Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

In re Applications of )

)

GTE Corporation, ) DA 00-953,

Vodafone AirTouch Plc, and ) DA 00-1076, and

Bell Atlantic Corporation ) DA 00-1193

)

For Consent to Transfer Control of or )

Assign Properties to Divestiture Trust and )

For Temporary Waiver of the CMRS )

Spectrum Cap Rule )

# ORDER 

Adopted: June 26, 2000 Released: June 26, 2000

By the Deputy Chief, Wireless Telecommunications Bureau:

1 This Order grants 14 applications filed by Bell Atlantic Corporation
or its affiliates or subsidiaries ("Bell Atlantic"), GTE Corporation or
its affiliates or subsidiaries ("GTE"), Vodafone AirTouch Plc or its
affiliates or subsidiaries ("Vodafone"), and Joseph J. Simons, Esq.,
Trustee (collectively, "the Applicants") seeking consent to transfer
control of or assign licenses to a divestiture trust, and approves the
divestiture trust structure. In addition, this Order grants to the
current licensees a temporary waiver of the Commission's spectrum
aggregation limit.

## I. Divestiture Trust

2 On May 3 and 4, 2000, Bell Atlantic, GTE, and Vodafone filed
applications under Section 310(d) of the Communications Act, 47 U.S.C. §
310(d), seeking Commission consent to assign or transfer control of
certain cellular, PCS, and microwave licenses to a trustee selected by
the United States Department of Justice ("DOJ") and approved by the U.S.
District Court for the District of Columbia.[^1] On May 12, 2000, the
Wireless Telecommunications Bureau ("Bureau"), by delegated authority,
issued a public notice announcing that the applications had been
accepted for filing and establishing a pleading cycle to permit
interested parties an opportunity to comment on the proposed
transaction.[^2] On May 24, 2000, DOJ nominated Joseph J. Simons, Esq.
("Trustee")[^3] as the trustee, and the applications were amended to
reflect the identity of the proposed trustee. This amendment was placed
on public notice on May 30, 2000.[^4] No petitions to deny or comments
were received in response to these public notices.[^5]

3 The purpose of this divestiture trust is to facilitate the closing of
the merger between GTE and Bell Atlantic consistent with the
Commission's Merger Order, [^6] the cellular cross-ownership[^7] and
spectrum aggregation[^8] rules, and with a Revised Consent Decree among
Bell Atlantic, GTE, Vodafone, and DOJ.[^9] Closing of the merger without
certain divestitures would result in violations of the Merger Order,
these rules, and the Revised Consent Decree. Specifically, pursuant to
the Commission's cellular cross-ownership rule, the Merger Order, and
the Revised Consent Decree, the current licensees must eliminate all
cellular-cellular overlaps prior to consummating the Bell Atlantic - GTE
merger.[^10] Of the 19 cellular-cellular overlaps created by the
combination of Bell Atlantic's, Vodafone's, and GTE's U.S. wireless
properties that require divestiture, six have already been cured through
a sale to ALLTEL, and the Commission has already approved the sale to
ALLTEL of another seven cellular properties.[^11] The remaining six
cellular-cellular overlaps are covered by the trust applications
addressed in this Order; the current licensees request consent to cure
the six remaining cellular-cellular overlaps (five in the San Francisco
area and one in San Diego) by placing the properties in a divestiture
trust pending divestiture to third parties.[^12]

4 Closing of the merger also implicates the Commission's spectrum
aggregation limit. This rule requires that, before closing the
transaction that would cause a violation of the rule, the parties file
applications to divest sufficient spectrum in each PCS-cellular overlap
area to remain in compliance with the rule.[^13] The Bell Atlantic --
GTE merger would create impermissible overlaps between 11 PCS MTAs and
77 cellular service areas.[^14] In three MTAs, the parties have already
obtained approval to resolve overlaps by selling additional cellular
properties to ALLTEL.[^15] The overlaps created in the remaining eight
MTAs are addressed by the trust applications.[^16] In each of these
MTAs, the Applicants request authority to place 20 MHz of PCS spectrum
license into the divestiture trust.[^17]

5 The current licensees may be in a position to file sufficient
divestiture applications with the Commission, before closing the merger,
to avoid putting properties in these markets into the divestiture trust.
Because it remains unclear, however, whether the Applicants will be able
to do so, they have also sought consent to place one property in each
PCS-cellular overlap market into trust.[^18] The amount of time that the
Applicants will have to file applications to divest to third parties is
addressed below in section II.

6 Section 20.6 of the Commission's rules, which addresses the spectrum
aggregation limit, also addresses the use of divestiture trusts. The
rule provides that divestiture to a trust is permitted "as long as the
applicant has no interest in or control of the trustee, and the trustee
may dispose of the license as it sees fit."[^19] We have reviewed the
proposed Trust Agreement as attached hereto in Exhibit A and find that
it comports with the Commission's rules. We are satisfied that the
Trustee will be independent, that he will be able to dispose of the

properties as he sees fit, and that communication between the Trustee
and the Applicants will be limited to communications initiated by the
Trustee seeking information needed to operate the businesses and divest
the licenses.[^20]

7 Therefore, we determine that a grant of the applications to divest to
a trust is in the public interest. Because these divestitures are
required by competitive concerns, however, we do not believe that the
Applicants should be permitted to continue to hold the properties for
180 additional days, as would otherwise be permitted under the
Commission's rule regarding time for consummation.[^21] Instead, we
permit the Applicants 60 days to consummate transactions to place
properties in trust.

8 Furthermore, the Commission's rules require that a divestiture trust
be of no more than six months' duration, and that any license that is
not transferred from the trust within that period will be
cancelled.[^22] These applications are therefore granted on the
condition that any cellular or PCS license that is transferred to the
trust and that is not further transferred from the trust to an ultimate
buyer within 180 days thereafter will be automatically cancelled.

## II. Spectrum Cap Waiver

9 On April 6, 2000, the Applicants requested a 90-day waiver of the
spectrum aggregation rule with respect to certain of the PCS-cellular
overlaps.[^23] On May 2, 2000, the Bureau placed the request on public
notice.[^24] Two parties commented in support of the waiver;[^25] no
parties opposed granting the waiver. In an *ex parte* letter filed May
26, 2000 to support their request, the Applicants state that this is the
largest set of divestitures ever required either under the Commission's
rules or by DOJ, and that the size and complexity of these divestitures
exceeds that of recent mergers with respect to which similar waivers
were granted.[^26]

10 Further, Bell Atlantic, GTE, and Vodafone state that the divestiture
process established by the Revised Consent Decree is explicitly designed
to preserve and promote competition both before and after
divestiture.[^27] They note that the Revised Consent Decree provides
that

> \[u\]ntil accomplishment of the divestitures. . . \[the Applicants\]
> shall take all steps necessary to ensure that each of the wireless
> businesses that it owns or operates in \[overlap\] markets shall
> continue to be operated as a separate, independent, ongoing,
> economically viable and active competitor to the other mobile wireless
> telecommunications providers operating in the same license area . . .
> .[^28]

Further, each of the companies must assign complete managerial
responsibility over each wireless business in overlap markets to a
specified manager who shall not participate in the operation of that
company's other wireless businesses[^29] and must appoint a person to
oversee compliance with the reporting and "hold separate" provisions of
the Revised Consent Decree.[^30]

11 The companies state further that the Revised Consent Decree adds
considerable complexity to the divestiture process, resulting in a need
for greater time to accomplish the necessary divestitures. To ensure
that the buyers of the divested spectrum have the capacity to compete
vigorously, DOJ has sole discretion to approve the buyers, and no
transactions may proceed without DOJ's affirmative approval.[^31] The
parties were required to hire investment advisors, prepare detailed
offering memoranda, and circulate the memoranda widely among investment
companies, existing wireless providers, small business entities, and
others.[^32] The parties are also required to maintain a due diligence
facility for prospective buyers and to report to DOJ every 30 days on
the status of negotiations to sell properties, including identifying all
potential buyers contacted.[^33]

12 We believe that the complex circumstances of this case warrant a
temporary waiver of the spectrum aggregation rule. The parties began the
divestiture process several months ago, culminating to date in sales
(some consummated and some yet to be consummated) to ALLTEL and
contracts to sell to AT&T, and, in the Richmond MTA, CFW Communications,
Inc. Active negotiations are well underway in other markets, and in some
cases, the parties have narrowed the field of potential buyers to one.
In addition to the complexities of selling such a great number of
properties in a coordinated effort, the divestiture procedures
established by the Revised Consent Decree impose a longer timeline on
these parties to accomplish divestiture transactions than would be the
case in most other circumstances. Further, the hold-separate order and
reporting requirements contained in the Revised Consent Decree help to
alleviate competitive concerns that might be raised by granting the
Applicants limited additional time to comply with the Commission's
spectrum aggregation rule. In addition, the proposed merger would
promote competition by furthering the development of a major nationwide
wireless system. We therefore find that the public interest will be
served by providing limited additional time to effect these
divestitures. The parties are therefore required to come into compliance
with the spectrum aggregation rule within 90 days following the closing
of the Bell Atlantic -- GTE merger.

**III. Ordering Clauses**

13 Accordingly, IT IS ORDERED that, pursuant to sections 4(i) and 310(d)
of the Communications Act of 1934, as amended, 47 U.S.C.§§ 154(i),
310(d), and section 0.331 of the Commission's rules, 47 C.F.R. § 0.331,
the applications filed by Bell Atlantic Corporation, GTE Corporation,
Vodafone AirTouch Plc, and Joseph J. Simons, Esq., Trustee, for consent
to assign or transfer control of certain cellular, PCS, and microwave
licenses to Joseph J. Simons, Esq., Trustee, ARE GRANTED, subject to
Commission approval of any subsequent revisions to the final Trust
Agreement.

14 IT IS FURTHER ORDERED that, pursuant to sections 4(i) and 310(d) of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 310(d),
and section 0.331 of the Commission's rules, 47 C.F.R. § 0.331, the
Applicants are required to consummate the authority granted herein
within 60 days of the date of this Order.

15 IT IS FURTHER ORDERED that, pursuant to sections 4(i) and 310(d) of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 310(d),
and section 0.331 of the Commission's rules, 47 C.F.R. § 0.331, the
cellular or PCS licenses that are put into the divestiture trust will
automatically cancel if not divested to a third party within 180 days of
transfer or assignment to the trust.

16 IT IS FURTHER ORDERED that, pursuant to sections 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i) and sections
0.331 and 1.925 of the Commission's Rules, 47 C.F.R. §§ 0.331 and 1.925,
the Petition for Waiver of CMRS Spectrum Cap Rule, codified in section
20.6 of the Commission's rules, filed on April 6, 2000, by Bell Atlantic
Corporation, GTE Corporation, and Vodafone AirTouch Plc, IS GRANTED for
a period not to exceed 90 days with respect to PCS-cellular overlaps in
the Chicago, Dallas-Fort Worth, Houston, San Antonio, Richmond-Norfolk,
Cincinnati, Seattle, and Spokane MTAs.

FEDERAL COMMUNICATIONS COMMISSION

James D. Schlichting, Deputy Chief

Wireless Telecommunications Bureau

[^1]: The Applicants also filed applications for the transfer of
    international 214 authority to the trustee and for blanket authority
    for the trustee. *See* In the Matter of Joseph J. Simons, Trustee,
    File No. ITC-214-20000531-00321, Application for Global Blanket
    Authority Pursuant to Section 214 of the Communications Act of 1934,
    as Amended, to Offer Resale Services as an International Carrier
    (filed May 31, 2000); *see also*, In the Matter of Joseph J. Simons,
    Trustee, File No. ITC-214-20000531-00321, Letter from Nancy J.
    Victory to Magalie Roman Salas (filed June 16, 2000) (clarifying
    that the initial application should be treated as an application to
    transfer control of the international section 214 authority
    currently held by certain cellular and PCS licensee to Joseph J.
    Simons, Trustee). On June 23, 2000, the International Bureau granted
    these applications. *See In the Matter of Joseph J. Simons,
    Trustee*, File No. ITC-214-20000531-00321, DA 00-1408, International
    Telecommunications Certificate (IB, rel. June 23, 2000).

[^2]: *See Bell Atlantic, GTE and Vodafone Seek Consent to Transfer
    Control of or Assign Properties to Divestiture Trust*, Public
    Notice, DA 00-1076 (rel. May 12, 2000) (Lead Application File No.
    0000123023).

[^3]: The District Court approved the nomination on June 16, 2000. *See*
    *United States of America v. Bell Atlantic, GTE Corporation, and
    Vodafone AirTouch Plc*., Civ. No. 1:99CV01119(EGS), Order on Motion
    of the United States for the Appointment of a Trustee, filed June
    16, 2000.

[^4]: *See Bell Atlantic, GTE, and Vodafone File Amendment to Trust
    Applications to Name Trustee*, Public Notice, DA 00-1193 (rel. May
    30, 2000).

[^5]: The Applicants have recently amended certain of the trust
    applications to reflect a corporate restructuring of certain of
    GTE's license holdings. In some cases, the amendment reflects that
    GTE has undertaken a corporate restructuring by assigning current
    licenses to a different GTE subsidiary, resulting in a new assignor
    for certain of the trust applications. In other cases, the amendment
    reflects an alternative GTE corporate structure that may be in place
    at the time that the Trustee obtains properties. Accordingly, the
    form of the divestiture transactions as originally outlined in the
    May 12 Public Notice has changed or may change. Because the
    underlying changes in corporate structure are *pro forma* in nature,
    we accept the amendments and consent to the transactions both as
    originally filed and as proposed, as appropriate in each market,
    without the need for additional public notice.

[^6]: *See Application of GTE Corporation and Bell Atlantic
    Corporation*, Memorandum Opinion and Order, CC Docket No. 98-184,
    FCC 00-221 (rel. June 16, 2000) ("Merger Order").

[^7]: 47 C.F.R. § 22.942.

[^8]: 47 C.F.R. § 20.6.

[^9]: *U.S. v. Bell Atlantic Corp., et al.*, Final Judgment, Civ. No.
    1:99CV01119 (LFO) (D.D.C. Apr. 18, 2000) ("Revised Consent Decree").

[^10]: 47 C.F.R. § 22.942(a).

[^11]: *See* Merger Order, FCC 00-221, at para. 386 (citing *Wireless
    Telecommunications Bureau Grants Consent to Bell Atlantic and GTE
    for Assignment and Transfer of Control of Certain Cellular,
    Microwave and Telephone Maintenance Radio Service Licenses to
    ALLTEL*, Public Notice, DA 00-1273 (rel. June 12, 2000)).

[^12]: We note that, last week, the current licensees announced that
    they intend to sell cellular properties in the six remaining
    cellular-cellular overlap areas to AT&T, along with a PCS property
    in Houston. *See* "AT&T to Buy Wireless Phone Systems in Three U.S.
    Cities for \$3.3 Billion," June 19, 2000, available at
    [www.bloomberg.com/bbn/techtop](http://www.bloomberg.com/bbn/techtop).
    Because the sale to AT&T cannot be concluded before the anticipated
    closing of the Bell Atlantic -- GTE merger, the Applicants have not
    withdrawn the applications that request authority to place in the
    divestiture trust the properties involved in the prospective AT&T
    transaction.

[^13]: 47 C.F.R. § 20.6(e)(4)(A). We note that the Revised Consent
    Decree requires the parties to close *all* divestiture transactions
    prior to closing the Bell Atlantic -- GTE merger, but provides for
    two 30-day extensions in the case of PCS-cellular overlaps.

[^14]: In two additional MTAs \-- Jacksonville and Milwaukee \-- the
    overlaps created between the Verizon PCS license and GTE cellular
    interests do not trigger the spectrum aggregation rule because the
    cellular interests are minority and non-controlling.

[^15]: *See* Merger Order, FCC 00-221, at para. 386 (citing *Wireless
    Telecommunications Bureau Grants Consent to Bell Atlantic and GTE
    for Assignment and Transfer of Control of Certain Cellular,
    Microwave and Telephone Maintenance Radio Service Licenses to
    ALLTEL*, Public Notice, DA 00-1273 (rel. June 12, 2000)).

[^16]: The eight MTAs are: Chicago, Dallas-Forth Worth, Houston, San
    Antonio, Richmond-Norfolk, Cincinnati, Seattle, and Spokane. The
    only overlap market currently not covered by an application to
    divest either to a third party or to the Trustee is the overlap
    created by the San Antonio PCS MTA and the San Antonio cellular MSA.
    The current licensees state that GTE's interest in the San Antonio
    MSA license is a 30-percent limited partnership interest. Therefore,
    prior Commission approval to transfer control of or assign the
    interest is not required (assuming that the transfer of the interest
    does not otherwise effect a transfer of control in the license based
    on the remaining interests). Because the interest is greater than 20
    percent, however, it is attributable for purposes of the spectrum
    aggregation limit and is included in the request for a spectrum cap
    waiver, discussed below.

[^17]: The licenses are currently 30 MHz, except in Seattle, which is
    currently 20 Mhz. Therefore, the merged entity will acquire 10 MHz
    of PCS spectrum in each of these MTAs, except in Seattle, where it
    will not acquire any PCS spectrum.

[^18]: As discussed above, *supra* note 16, the overlap created in the
    San Antonio MSA is not included in the trust applications.

[^19]: 47 C.F.R. § 20.6(e)(4)(A).

[^20]: We understand that DOJ may not have completed its review of the
    Trust Agreement. To the extent that any changes are made to the
    Trust Agreement, we will need to review the Trust Agreement again.
    Grant of the applications referenced herein is conditioned on
    Commission approval of any revisions to the Trust Agreement.

[^21]: *See* 47 C.F.R. § 1.948(d). As mentioned above, the cellular
    cross-ownership rule requires that transactions to divest in
    cellular-cellular overlap areas be consummated before consummation
    of the Bell Atlantic -- GTE merger.

[^22]: *See In the Matter of 1998 Biennial Review Spectrum Aggregation
    Limits for Wireless Telecommunications Carriers, etc.,* WT Docket
    Nos. 98-205 and 96-59, GN Dkt. No. 93-252, Report and Order, FCC
    99-244, 1999 WL 734848 at para. 117 & n.263.

[^23]: Petition for Temporary Waiver of CMRS Spectrum Cap Rule, filed
    April 6, 2000, by Vodafone AirTouch Plc, Bell Atlantic Corporation,
    and GTE Corporation, at Attachment 1 ("Waiver Request").

[^24]: *See Wireless Telecommunications Bureau Seeks Comment on Vodafone
    AirTouch Plc, Bell Atlantic Corporation, and GTE Corporation Request
    for Temporary Waiver of Section 20.6 of the Commission's Rules*,
    Public Notice, DA 00-953 (rel. May 2, 2000).

[^25]: *See* Comments of SBC Communications Inc. in Support of Petition
    for Temporary Waiver of CMRS Spectrum Cap Rule, filed May 9, 2000;
    Comments of BellSouth Corporation in Support of Request for
    Temporary Divestiture Waiver, filed May 9, 2000.

[^26]: Letter to Magalie Roman Salas, Secretary, Federal Communications
    Commission, from Kenneth D. Patrich, Esq. Wilkinson Barker Knauer
    LLP, dated May 26, 2000, at 3 ("*May 26 Ex Parte Letter*") (citing
    *Applications of VoiceStream Wireless Holding Corporation or
    Omnipoint Corporation*, Memorandum Opinion and Order, 15 FCC Rcd
    3341 (2000) (*Errata*, 15 FCC Rcd 4722) and *Applications of*
    *VoiceStream Wireless Holding Corporation*, Memorandum Opinion and
    Order, WT Dkt. No. 00-3, DA 00-730 (WTB/IB rel. Mar. 31, 2000) at ¶
    38).

[^27]: *May 26^th^ Ex Parte Letter* at 3.

[^28]: Revised Consent Decree at Section IX.A.

[^29]: *May 26^th^ Ex Parte Letter* at 2; *see also* Revised Consent
    Decree at Section IX.C.

[^30]: *May 26^th^ Ex Parte Letter* at 2; *see also* Revised Consent
    Decree at Section IX.D.

[^31]: *May 26^th^ Ex Parte Letter* at 2; *see also* Revised Consent
    Decree at Section IX.D.

[^32]: *May 26^th^ Ex Parte Letter* at 3; *see also* Revised Consent
    Decree at Section IX.D.

[^33]: *May 26^th^ Ex Parte Letter* at 3; *see also* Revised Consent
    Decree at Section IX.D.