# Before the

# Federal Communications Commission

# Washington, D.C. 20554

In the Matter of )

)

Applications of Motorola, Inc. )

)

For Consent to Assign 800 MHz SMR Licenses )

To Nextel Communications, Inc. )

# ORDER

**Adopted: February 29, 2000 Released: March 1, 2000**

By the Deputy Chief, Wireless Telecommunications Bureau:

1.  This Order addresses a petition[^1] filed by Clarks Electronics, *et
    al.* ("Petitioners"), requesting reconsideration of the Wireless
    Telecommunications Bureau's ("Bureau") grant of Motorola Inc.'s
    ("Motorola") applications to assign certain 800 MHz Specialized
    Mobile Radio ("SMR") licenses to Nextel Communications, Inc.
    ("Nextel").[^2] For the reasons discussed below, we deny the
    Petitioners' request for reconsideration.

    **BACKGROUND**

2.  On December 9, 1994, Motorola filed applications seeking consent to
    assign to Nextel certain 800 MHz SMR licenses. The proposed
    assignment included the transfer of unconstructed authorizations.
    The Bureau sought comment on whether the proposed assignment was in
    the public interest and, after reviewing the record, concluded that
    the assignment would promote competition in the broader CMRS
    marketplace and was consistent with antitrust principles. The Bureau
    recognized that Section 90.609(b) of the Commission's rules[^3]
    precludes the transfer of unconstructed authorizations for a
    conventional or trunked radio system, but affirmed its policy that
    Section 90.609(b) does not apply to the transfer of unconstructed
    digital authorizations where the service contours of the
    unconstructed authorizations are entirely within the footprint[^4]
    of already constructed analog facilities.[^5] Motorola certified to
    the Bureau that all of its unconstructed digital station
    authorizations for which it sought assignment to Nextel were
    ancillary to its underlying constructed analog stations, and had
    service contours that fell within the footprint of its existing
    wide-area system. [^6] Accordingly, the Bureau granted Motorola's
    request to assign to Nextel its constructed SMR licenses and
    unconstructed authorizations located within its existing
    footprint.[^7]

3.  On May 30, 1995, Petitioners filed a petition for reconsideration,
    arguing that (1) Bureau staff violated the Commission's *ex parte*
    rules in seeking additional information concerning Motorola's
    unconstructed sites in a restricted proceeding; (2) Motorola, in its
    supplemental information, failed to provide the requisite
    information to justify a waiver of Section 90.609(b) of the
    Commission's rules; and (3) the Bureau relied on an incorrect
    definition of the relevant product market. Petitioners request that
    the Bureau require Motorola to provide facts to support its request
    for assignment of unconstructed authorizations, provide Petitioners
    and other parties an opportunity to review these facts, and then
    assess Motorola's request in light of the facts and relevant law.

    **DISCUSSION**

4.  We disagree with Petitioners' claim that Bureau staff violated the
    agency's *ex parte* rules. Section 1.1208 of our rules[^8] prohibits
    *ex parte* presentations, to or from Commission staff, in restricted
    proceedings, unless the presentation is exempt under Section
    1.1204(b).[^9] Pursuant to Section 1.1204(b)(7),[^10] in force at
    the time the application was filed, *ex parte* communications by the
    Commission or staff requesting information to clarify or adduce
    evidence or to resolve issues were exempt from the *ex parte*
    prohibition. The party responding to the request needed only file
    any oral or written response on the other parties to the
    proceeding.[^11] Bureau staff contacted Motorola counsel solely for
    the purpose of obtaining additional information concerning the
    construction status of the SMR facilities included in Motorola's
    assignment application.[^12] It is well settled that this type of
    inquiry fit squarely within Section 1.1204(b)(7).[^13] We therefore
    conclude that Bureau staff did not violate the agency's *ex parte*
    rules.

5.  We disagree with Petitioners that Motorola's supplemental
    information was insufficient to permit transfer of Motorola's
    unconstructed authorizations to Nextel. Petitioners allege that
    Motorola, in effect, sought a waiver of Section 90.609(b), and that
    Motorola failed to meet its burden in justifying waiver of the rule.
    It is established Bureau policy that Section 90.609(b) does not
    apply to the transfer of underlying unconstructed SMR licenses with
    service contours that do not extend beyond the footprint of the
    already constructed analog facilities.[^14] Accordingly, waiver of
    Section 90.609(b) is not required in such instances. Motorola
    certified the following to the Bureau: (1) the relevant analog SMR
    licensed facilities were constructed and operational; (2) its
    digital and analog sites were co-located; and (3) no digital SMR
    stations included in the assignment had service contours outside of
    Motorola's wide-area footprints.[^15] In addition, Motorola provided
    a copy of its request for waiver of Section 90.631(e) regarding its
    digital wide-area authorizations, wherein it explained that its
    digital stations were located only at existing SMR base stations
    used to develop Motorola's wide-area footprint.[^16] Importantly,
    neither Petitioners nor any other commenter in this proceeding have
    alleged that Motorola's unconstructed authorizations have service
    contours outside of Motorola's footprint.[^17] Based on the
    foregoing, there was sufficient evidence for the Bureau to find that
    Motorola's unconstructed digital authorizations were ancillary to
    underlying constructed analog stations, and had service contours
    wholly within the footprint of its existing analog facilities. We
    therefore affirm the Bureau's decision to grant Motorola's request
    to assign to Nextel unconstructed authorizations located within
    Motorola's existing footprint.

6\. Finally, we disagree with Petitioners\' argument that in approving
the Nextel‑Motorola transaction, the Bureau applied an incorrect
definition of the relevant product market. In the original proceeding,
several commenters argued that we should define the relevant product
market as 800 MHz SMR service.[^18] We disagreed, concluding that the
relevant product market was all terrestrial CMRS offerings, and adopted
a definition of the product market that included cellular, SMR, 220 MHz,
interconnected Business Radio Service, conventional dispatch, paging and
PCS offerings.[^19] We determined that this market definition recognized
the convergence of CMRS offerings and was consistent with the
Commission\'s analysis of the CMRS market in the *CMRS Third Report and
Order*. Since the *Motorola Order*, the Bureau has used a narrower
market definition to evaluate mergers by SMR carriers, including several
subsequent acquisitions by Nextel.[^20] However, we do not believe that
this evolution in our market analysis requires reconsideration of the
Nextel‑Motorola transaction. In the *Motorola Order*, we noted that the
Department of Justice (DOJ) had approved the transaction using a
significantly more restrictive product market definition than was used
by the Bureau, and we found that DOJ\'s analysis supported our
conclusion.[^21] Thus, we do not believe that using a narrower product
market in our own analysis would have altered the result. Therefore, we
deny the petition and affirm our prior decision.

7\. Accordingly, IT IS ORDERED that, pursuant to section 4(i) of the
Communications Act of 1934, as amended, 47 U.S.C. § 154(i), and section
1.106 of the Commission's rules, 47 C.F.R. § 1.106, the petition for
reconsideration filed by Clarks Electronics, *et al.* is DENIED.

FEDERAL COMMUICATIONS COMMISSION

James D. Schlichting

Deputy Chief

Wireless Telecommunications Bureau

[^1]: Petition for Reconsideration filed by Clarks Electronics, Teton
    Communications, Inc., Radio Service Company, Zundel's Radio, Inc.,
    Business Radio, Inc., Accu Comm, Inc., Earl's Distributing, Inc.,
    and Earl's Wireless Communication (May 30, 1995).

[^2]: In the Matter of Applications of Motorola, Inc. for Consent to
    Assign 800 MHz Licenses to Nextel Communications, Inc. 10 FCC Rcd
    7783 (1995) ("Motorola Order").

[^3]: 47 C.F.R. § 90.609(b).

[^4]: We have defined the footprint of a system as the contiguous and
    overlapping service areas of stations that are (1) constructed and
    placed in operation, and (2) currently licensed to or managed by the
    applicant. *Motorola Order*, 10 FCC Rcd at 7787.

[^5]: *Motorola Order*, 10 FCC Rcd at 7787.

[^6]: *See* Letter from Robert L. Pettit to Rosalind K. Allen, Acting
    Chief, Commercial Radio Division, Wireless Telecommunications Bureau
    (March 31, 1995) ("Pettit Letter").

[^7]: *Motorola Order*, 10 FCC Rcd at 7783, 7787.

[^8]: 47 C.F.R. §1.1208.

[^9]: 47 C.F.R. §1.1204.

[^10]: 47 C.F.R. §1.1207(b)(7) (1995). This exemption has since been
    eliminated from the Commission's rules.

[^11]: *Id.*

[^12]: The record indicates that Motorola served a copy of the Pettit
    Letter on all parties to this proceeding.

[^13]: In Re Applications of Wendell & Associates, 14 FCC Rcd 1671, ¶19
    (1998); In The Matter Of TCI Communications, Inc., 11 FCC Rcd
    14,696, ¶¶ 13-16 (1996).

[^14]: In the Matter of Applications of Nextel Communications, Inc. for
    Transfer of Control of OneComm Corporation, N.A., and C-Call Corp.,
    10 FCC Rcd 3361, 3366-3367 (1995) ("OneComm Order").

[^15]: Pettit Letter at 2, Attachment 1.

[^16]: *Id.*, Attachment 2, pp. 10-11.

[^17]: *Compare* OneComm Order, 10 FCC Rcd at 3361. OneComm sought
    consent to transfer control of certain 800 MHz SMR licenses to
    Nextel. The application included the transfer of unconstructed SMR
    licenses. Because several parties alleged that some of OneComm's
    unconstructed authorizations extended beyond OneComm's footprint, we
    conditioned our approval of the transfer on a showing by OneComm
    that the service contour for each unconstructed authorization did
    not extend beyond OneComm's existing footprint. *Id.* at 3367.

[^18]: *Motorola Order*, 10 FCC Rcd at 7785-7786.

[^19]: *Id.* at 7786.

[^20]: *See* In Re Applications of Wilmington Trust Company or Hughes
    Electronics Corporation, Assignors, and FCI 900, Inc. Assignee, For
    Consent to Assignment of 900 MHz Specialized Mobile Radio Licenses,
    DA 00-89 (Wireless Telecommunications Bureau, Jan. 14, 2000); In re
    Applications of Pittencrief Communications, Inc. and Nextel
    Communications, Inc. For Consent to Transfer Control of Pittencrief,
    13 FCC Rcd 8935 (1997) (Bureau used interconnected mobile phone and
    dispatch as the relevant product markets). Notwithstanding, our
    current product market definition is still more expansive than the
    800 MHz SMR definition.

[^21]: *Motorola Order*, 10 FCC Rcd at 7787. DOJ defined the relevant
    product market as 800 MHz, 900 MHz and 220 MHz trunked SMR services.