Leap asks FCC to ban Verizon-Alltel purchase

NEW YORK (Reuters) - Leap Wireless International Inc said on Monday it had asked the U.S. telecom regulator to refuse permission for the Verizon Wireless' $28.1 billion plan to buy Alltel and become the No. 1 U.S. mobile service.

Their smaller rival Leap said risks include less competition and difficulties creating roaming agreements that allow customers of one carrier to use another's services when traveling outside their home network coverage area.

Leap has roaming pacts with both Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc, and Alltel, the leading rural U.S. mobile provider for certain parts of the country.

But Laurie Itkin, Leap's government affairs director, said unless the Federal Communications Commission sets rules requiring nationwide roaming agreements, a Verizon and Alltel deal could leave Leap users without service in some places.

"It means that in some parts of the country consumers will find their phone just doesn't work," said Itkin, who is also pushing for the FCC to force operators to offer roaming for data services such as cellphone Web access.

The complaint, which was filed at the FCC on Monday, follows a promise made by Verizon Wireless last month to honor the terms of any roaming agreements Alltel has with other carriers. Verizon Wireless also said it would divest assets in 85 markets if it wins regulatory approval for the deal.

Verizon Wireless spokeswoman Nancy Stark said the company has not yet seen the complaint but would respond to any comments through the FCC, which had set August 11 as the deadline for comments.

The company announced its plan to buy Alltel in early June and has said it expects the deal to close by the end of the year. Analysts have also said they believe the acquisition will likely win regulatory approval.

(Reporting by Sinead Carew, editing by Phil Berlowitz)