FCC Seeks Comment on Verizon and XO Communications Pending Transactions

The Commission has released a Public Notice establishing the pleading cycle for a proposed transaction between XO Communications and Verizon Communications.  The parties are seeking approval to transfer control of various licenses and authorizations held by XO Communications from XO Holdings to Verizon.

If approved, XO Holdings would sell all of its interests in XO Communications to Verizon, and XO Communications, along with its operating subsidies, would become a wholly owned, indirect subsidiary of Verizon.  The applicants assert that the transfer of control will serve the public interest, convenience, and necessity and that it would allow Verizon to enhance its reach and improve its services, especially in areas outside of Verizon’s incumbent LEC footprint.  The applicants also assert that the transfer will create more than $1.5 billion in operational and economic efficiencies by eliminating certain access costs currently paid to third parties.  The applicants claim that all of this would be accomplished without harm to competition or the marketplace.

The Commission did not conduct a preliminary review of the transaction.

Comments/Petitions: May 12, 2016
Replies/Oppositions: May 27, 2016

In a separate Public Notice, the Commission seeks comment on the long-term de facto lease between Nextlink and Verizon.  Nextlink Wireless, LLC, a subsidiary of XO Holdings, agreed to lease to Cellco Partnership d/b/a Verizon, and XO Holdings also agreed to provide Verizon Wireless an option to acquire control of, certain wireless local multipoint distribution service (“LMDS”) and 39 GHz licenses held by Nextlink.

If approved, the lease agreement with give Verizon the authorization to use all of Nextlink’s LMDS and 29 GHz spectrum, except for discrete spectrum and geographic areas that are subject to existing leases to third parties or to contractual requirements to reserve spectrum for the use of third parties.  The proposed lease would terminate upon the later of: December 31, 2018, or the closing of the purchase by Verizon of the Nextlink interests.

The applicants assert that the lease is in the public interest because it will help Verizon move forward with 5G research, development, and testing.

Petitions to Deny Due: May 3, 2016
Oppositions Due: May 13, 2016
Replies Due: May 20, 2016

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