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DOJ Requires Verizon to Divest for Merger

Verizon Communications must sell off portions of Unicel's mobile network in order to complete its US$2.7 billion acquisition of the company, the U.S. Department of Justice said Tuesday.

The DOJ will require Verizon to sell off Unicel's mobile phone infrastructure in six geographic areas in Vermont, New York state and Washington state, including Burlington, Vermont, the agency said. The DOJ's Antitrust Division filed a civil lawsuit Tuesday in U.S. District Court for the District of Columbia, asking the court to block the proposed acquisition unless Verizon agrees to the DOJ's recommendations. The DOJ also filed a proposed consent decree that would resolve the issues.

The acquisition, as proposed, would have "substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, potentially resulting in higher prices, lower quality and reduced network investments," the DOJ said in a news release.

Unicel's legal name is Rural Cellular. Rural Cellular is the 10th largest mobile provider in the U.S., providing mobile service to nearly 790,000 subscribers in 15 states, the DOJ said.

Verizon is the second largest mobile service provider in the U.S., based on the number of subscribers. Verizon Wireless serves more than 65 million customers in 49 states.

In the geographic areas covered in the DOJ complaint, Verizon and Rural Cellular combined serve more than 60 percent of mobile subscribers, the DOJ said.

The acquisition also is subject to review by the U.S. Federal Communications Commission. The state of Vermont joined the DOJ in the complaint and proposed consent decree.

Verizon spokespeople were not immediately available for comment.

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