FCC Bureaus Approve Verizon Takeover of XO Without Conditions; Harms Called Minor
FCC staff approved Verizon's purchase of XO Communications without conditions in an order released Wednesday in docket 16-70. Staff found deal-related competitive harms were minor and some public-interest benefits were likely through 5G and wireless network densification. Incompas recently asked the commission to impose various wholesale conditions (see 1611140045).
"We carefully and thoroughly reviewed the record, including the substantial material submitted by the Applicants pursuant to our requests ...," said the order from the chiefs of the Wireline, Wireless and International bureaus. "We conclude that both the benefits and the harms of the Transaction are relatively limited, but that, on balance, the potential public interest benefits outweigh the potential public interest harms."
The bureaus found that Verizon's buy of XO within Verizon's incumbent telco footprint "will have a de minimis impact on competition in the provision of BDS [business data services]." They also concluded that the transaction "fails to harm BDS competition outside" Verizon's ILEC footprint. "The Transaction will not result in any transaction-specific competitive harm from the loss of XO as an independent provider of EoC [Ethernet over Copper] and other commercial services or as an alleged 'maverick' among competitive LECs," said the order.
The staff found "that the loss of XO as an independent route into Verizon’s network is unlikely to affect Verizon’s incentive or ability to impose paid-peering arrangements on interconnecting networks, edge providers, or content delivery networks (CDNs) for access to Verizon’s network," said the order. "The Transaction is unlikely to have a negative impact on competition in the market for IP transit services." They said Verizon's takeover of XO's fiber assets would likely achieve public-interest benefits by assisting in the introduction of "innovative 5G services and the densification of its wireless broadband network."