1974 intended, as 
Senator Tunney then explained: ``[t]he court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' 119 Cong. Rec. 24,598 (1973) 
(statement of Senator Tunney). Rather, the procedure for the public 
interest determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\9\
---------------------------------------------------------------------------

    \9\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am Dairymen, Inc., 1977-1 Trade Cas. (CCII) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by plaintiff United States in 
formulating the proposed Final Judgment.

    Dated: October 30, 2008

Respectfully submitted,

Hillary B. Burchuk (D.C. Bar No. 366755)

Lawrence M. Frankel (D.C. Bar No. 441532)

Jared A. Hughes

Attorneys, Telecommunications & Media, Enforcement Section, 
Antitrust Division, U.S. Department of Justice, City Center 
Building, 1401 H Street, N.W., Suite 8000, Washington, D.C. 20530, 
(202) 514-5621, Facsimile: (202) 514-6381.

 [FR Doc. E8-26564 Filed 11-10-08; 8:45 am]
BILLING CODE 4410-11-M