FCC Bureau Seeks More Information From Verizon/XO
The FCC asked Verizon and XO Holdings for more information on their planned deal, in which Verizon would take over XO Communications and its wireline assets. "We require additional information and clarification of certain matters discussed in the applications," said…
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a Wireline Bureau letter to the companies posted Thursday in docket 16-70. The 25-page letter contained numerous and detailed instructions and queries on the applicants and their deal. For example, the bureau asked the companies to "provide all documents created by or for the Applicants (either internally or by outside providers) for the purpose of analyzing the effects of this Transaction with respect to: competition, diversity, consumer welfare, technology, cost savings, efficiencies, synergies, benefits, and profitability." It asked for much information on: the applicants' internet backbone and transit services and customers; interconnection agreements; the benefits of combining their offerings; and the full reach of their service footprints. Many of the questions focused on their business data services (BDS), a market in which the two companies compete in some areas. For instance, the bureau asked for a description of "Verizon's post-closing plans concerning XO's services provided via Ethernet over Copper." Critics are concerned Verizon/XO will undercut competition in the BDS and other markets. The bureau asked the companies to provide the information and associated documents by July 7. A Verizon spokesman said the request was part of the standard review process. “Nothing out of the ordinary and we’re glad the process continues to move forward,” he emailed. Josh Stager, policy counsel of New America's Open Technology Institute, emailed: "While some of this is due diligence, it does make clear that the FCC isn't going to rubber-stamp the merger. The Commission's requests are responsive to the concerns raised by many, including OTI, that the transaction will harm the markets for Internet transit and business data services." Phillip Berenbroick, Public Knowledge counsel-government affairs, emailed: "The nature of the questions regarding competitors and market share comports with what Public Knowledge and the other parties in the docket have consistently pointed out -- that Verizon and XO have been rather cavalier in explaining how this transaction serves the public interest and what effect the transaction will have on competition in the BDS market. We've also asserted that the competition issues raised by the Verizon/XO deal are compounded by the Verizon/Nextlink spectrum lease arrangement, and hope the Commission asks Verizon and Nextlink about those issues and considers these transactions jointly."