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FCC Pumps Brakes on Review of Verizon-XO Deal

Regulation

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in May-June 2016.**

Verizon’s pending $1.8 billion purchase of XO Communications’ fiber-optic network business has hit another snag.

In May, Bill Hooper, XO’s vice president of partner channel, said the Verizon wireline workers’ strike, which lasted seven weeks, stalled the acquisition process. Now, the Federal Communications Commission is pausing its 180-day review of the deal.

In a letter filed by FCC Wireline Competition Bureau Chief Matt DelNero, the agency issued information requests to XO Holdings and Verizon with a return date of July 7. As of July 20, “neither applicant has completed their production of responsive material. Further, with respect to certain information requests, no anticipated production date has been offered.”

FCC's Matt DelNeroThe FCC paused its review on day 86 of the 180-day review.

“We will restart the clock upon completion of the applicants’ responses as discussed herein,” DelNero said.

Verizon spokesperson John O’Malley said it’s not unusual for the FCC to “stop the clock” for a period of time during a proceeding such as this to gather and analyze information.

“Verizon and XO Communications have already provided substantial data to the FCC and we’ll continue to work together with them and other regulatory agencies to provide all requested information,” he said. “We’re confident the approval process will continue to proceed in a timely manner.”{ad}

The FCC’s information request letter included 30 main questions, such as “what additional products and services will Verizon be able to offer existing XO customers because of the transaction that are currently not offered by XO,” “what products and services will Verizon cease offering existing XO customers,” and a request for “documents sufficient to show the potential for cost savings, efficiencies, synergies, or benefits resulting from the transaction.”

Announced in February, the deal would provide Verizon with access to XO’s fiber-based IP and Ethernet networks, “helping to better serve enterprise and wholesale customers,” according to XO. In addition, the acquired fiber facilities will help Verizon continue to densify its cell network.

Separately, Verizon also will lease available XO wireless spectrum, with an option to buy that spectrum by the end of 2018.


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