Before the

Federal Communications Commission

Washington, D.C. 20554

In re Applications of )

)

TeleCorp PCS, Inc., Tritel, Inc., and )

Indus, Inc. )

)

and ) WT Docket No. 00-130

) DA 00-1589

TeleCorp Holding Corp. II, L.L.C., )

TeleCorp PCS, L.L.C., ABC Wireless, L.L.C., )

PolyCell Communications, Inc., Clinton )

Communications, Inc., and AT&T Wireless )

PCS, LLC )

)

For Consent to Transfer of Control and )

Assignment of Licenses and Authorizations )

)

and )

)

Royal Wireless, L.L.C. and Zuma PCS, L.L.C. )

) File Nos. 0000163408

For Consent to Transfer of Control ) 0000163410

Licenses and Authorizations ) WTB Report No. 578

)

and )

)

Southwest Wireless, L.L.C., Poka Lambro ) File Nos. 0000177844

Ventures, Inc., Poka Lambro PCS, Inc., ) 0000178897

Poka Lambro/PVT Wireless, L.P., and Denton ) 0000179413

County Electric Cooperative, Inc. ) 0000178796

) WTB Report No. 578

For Consent to Assignment of Licenses )

And Authorizations )

**MEMORANDUM OPINION AND ORDER**

Adopted: October 27, 2000 Released: November 3, 2000

By the Chief, Wireless Telecommunications Bureau:

Table of Contents

Paragraph

I. INTRODUCTION 1

II\. BACKGROUND [3](#ii.-background)

A. TeleCorp and Tritel [3](#telecorp-and-tritel)

B. Royal and Southwest 8

II\. Discussion 11

A. Statutory Authority 11

B. Qualifications and Eligibility 13

1\. Eligibility of Commonly Controlled Affiliates 19

2\. Permissible Growth 24

3\. Qualifying Investors' Equity Requirements 30

4\. Unjust Enrichment 42

a\. TeleCorp's Licenses 43

b\. Other C Block Licenses 44

c\. Other F Block Licenses 45

d\. Section 1.2111(a) Disclosure Requirements 51

5\. Reversionary interest 54

C. Public Interest Analysis 58

1\. Competitive Framework 59

2\. Analysis of Potential Adverse Effects 59

a\. Domestic Mobile Voice Telephone Services 60

i\. Overlapping Interests 61

ii\. Spectrum Cap Issues 63

3\. Public Interest Benefits 66

III\. CONCLUSION 68

IV\. Ordering clauses 69

APPENDIX A -- Parties Filing Comments

#  INTRODUCTION

1 In this Order, we grant the applications underlying the proposed
merger of TeleCorp PCS, Inc. ("TeleCorp"), Tritel, Inc. ("Tritel"), and
Indus, Inc. ("Indus"), as well as a number of related applications
involving affiliates of TeleCorp, affiliates of PolyCell Communications,
Inc. ("PolyCell"), and/or AT&T Wireless PCS, LLC ("AT&T Wireless").
Specifically, in connection with the proposed merger, we grant: (1) the
applications filed by TeleCorp, Tritel, and Indus for consent to
transfer control of, or assign, various broadband Personal
Communications Services ("PCS") and Local Multipoint Distribution
Service ("LMDS") licenses from Tritel or Indus to TeleCorp; and (2)
applications to assign various PCS licenses in a series of license swaps
between affiliates of TeleCorp, affiliates of PolyCell, and/or AT&T
Wireless. We deny the petition to deny filed by Nextel Communications,
Inc. ("Nextel") with respect to the applications underlying the proposed
merger of TeleCorp, Tritel, and Indus. Further, we deny TeleCorp and
Tritel's request for waiver of the unjust enrichment payment owed in
connection with TeleCorp's acquisition of Tritel's licenses.

2 We also grant herein the following related applications, each of which
involves a proposed license acquisition by a TeleCorp affiliate: (1) the
transfer of control of various PCS licenses of Zuma PCS, L.L.C. ("Zuma")
to Royal Wireless, L.L.C. ("Royal"), a TeleCorp affiliate; and (2) the
assignment of various PCS authorizations from Poka Lambro Ventures,
Inc., Poka Lambro PCS, Inc., Poka Lambro/PVT Wireless, L.P.
(collectively, "Poka Lambro"), and Denton County Electric Cooperative,
Inc. ("Denton County") to Southwest Wireless, L.L.C. ("Southwest"),
another TeleCorp affiliate. We deny petitions to deny these transfer and
assignment applications filed by Leaco Rural Telephone Cooperative, Inc.
("Leaco") and Comanche County Telephone Company, Inc. ("Comanche
County").

# II. BACKGROUND {#ii.-background .unnumbered}

## TeleCorp and Tritel

3 TeleCorp, a publicly traded Delaware corporation headquartered in
Arlington, Virginia, indirectly holds A, B, C, D, E, and F block PCS
licenses, LMDS licenses, and common carrier point-to-point microwave
licenses. TeleCorp is controlled by Gerald Vento and Thomas
Sullivan.[^1] Through wholly-owned subsidiaries, TeleCorp holds a number
of entrepreneurs' block licenses (C and F block PCS licenses). TeleCorp
has designed its corporate structure so that the entrepreneurs' block
licenses are held through a different wholly-owned subsidiary of the
parent public company than the A, B, D, and E block PCS licenses.[^2]
The qualifying investors for purposes of the entrepreneur's block rules
governing eligibility for the C and F block PCS licenses are several
individuals (most notably, Messrs. Vento and Sullivan) who,
collectively: (1) hold 50.1 percent of the voting rights in the parent
company; (2) hold 11.8 percent of the total number of shares issued by
the parent; and (3) control the board of directors.[^3] Two of
TeleCorp's classes of stock, however, are tracked to the assets of the
subsidiary holding entrepreneurs' block licenses. The qualifying
investors hold just over fifteen percent of the tracking shares in the
entrepreneurs' block licensee subsidiary.

4 Tritel, a publicly traded Delaware corporation headquartered in
Jackson, Mississippi, currently holds, through its subsidiaries, A, B,
C, and F block PCS licenses. Tritel holds licenses to provide PCS to
approximately fourteen million people in the south-central United
States.[^4] William M. Mounger, II and E.B. Martin, Jr. together hold
shares that constitute a majority of the total voting power of Tritel
capital stock.[^5] Both TeleCorp and Tritel offer service using the AT&T
Wireless brand name, marketing as a "Member, AT&T Wireless Services
Network."[^6]

5 On May 9, 2000, pursuant to section 310(d) of the Communications Act
of 1934, as amended ("the Act"),[^7] TeleCorp, Tritel, and Indus filed
applications for (1) the *pro forma* transfer of control or assignment
of TeleCorp's C and F block PCS and LMDS licenses to newly formed
subsidiaries of a new TeleCorp parent holding corporation that will
assume the name TeleCorp PCS, Inc. ("TPI"); (2) the transfer of control
of authorizations currently held by Tritel subsidiaries to TPI; and (3)
the assignment of the one broadband PCS licenses of Indus to Wisconsin
Acquisition Corp. ("Wisconsin Acquisition"), an indirect subsidiary of
TPI.[^8] In addition, as part of the same transaction, TeleCorp
affiliates, PolyCell affiliates, and AT&T Wireless filed applications
for the cross-assignments involved in various license swaps.

6 The essence of the merger is that, in simultaneous transactions,
TeleCorp and Tritel stockholders will become stockholders in the new
parent holding company, TPI, through the exchange of their current
capital stock for stock in TPI.[^9] Thus, both TeleCorp and Tritel will
become wholly-owned subsidiaries of TPI. Simultaneous to these
conversions, TPI will assume the TeleCorp name and trading symbol, and
TeleCorp will be renamed TeleCorp Wireless, Inc ("TWI").[^10] The
proposed merger will effect a transfer of control of Tritel from Messrs.
Mounger and Martin, the controlling shareholders of Tritel, to Messrs.
Vento and Sullivan, the controlling shareholders of TeleCorp.[^11]

7 On July 17, 2000, by delegated authority, the Wireless
Telecommunications Bureau (the "Bureau") issued a Public Notice to
announce that all of the applications had been accepted for filing and
to establish a pleading cycle to enable interested parties to comment on
the applications involved in the TeleCorp/Tritel merger and the license
swaps.[^12] In response to the *Acceptance Public Notice*, Nextel filed
a petition to deny the applications, raising questions regarding
TeleCorp's current eligibility to hold C and F block PCS licenses and
its eligibility to acquire additional C and F block licenses.[^13] Leaco
and Comanche jointly filed reply comments supporting the concerns raised
by Nextel about TeleCorp's eligibility and incorporating arguments they
had raised in petitions to deny pending applications of other TeleCorp
affiliates \-- Royal and Southwest -- to acquire additional
entrepreneurs' block licenses.[^14] Alpine PCS, Inc. ("Alpine") also
filed reply comments supporting Nextel.[^15]

## Royal and Southwest

8 Royal and Southwest are limited liability companies organized under
the laws of Delaware. Royal and Southwest are owned and controlled by
Messrs. Vento and Sullivan, with each holding fifty percent of the
voting rights and equity interest of each company.[^16] Royal and
Southwest currently hold no C or F block PCS licenses.

9 On June 15, 2000, Royal and Zuma filed applications for the transfer
of control to Royal of two C block licenses currently controlled by
Zuma.[^17] On June 30, 2000, Southwest and Poka Lambro filed
applications for the assignment to Southwest of nine F block and seven C
block PCS licenses of Poka Lambro, and Southwest and Denton County filed
an application for the assignment to Southwest of two C block PCS
licenses held by Denton County.[^18] All six applications involving
Royal and Southwest appeared on public notice as accepted for filing on
July 5, 2000.[^19]

10 In response to the *July 5^th^ Public Notice*, Leaco and Comanche
jointly filed petitions to deny the applications for transfer of control
to Royal and the applications for assignment to Southwest.[^20] Leaco
and Comanche County argue generally that Royal and Southwest are not
eligible to acquire C and F block PCS licenses pursuant to section
24.839 of the Commission's rules,[^21] and that Poka Lambro has retained
a reversionary interest in the licenses proposed to be assigned to
Southwest in violation of the Act.

#  Discussion

## Statutory Authority

11 Section 310(d) of the Act provides, in pertinent part, that "\[n\]o
construction permit, or station license, or any rights thereunder, shall
be transferred, assigned, or disposed of in any manner, voluntarily or
involuntarily, directly or indirectly, or by transfer of control of any
corporation holding such permit or license, to any person except upon
application to the Commission and upon finding by the Commission that
the public interest, convenience, and necessity will be served
thereby."[^22] Section 310(d) also requires the Commission to consider a
license transfer of control or assignment application as if it were
filed pursuant to section 308 of the Act, which governs applications for
new facilities and for renewal of existing licenses.[^23]

12 In applying the public interest test under section 310(d), the
Commission considers four overriding questions: (1) whether the
transaction would result in a violation of the Act or any other
applicable statutory provision; (2) whether the transaction would result
in a violation of Commission rules; (3) whether the transaction would
substantially frustrate or impair the Commission\'s implementation or
enforcement of the Act or interfere with the objectives of that and
other statutes; and (4) whether the transaction promises to yield
affirmative public interest benefits.[^24] In summary, the applicants
bear the burden of demonstrating that the transaction will not violate
or interfere with the objectives of the Act or Commission rules, and
that the predominant effect of the transaction will be to advance the
public interest.[^25] Prior to approving the applications, we must
determine whether the applicants have met this burden.[^26]

## Qualifications and Eligibility

13 In evaluating assignment and transfer applications under section
310(d) of the Act, we do not re-evaluate the qualifications of assignors
and transferors unless issues related to basic qualifications have been
designated for hearing by the Commission or have been sufficiently
raised in petitions to warrant the designation of a hearing.[^27] In the
TeleCorp/Tritel transaction, no issues were raised with respect to the
basic qualifications of Tritel as transferor or assignor. Also, no
issues have been raised with respect to Indus as assignor. With regard
to the intermediate *pro forma* assignments and transfers of control of
the TeleCorp licenses, Nextel has raised concerns regarding TeleCorp's
qualifications as assignor/transferor. Specifically, Nextel claims that
TeleCorp's current use of tracking stock to comply with control group
ownership requirements violates the Commission's rules, calling into
question TeleCorp's eligibility to hold C and F block PCS licenses.[^28]
No issues have been raised as to the basic qualifications of Zuma, Poka
Lambro, or Denton County as assignors/transferors.

14 As a regular part of our public interest analysis, we also determine
whether the proposed assignee or transferee is qualified to hold
Commission licenses.[^29] In addition, because the instant applications
propose the assignment and/or transfer of control of C and F block PCS
licenses, we must determine whether the proposed assignee or transferee
meets the eligibility criteria under the Commission's rules.[^30] In
addressing the various applications before us, Nextel, Leaco, and
Comanche County argue that neither TeleCorp nor TPI, the post-merger
parent, is a qualified assignee/transferee.

15 With respect to the TeleCorp/Tritel transaction, Nextel raises the
only concerns about TPI's qualifications, all of which relate to TPI's
eligibility to acquire C and F block PCS licenses. Specifically, Nextel
argues that: (1) a discrepancy exists between TeleCorp's reporting of
assets to the Commission and to the SEC;[^31] (2) TeleCorp's current and
proposed use of tracking stock does not comply with control group
ownership structure requirements;[^32] (3) based upon Nextel's review of
the Merger Agreement,[^33] the proposed intermediate assignments and
transfers of TeleCorp's licenses to TPI are not, in fact, *pro
forma*;[^34] (4) TeleCorp does not explain TPI's eligibility to hold the
C and F block PCS licenses at issue;[^35] and (5) based on TeleCorp's
current revenues, the transfers of control would require unjust
enrichment payments.[^36]

16 Leaco and Comanche County have raised similar issues with regard to
the eligibility of Royal and Southwest, each of which based its
eligibility on the underlying eligibility of TeleCorp, to hold C and F
block PCS licenses. Leaco and Comanche County argue that the Zuma, Poka
Lambro, and Denton County applications should be denied because: (1)
neither Royal nor Southwest meets the eligibility criteria of section
24.709 of the Commission's rules as of the filing of the assignment
applications;[^37] (2) neither Royal nor Southwest holds other C or F
block licenses or falls within the grandfather provision of section
24.839(a)(2) of the Commission's rules;[^38] (3) the assignment
agreement gives Poka Lambro a prohibited reversionary interest in the
license;[^39] and (4) the Zuma to Royal and the Denton County to
Southwest assignment applications fail to satisfy the disclosure
requirements of section 1.2111(a) of the Commission's rules.[^40]

17 Because the claims of Nextel and Leaco and Comanche County ultimately
require a determination of TeleCorp's and TPI's eligibility to hold and
acquire C and F block licenses, we address their concerns jointly in the
sections below. We address four basic issues: (1) eligibility of
commonly controlled affiliates of TeleCorp to acquire and hold C and F
block PCS licenses; (2) TeleCorp's "permissible growth" under section
24.709(a)(3); (3) TeleCorp's current and proposed use of tracking stock
to comply with the control group ownership structure requirements of
section 24.709(b)(5); and (4) whether unjust enrichment payments are
required for the instant transactions. In addition, we discuss
separately below the argument of Leaco and Comanche County that
Southwest and Poka Lambro have created a prohibited reversionary
interest.

18 We note that TeleCorp, Tritel, and PolyCell challenge the standing of
Nextel and, to the extent their filings are considered petitions to deny
in the TeleCorp/Tritel transaction, also of Leaco and Comanche.[^41]
Similarly, Royal and Southwest have challenged the standing of Leaco and
Comanche County with respect to the Zuma, Poka Lambro, and Denton County
applications.[^42] We need not address these procedural arguments
because we have determined that the public interest would be served by
grant of these applications.

### Eligibility of Commonly Controlled Affiliates

19 Leaco and Comanche County argue, first, that Royal and Southwest are
not eligible to acquire the C and F block licenses at issue pursuant to
section 24.709 of the Commission's rules,[^43] because the attributable
assets of Royal and Southwest at the time of the filing of the
applications for transfer of control or assignment were in excess of
\$500 million.[^44] Second, Leaco and Comanche County argue that Royal
and Southwest are not qualified assignees/transferees because they do
not currently hold (and have never held) other C or F block
licenses.[^45] They argue that section 24.839(a)(2) should be
interpreted strictly so as to limit eligibility only to current C or F
block licensee entities, and that neither section 24.839(a)(2) nor
Commission precedent permits new entities that do not independently
qualify at the time of filing the application to acquire C or F block
PCS licenses."[^46]

20 In response, Royal, Southwest, TPI, and Wisconsin Acquisition (the
TeleCorp affiliates that will acquire licenses or control of licenses in
these transactions) claim that they are eligible to acquire the C and F
block licenses at issue under section 24.839 of the Commission's rules,
because they are affiliated with entities that are qualified holders of
C and F block PCS licenses. [^47] Further, these TeleCorp affiliates
argue that they are also controlled by Messrs. Vento and Sullivan, and
that, because *pro forma* assignments and transfers of C and F block
licenses are permitted by section 24.839(a)(5) of the Commission's
rules, they would be eligible to acquire these licenses from TeleCorp on
a *pro forma* basis.[^48] Therefore, they should be eligible to acquire
them outright.[^49] They explain that Messrs. Vento and Sullivan could
use one of their existing C and F block licensee entities to acquire the
licenses at issue, and pursuant to section 24.839(a)(5), could *pro
forma* assign or transfer control of these licenses to Royal, Southwest,
TPI, or Wisconsin Acquisition.[^50]

21 Section 24.839(a) of the Commission's rules prohibits the assignment
or transfer of control of C or F block PCS licenses within the first
five years after initial licensing, except pursuant to one of the
specific exceptions set forth in the rule. The exception stated in
Section 24.839(a)(2) permits the assignment or transfer of C and F block
PCS licenses to an entity that either (1) is eligible at the time it
files the assignment or transfer application or (2) holds other C or F
block PCS licenses and was eligible when it acquired those
licenses.[^51] We find that section 24.839(a)(2) permits assignments and
transfers of control of C and F block licenses directly to commonly
controlled affiliates of existing C and F block licensees, provided that
those licensees remain eligible pursuant to section 24.709. We believe
Leaco and Comanche County read section 24.839(a)(2) too narrowly,
emphasizing form over substance. Here, the real parties-in-interest to
the proposed assignments and transfers of control are the same --
Messrs. Vento and Sullivan.

22 In these circumstances, we see no reason to prohibit these entities
from acquiring directly licenses that they could acquire indirectly.
Section 24.839 permits *pro forma* assignments and transfers, which
means that Messrs. Vento and Sullivan could, in compliance with the
Commission's rules, achieve the very thing that Leaco and Comanche
County argue against by acquiring these licenses through TeleCorp and
assigning them on a *pro forma* basis to Royal, Southwest, or another
entity they control. We agree with Royal, Southwest, TeleCorp, and
Wisconsin Acquisition that the distinction Leaco and Comanche County try
to draw in section 24.839(a)(2) would create a result with no regulatory
benefit.[^52]

23 We also reject Leaco and Comanche County's suggestions that limiting
the scope of section 24.839(a)(2) to actual licensees, rather than
affiliates, would serve the regulatory purpose of providing the
Commission a superior opportunity to review an assignee's or
transferee's eligibility.[^53] We believe our interpretation of section
24.839(a)(2) does not compromise our determination of the eligibility of
the real party-in-interest to acquire C and F block licenses. We note,
however, that while we find that section 24.839(a)(2) allows assignments
and transfers directly to commonly controlled affiliates of C and F
block licensees, such assignees and transferees and their real
parties-in-interest must continue to remain eligible under section
24.709.

### Permissible Growth 

24 An entity holding C and F block licenses must, for five years from
the date the license was initially granted, continue to meet the basic
eligibility criteria of gross revenues of less than \$125 million (in
each of the last two years) and total assets of less than \$500 million,
except that an entity, and its attributable interest holders, may exceed
the gross revenues and total assets thresholds if any such increase is
due to permissible growth, as permitted in section 24.709(a)(3).[^54]
Total assets is defined as "the book value . . . as evidenced by the
most recent audited financial statements . . .."[^55] Although no party
has raised concerns regarding any party's gross revenues, Nextel, Leaco,
and Comanche County all raise concerns and questions about the total
assets of Royal, Southwest, and, ultimately, of TeleCorp.

25 Nextel raises questions with regard to the amount of TeleCorp's total
assets provided in the TeleCorp/Tritel applications.[^56] Specifically,
Nextel points out that, while TeleCorp reports its total assets as
\$495,776,440 in the TeleCorp/Tritel applications, which were filed in
mid-2000, TeleCorp reported total assets of \$952,202,000 as of December
31, 1999 to the SEC.[^57] Similarly, Leaco and Comanche County argue
that Royal and Southwest are not eligible to acquire C and F block
licenses, because Royal's and Southwest's attributable total assets must
include those of TeleCorp, which exceed \$500 million. Therefore,
according to Leaco and Comanche, Royal and Southwest are not eligible
under section 24.709.[^58] Like Nextel, Leaco and Comanche County also
point out that TeleCorp reported greater total assets to the SEC than it
did to the Commission. Finally, Leaco and Comanche County argue that the
increase in assets over \$500 million should be considered attributable,
particularly AT&T Wireless' investment in TeleCorp, as well as increases
created by TeleCorp's acquisition of non-C and F block licenses.[^59]

26 TeleCorp, Royal, and Southwest respond that their total assets are
irrelevant for eligibility to acquire C and F block licenses through
assignment and transfer pursuant to section 24.839(a)(2), because
eligibility is premised on ownership of other C and F block licenses,
rather than on meeting the asset limit.[^60] In their applications,
TeleCorp, Royal, and Southwest show their total assets as
\$495,776,440.[^61] However, all of the applications contain a footnote
explaining that the number was used by entities commonly controlled by
Messrs. Vento and Sullivan for Auction No. 22 purposes in 1999 and has
likely changed due to non-attributable transactions.[^62]

27 As we read the balance sheet that TeleCorp provided attached to its
Motion to Strike, TeleCorp's most recent audited financial statement
shows that, in 1999, TeleCorp's total assets were \$952 million.[^63]
TeleCorp argues that its attributable assets remain within the \$500
million cap because the increase in its assets over the cap are not
attributable as they are the result of permissible growth under section
24.709(a)(3).[^64] Specifically, TeleCorp states that all of its assets,
"as well as TeleCorp's cash reserves, intangibles, deferred financing
costs, and other non-current assets can only be considered arising from
'business development or expanded service' incident to the business of
offering PCS to the public."[^65] Further, TeleCorp explains that its
license assets reflect the acquisition of additional licenses, which the
Commission has found to be permissible growth permitted under section
24.709(a)(3),[^66] and all the money raised to acquire its assets came
from non-attributable sources.[^67] Likewise, TeleCorp shows those
amounts it considers "debt financing."[^68] As for Leaco and Comanche
County's claims that AT&T Wireless' investment should be attributable,
TeleCorp states that AT&T's investment is non-attributable based on the
control group structure by which TeleCorp qualifies as an
entrepreneur.[^69] Under that structure, no investor may hold more than
twenty-five percent of TeleCorp's total equity, and AT&T's investment
has always been below that benchmark.[^70] Therefore, AT&T's investment
is not attributable for purposes of TeleCorp's asset calculation.[^71]

28 We agree with TeleCorp's characterization of its assets and, based
upon information provided in the TeleCorp Motion to Strike, filed
September 1, 2000, find that TeleCorp has exceeded the total asset limit
by means of permissible growth under section 24.709(a)(3). Therefore,
TeleCorp remains eligible to hold its C and F block licenses and to
acquire additional licenses pursuant to section 24.839. A further
implication of this finding is that Royal and Southwest also meet the
asset cap for eligibility and are eligible to acquire C and F block
licenses in the secondary market in accordance with Section 24.839 of
the Commission's rules.

29 We disagree, however, with TeleCorp's claims that total assets are
irrelevant for purposes of acquiring C and F block licenses pursuant to
section 24.839(a)(2). While section 24.839(a)(2) does not reference
total assets, the underlying eligibility of an entity currently holding
a C or F block license is premised on its continued compliance with the
\$500 million total assets cap in section 24.709(a). An entity currently
holding C and F block licenses may acquire additional C and F block
licenses by assignment or transfer only if it meets the total assets cap
or has exceeded the cap by permissible growth pursuant to section
24.709(a)(3). To implement these rules, Schedule A to FCC Form 603 asks
for the proposed assignee/transferee's total assets, which is defined in
the Commission's rules as the most recent audited financial
statement.[^72] Therefore, TeleCorp should have provided the amount as
stated in its most recent audited financial statement. Rather than
provide the correct figure of its total assets, TeleCorp provided an
admittedly incorrect response to this item in its application,
apparently in the mistaken belief that the figure was irrelevant.[^73]
For the reasons discussed above, this figure is relevant, and applicants
proposing to assign or transfer C and F block licenses must provide
asset and revenue determinations, pursuant to sections 24.720(f) and (g)
of the Commission's rules,[^74] for the proposed assignees or
transferees. Further, to the extent those assets and revenues exceed the
\$125 million/\$500 million limits in section 24.709(a), applicants must
explain how these increased revenues and assets are nonattributable
pursuant to section 24.709(a)(3).

### Qualifying Investors' Equity Requirements

30 Nextel has challenged TeleCorp's ownership structure, arguing that
the structure does not comply with the equity benchmarks applicable to
TeleCorp's qualified investors under the Commission's entrepreneurs'
block rules. Specifically, Nextel claims that: (1) TeleCorp's qualifying
investors do not hold the required fifteen percent equity in the
entrepreneurs' block licensees by holding fifteen percent of the
tracking stock, because the appropriate measure of equity in a
wholly-owned subsidiary is the percentage of equity held in the
parent;[^75] (2) TeleCorp's structure exposes the entrepreneurs' block
licensees to poor financial performance of other TeleCorp affiliates,
and the Commission did not intend that entrepreneurs' block licensees
would be subject to the viability of another entity;[^76] (3) the
structure places conflicting obligations on the board of directors with
respect to the tracking shareholders and the other shareholders, which
could work to the detriment of the entrepreneurs' block licensees;[^77]
and (4) the status of an entrepreneurs' block licensee's control group
in a liquidation affecting any entrepreneurs' block entity was a
"touchstone" in the Commission's analysis of entrepreneurs' block
qualifications, and the tracking stock mechanism is inconsistent with
this principle.[^78]

31 TeleCorp responds that: (1) the tracking stock structure was approved
when its initial licensing applications were approved;[^79] (2) the
particular structure of the TeleCorp tracking stock is such that,
although the tracking stock is issued by the parent and not the
subsidiary, the qualifying investors hold the requisite amount of equity
in the entrepreneurs' block licenses by holding fifteen percent of the
tracking shares;[^80] and (3) the interests of the tracking shareholders
in the entrepreneurs' block subsidiary are the same as those required
under the Commission's rules to show an equity interest in licensees
with non-traditional or non-corporate ownership structures and fully
consistent with the indicia of an equity interest articulated in the
Commission's *Competitive Bidding Fifth Report & Order*.[^81]

32 More specifically, TeleCorp states that its entrepreneurs' block
tracking stock is structured such that the rights of the tracking
shareholders in the entrepreneurs' block assets constitute direct equity
in those assets because the tracking stock provides the holders with all
of the indicia of a direct equity interest \-- namely, the right to all
the dividends or profits related to the entrepreneurs' block assets and
the right to receive the net entrepreneurs' block assets in the event of
dissolution/liquidation.[^82] Further, TeleCorp points to the specific
provisions in its Certificate of Incorporation that tie the dividend
rights and the liquidation preferences of tracking stock holders to the
entrepreneurs' block assets to the exclusion of other shareholders,[^83]
and vest the power to declare dividends in the qualified investors in
their capacity as directors.[^84]

33 TeleCorp counters Nextel's argument regarding undue risk by pointing
out that the theoretical bankruptcy of the non-entrepreneurs' block
subsidiaries would not adversely affect the entrepreneurs' block
licensees if the entrepreneurs' block aspects of the business are
performing well financially because the TeleCorp parent is a holding
company with no assets of its own other than its interests in its
subsidiaries, and because the tracking stock structure gives the
tracking shareholders a direct interest in the entrepreneurs' block
subsidiary.[^85] With respect to potential conflicts for TeleCorp's
board of directors, TeleCorp states that the directors of the TeleCorp
parent owe to non-tracked shareholders are no different from the duties
that directors in a entrepreneurs' block entity owe to equity holders
that are not part of the control group.[^86]

34 We agree with TeleCorp that the specific characteristics of its
current and proposed post-merger corporate structure comply with the
entrepreneurs' block rules regarding control group equity. In the
*Competitive Bidding Fifth Report and Order*, the Commission stated that
the indicia of equity ownership are: (a) the right to share in the
profits and losses, and receive assets or liabilities on liquidation, of
the enterprise *pro rata* in relationship to the entrepreneurs' block
licensee's ownership percentage; and (b) the absence of opportunities to
dilute the interests of the entrepreneurs' block licensee (through
capital calls or otherwise) in the venture.[^87] The Commission did not
require that, to be considered equity, a security must be issued by the
legal entity in which the equity is granted.

35 We find that TeleCorp has structured its particular stock structure
in a manner that gives the holders rights in the entrepreneurs' block
subsidiary that mirror what the Commission would otherwise expect of a
direct equity interest, and denies other common shareholders of the
parent corporation such rights in the entrepreneurs' block subsidiary.
Further, TeleCorp and Tritel's stock prospectus for the merger states
that the tracking stockholders may receive a greater value upon the
payment of dividends, and that a risk of buying the general public
shares is that

> the ability to pay dividends \[on the tracked shares\] . . . is based
> on the value of specific subsidiaries . . . The management of \[TPI,
> the post-merger parent company\] and the initial investors of TeleCorp
> and Tritel own all of the \[TPI\] tracking stock. Management can cause
> payment of any future dividends on the \[TPI\] tracking stock. The
> value received by the \[TPI\] tracking stockholders is not available
> to other \[TPI\] stockholders.[^88]

The way that the tracked shareholders would be paid on dissolution,
liquidation, or winding up of the parent is the same as would be
expected if TeleCorp's entrepreneurs' block entity were not a subsidiary
corporation; the tracking shareholders are entitled to receive *pro
rata* the net assets of the entrepreneurs' block licensee
subsidiary.[^89]

36 We are willing, for these purposes, to view the TeleCorp tracking
stock as direct equity in the entrepreneurs' block subsidiary because
the stock displays all of the characteristics of direct equity in THC
that the Commission would otherwise expect, including the right to
distributions based specifically on the entrepreneurs' block business
and residual rights in the specific entrepreneurs' block business assets
upon liquidation. Therefore, for purposes of assessing whether
TeleCorp's ownership structure meets the fifteen-percent equity
requirement in Section 24.709(b)(5), we will in this case treat the
tracking shares, rather than all of TeleCorp's issued shares, as the
total amount of equity in the entrepreneurs' block licenses. A similar
issue arose in *Fox Television Stations, Inc*.[^90] with respect to
application of the Act and the Commission's rules regarding foreign
control of broadcast licenses. In that case, the Commission declined to
apply a "count the shares" approach to calculate ownership, but rather
analyzed Fox's ownership structure based on the particular attributes of
Fox's stock structure, as we do here with respect to TeleCorp.[^91]
Therefore, under the facts presented before us, we find that, because
the qualified investors hold more than fifteen percent of the tracking
shares, they should be considered to meet the fifteen-percent threshold
of section 24.709(b)(5) of the Commission's rules, which currently
applies to TeleCorp's control group structure.[^92]

37 We do not agree with Nextel that the TeleCorp tracking stock
structure should be invalidated because parties other than the
qualifying investors have superior rights in the shares. That the
TeleCorp tracking stockholders do not have superior rights to all
parties in all circumstances does not alter the analysis. Relying on
commonly accepted definitions of equity, the Commission has held that
the nature of a class of stock as equity is not diminished by the
existence of superior rights of debt holders and other equity
holders.[^93] Therefore, that the tracked shareholders' rights in the
subsidiary holding the C and F block licenses are junior to the
preferred shareholders and creditors of the TeleCorp parent does not
require us to find that the tracking stock structure does not comply
with the requirement that TeleCorp's qualifying investors hold fifteen
percent of the equity in the entrepreneurs' block licenses.

38 With respect to the level of risk conferred on the entrepreneurs'
block licenses based on TeleCorp's structure, we also do not agree with
Nextel that the TeleCorp structure is fatally flawed because the C and F
block licensees may be at risk of financial failure if an affiliate
turns in poor financial performance.[^94] Nextel contends that the
Commission did not intend that entrepreneurs' block licensees would be
subject to the viability of another entity,[^95] and argues that the
TeleCorp parent's possible insolvency, or the poor financial performance
of other TeleCorp affiliates, could diminish funds earmarked for
distribution to the tracking stock shareholders.[^96] While the
Commission has required that control group members be entitled to
receive their fair share on the sale or dissolution of the
licensee,[^97] the Commission has never found that C and F block
licenses should not be held in corporate structures that also involve
non-entrepreneurs' block licenses or that mixing C and F block licenses
in the same corporate structure with non-entrepreneurs' block licenses
exposes the C and F block licenses to undue risk. As a practical matter,
the Commission probably could not shield C and F block PCS licensees
from the effects of poor financial performance of every company with
which they are affiliated.

39 Further, we do not see how requiring the qualifying investors to hold
fifteen percent of the total equity in TeleCorp, as we understand Nextel
to argue, solves the problem that Nextel suggests. It appears that the
qualifying investors are equally at risk in the event of the insolvency
or poor performance of either the entrepreneurs' block licensees, the
non-entrepreneurs' block licensees, or the TeleCorp parent. The logical
endpoint of Nextel's argument is that entrepreneurs' block licenses
could never be held in the same corporate structure with
non-entrepreneurs' block licenses. We do not believe that the Commission
intended to inhibit combinations of entrepreneurs' block and
non-entrepreneurs' block licenses under a common parent to form a larger
and more efficient network. In this case, the presence of the
non-entrepreneurs' block subsidiary is far more likely to strengthen the
performance and enhance the value of the entrepreneurs' block entity
because the entrepreneurs' block licenses are part of a larger network
that has greater opportunities to obtain financing and creates the
opportunity for greater economy of scale. Further, in the case of
entrepreneurs' block licensees that have no affiliated non-
entrepreneurs' block licenses, the bankruptcy of a significant
non-attributable equity holder could have a significant and adverse
effect on the entrepreneurs' block licensee as a whole. Therefore, we do
not believe that the TeleCorp ownership structure puts the
entrepreneurs' block licenses at risk in a manner that contravenes
either the Commission's rules or the analysis in the *Competitive
Bidding Fifth Report and Order*.

40 Similarly, we disagree with Nextel's argument that TeleCorp's
structure is flawed because the tracking stock arrangement confers
inconsistent obligations on the directors of the parent company.[^98] As
with Nextel's argument regarding undue risk, the Commission has not
addressed entrepreneurs' block corporate structures in this level of
detail. That the directors of the TeleCorp parent have fiduciary
obligations to the non-tracked shareholders as well as the tracked
shareholders does not appear to us to create undue conflict that is
likely to work to the detriment of the entrepreneurs' block licensees.
We agree with TeleCorp that the duties that the directors of the
TeleCorp parent owe to non-tracked shareholders appear no different from
the duties that directors in an entrepreneurs' block entity owe to
equity holders that are not part of the control group.[^99] Further, as
TeleCorp states, the fact that the entrepreneurs' block and
non-entrepreneurs' block assets are controlled by one parent and are
parts of a single network minimizes the possibility that any
inconsistency of director obligations by virtue of the tracking shares
could actually have an effect on the entrepreneurs' block licensees.

41 For these reasons, we find that TeleCorp's current and proposed
ownership structure complies with section 24.709(b)(5) of the
Commission's rules.

### Unjust Enrichment 

42 In establishing the entrepreneurs' blocks and providing bidding
credits for small businesses participating in auctions, the Commission
also, as mandated by statute,[^100] adopted provisions to prevent unjust
enrichment should licenses acquired using these provisions be
subsequently transferred to ineligible entities.[^101] With respect to
bidding credits, the unjust enrichment rule requires those seeking to
transfer or assign licenses to entities that do not qualify for a
bidding credit, or that qualify for a different level of bidding credit,
to reimburse the government for the amount of the bidding credit or for
the difference between the bidding credit obtained by the seller and the
bidding credit for which the buyer would qualify.[^102]

#### TeleCorp's Licenses

43 Nextel asserts that the transaction described in the Merger Agreement
does not comport with the applications filed by TPI and Tritel. Nextel
argues that, contrary to description in the applications, the Merger
Agreement specifies that, at some point, TeleCorp will have ceded
negative control to Tritel, and therefore, the transfer or assignment of
TeleCorp's licenses is not *pro forma* and requires the payment of
unjust enrichment.[^103] We disagree, and find that at no time in the
transaction is there a substantial change in control of the TeleCorp
licenses. Both TeleCorp and TPI are (and will be) controlled by Messrs.
Vento and Sullivan so that, even if Nextel were correct about the
structure of the transaction, the assignments and transfers of
TeleCorp's licenses to TPI will be *pro forma* in nature.[^104]
Accordingly, unjust enrichment payments do not apply in the transactions
involving these licenses.[^105]

#### Other C Block Licenses

44 All of the other C block licenses for which the parties seek consent
for assignment or transfer of control to TeleCorp were acquired by
entities that qualified in Auction No. 5 as "small" businesses (*i.e.,*
with gross revenues not exceeding \$40 million).[^106] Because the
assignees/ transferees of these licenses continue to qualify as small
businesses, Commission rules do not require unjust enrichment payments
with respect to these C block licenses. We note that the Commission
recently eliminated bidding credit unjust enrichment payments with
respect to assignments/transfers of C block licenses won in Auctions
Nos. 5 or 10.[^107]

#### Other F Block Licenses

45 [TeleCorp/Tritel]{.underline}. As part of the proposed merger, Tritel
will transfer control of its F block PCS licenses to TPI. Those licenses
were awarded with a bidding credit for "very small" businesses (*i.e.*,
with gross revenues of less than \$15 million) in Auction No. 11. Nextel
argues that transfer to TPI of the licenses held by Tritel as a "very
small" business will require unjust enrichment payments because TeleCorp
qualifies only as a "small" business.[^108] TeleCorp and Tritel assert
that no unjust enrichment is owed because both TeleCorp and Tritel are
entrepreneur block licensees that qualified for the same bidding credit
level at the time the license was awarded to the transferor, even though
the transferee may have since outgrown the bidding credit
eligibility.[^109] For the reasons outlined below, we find that bidding
credit unjust enrichment payment is due on the transfers of Tritel's F
block licenses to TPI. In addition, we deny TeleCorp/Tritel's request
for waiver of the unjust enrichment rules in connection with TPI's
acquisition of these Tritel licenses.

46 TeleCorp and Tritel assert that as entrepreneurs' block licensees,
they may become a transferee of such licenses during the holding period
for those licenses and remain eligible for bidding credits at the level
for which they qualified at auction, despite growth beyond the
eligibility criteria.[^110] TeleCorp and Tritel rely in part on a
sentence in paragraph 125 of the *Competitive Bidding Fifth MO&O*, which
states that the Commission will \"under certain circumstances allow
licensees to retain their eligibility during the holding period, even if
the company has grown beyond our size limitations for the
entrepreneurs\' block and for small business eligibility.\"[^111]
TeleCorp and Tritel mischaracterize the above sentence as a statement
that entities may apply their past bidding credit eligibility to
acquisition of a new license. In doing so, the parties ignore the
introductory sentence of the paragraph, which states that it addresses
"the application of our holding rule to our financial caps."[^112] Thus,
this statement does not apply to "grandfathering" of a company\'s size
for purposes of bidding credit eligibility and unjust enrichment in
future transactions. Rather, it allows entrepreneur block licensees to
retain their eligibility to continue to hold entrepreneur block licenses
during the five-year holding period despite growth beyond the financial
caps, and to hold those licenses without being subject to unjust
enrichment for such growth.[^113]

47 TeleCorp and Tritel further rely on paragraph 126 of the *Competitive
Bidding Fifth MO&O*, which clarifies that transfers of control and
assignments are permitted during the holding period from one
entrepreneurs' block licensee to another such licensee that at the time
of the auction "satisfied the entrepreneurs' block criteria," and states
that "unjust enrichment penalties . . . apply if these requirements are
not met, or if they qualified for different provisions at the time of
licensing."[^114] TeleCorp and Tritel argue that since both parties to
the transaction qualified for the same bidding credit when Tritel's
predecessor won the F block PCS licenses at Auction No. 11, this
sentence supports their conclusion that no unjust enrichment applies. We
find that TeleCorp and Tritel\'s reading of the *Competitive Bidding
Fifth MO&O* is misguided. Paragraph 126, rather than discussing bidding
credit eligibility, clarifies the Commission's transfer rule in the
context of the eligibility of transferees and assignees to receive
licenses during the initial license term.[^115] While the sentence cited
by TeleCorp and Tritel addresses unjust enrichment, the logical
conclusion, given the subject of the paragraph, is that it intended to
address unjust enrichment relating to the entrepreneurs' block set-aside
as opposed to unjust enrichment with respect to bidding credits.[^116]
In fact, the Commission used the very next paragraph to address unjust
enrichment with respect to bidding credits.[^117] Paragraph 127 states:

\[W\]e reiterate that if a designated entity transfers or assigns its
license before year five to a company that qualifies for no bidding
credit, then such a sale will entail full payment of the bidding credit
as a condition of transfer. If, however, the same transaction occurs
(during the same time frame), but the buyer is eligible for a lesser
bidding credit, then the difference between the bidding credit obtained
by the seller and bidding credit for which the buyer would qualify, must
be paid to the U.S. Treasury for the transaction to be approved by the
FCC.[^118]

48 Indeed, the Commission has explicitly rejected the interpretation of
the *Competitive Bidding Fifth MO&O* now proffered by TeleCorp and
Tritel.[^119] In the *Omnipoint Waiver Order,* the Commission upheld an
order of the Bureau's Auctions and Industry Analysis Division ("AIAD")
refusing to allow Omnipoint Corporation ("Omnipoint") to qualify for
bidding credits in Auction No. 22 on the basis of its business size at
the time of Auction No. 5. Grant of the waiver would have allowed
Omnipoint to participate in Auction No. 22 with a "grandfathered"
bidding credit, despite that Omnipoint had grown since Auction No. 5.
Disagreeing with Omnipoint's reading of the *Competitive Bidding Fifth
MO&O*, the Commission rejected Omnipoint's argument that, because
Omnipoint would be able to avoid unjust enrichment in a secondary market
transaction, it should receive a "grandfathered" bidding credit. As we
noted above, in the *Omnipoint Waiver Order* we determined that
paragraph 127 makes unjust enrichment applicable in the context of
secondary market transactions. Subsequently, in the *D&E Communications
Order,*[^120] AIAD issued an order refusing to grant D&E Communications
a waiver of the unjust enrichment provisions where D&E Communications
had at the time of the transfer application outgrown the bidding credit
eligibility it held at the time of Auction No. 5, when the transferor
had won the subject license. The order noted that for purposes of
determining bidding credit eligibility the Commission evaluates an
entity's status at the time the relevant application is filed, which in
that case, as here, was the date on which the application for transfer
of control was filed.[^121]

49 Consistent with our findings in the *Omnipoint Waiver Order* and the
*D&E Communications Order*, we find TeleCorp\'s interpretation of the
*Competitive Bidding Fifth MO&O* to be flawed. In refusing to grant a
"grandfathered" bidding credit in the *Omnipoint Waiver Order*, the
Commission expressly rejected Omnipoint's argument that, under the
*Competitive Bidding Fifth MO&O*, bidding credit status is grandfathered
for secondary market transactions. Further, as explained in *D&E*
*Communications,* the Commission evaluates an entity\'s status at the
time the relevant application (*i.e.,* assignment/transfer or
short-form) is filed, not at the time the licenses are awarded to the
transferor or assignor at auction. Finally, TeleCorp and Tritel have not
convinced us that the circumstances of their transaction justify waiver
of the bidding credit unjust enrichment rules.[^122]

50 [Zuma, Poka Lambro, and Denton County applications]{.underline}.
Independent of the TeleCorp/Tritel transaction, Southwest filed
applications for the assignment of nine F block PCS licenses held by
Poka Lambro. As stated previously, Southwest and TPI (the post-merger
TeleCorp parent) base their eligibility to acquire the F block licenses
on section 24.839.[^123] Although Southwest and TPI do not hold other C
or F block licenses, they are commonly controlled by Messrs. Vento and
Sullivan, the real parties-in-interest to the proposed assignment, who
remain eligible to acquire C and F block licenses. Accordingly,
Southwest is eligible to receive the F block licenses pursuant to
section 24.839. However, before Poka Lambro can complete the assignment,
it must first reimburse the government for benefits it received at
auction. Like the TeleCorp/Tritel transaction, unjust enrichment applies
since Poka Lambro won these F block licenses at auction qualifying as a
"very small" business with a twenty-five-percent bidding credit, and
Southwest, as a TeleCorp affiliate, only qualifies for a fifteen-percent
bidding credit at the time of filing the assignment applications.

#### Section 1.2111(a) Disclosure Requirements

51 In conjunction with the Commission's unjust enrichment provisions,
section 1.2111(a) of the Commission's rules requires applicants seeking
to assign or transfer control of a license within three years of having
received such license through a competitive bidding procedure to file
documents which reveal, among other things, the consideration to be paid
for such license.[^124] Leaco and Comanche County challenge the Zuma and
Denton County applications because the licenses to be acquired from Zuma
and Denton County were acquired in 1999 pursuant to Auction 22, and,
while the applicants filed with the Commission the associated asset
purchase agreements, the purchase price has been redacted.[^125] Leaco
and Comanche County argue that the applications should be denied, or at
a minimum, the applicants should be required to amend their applications
to disclose the information.[^126] Royal and Southwest respond that it
is common industry practice to redact commercially sensitive material
from purchase agreements attached to applications, and that the
Commission has granted assignment and transfer of control applications
for other C and F block licenses wherein the purchase prices were
redacted.[^127]

52 When the Commission adopted the transfer disclosure provisions of
section 1.2111(a), the Commission stated that is "important to monitor
transfers of licenses awarded by competitive bidding in order to
accumulate the data necessary to evaluate our auction designs and judge
whether 'licenses \[have been\] issued for bids that fall short of the
true market value of the license.'"[^128] The Commission also stated
that it would give "particular scrutiny to auction winners who have not
yet begun commercial service and who seek approval for a transfer of
control or assignment of their licenses within three years after the
initial license grant, in order to determine if any unforeseen problems
relating to unjust enrichment have arisen outside the designated entity
context."[^129] Further, the Commission found that any competitive
concerns raised by the possible disclosure of sensitive information
contained in purchase agreements and similar documents can be addressed
by the applicants requesting that the information be withheld from
public inspection pursuant to section 0.459 of the Commission's
rules.[^130]

53 We find that the section 1.2111(a) disclosure requirement should be
waived in this instance, and that the purposes of the rule would not be
fulfilled by requiring this disclosure. In this case, we are able to
determine that this transaction is in the public interest without the
provision of this information.

### Reversionary interest

54 With respect to the Poka Lambro applications, Leaco and Comanche
County also argue that Southwest has afforded to Poka Lambro a
reversionary interest in the underlying licenses to be assigned, which
is prohibited by the Act.[^131] Specifically, Leaco and Comanche County
attack provisions contained in the asset purchase agreement between
Southwest and Poka Lambro, which provide that Poka Lambro has the option
to purchase any of the licenses proposed to be assigned to Southwest
that are not constructed within two years from the closing date of the
proposed assignments to Southwest.[^132] Leaco and Comanche County argue
that the Buy-Back Option violates section 301 of the Act,[^133] by
creating a right beyond the terms, conditions and period of the
licenses.[^134] In addition, Leaco and Comanche County raise concerns
that the Buy-Back Option, in conjunction with a proposed agreement by
which Poka Lambro will manage the licenses, deprives Southwest of
control over the licenses subject to the option.[^135]

55 Southwest and Poka Lambro respond that the Buy-Back Option is not
analogous to those instances in which the Commission has found a
prohibited reversionary interest, because it does not confer any
property interest to the optionee in the licenses, and the option, which
lasts a maximum of four years, does not extend past the license
terms.[^136] If Poka Lambro is eligible to exercise its option to
buy-back the licenses due to Southwest's failure to build out the
licenses, "both parties acknowledge that the subsequent assignment would
still require Commission approval."[^137] Finally, Southwest and Poka
Lambro state that Southwest will have complete control over the
ownership of the licenses, and that despite the management agreement,
Southwest, as licensee, will make all construction build-out decisions,
consistent with Commission rules.[^138]

56 All the licenses at issue are subject to construction build-out
requirements pursuant to the Commission's rules.[^139] The relevant
five-year construction build-out date is September 17, 2001 for the C
block licenses at issue, and April 28, 2002 for the Poka Lambro F block
licenses. Specifically, at the five-year mark, the C block licenses must
be constructed to provide sufficient signal strength to provide adequate
service to one-third of the population of the market, and the F block
licenses must be constructed to provide sufficient signal strength to
provide adequate service to one-quarter of the population in the
relevant market.[^140] As we read the Buy-Back Option, it would not
become exercisable before November 2002, at the earliest.[^141] Because
the Buy-Back Option is only relevant to any licenses for which coverage
is less than 30 percent of population and the C block licenses at issue
will have already been required to construct sufficient to provide
service to 33 percent of the market, the Buy-Back Option is not
applicable as to the C block licenses.

57 With respect to the possible application of the Buy-Back Option to
the F block PCS licenses, we agree with Southwest and Poka Lambro that
the Buy-Back Option granted to Poka Lambro does not constitute a
prohibited reversionary interest. Those instances where the Commission
has found a prohibited reversionary interest to exist involved egregious
cases that far exceed the type of arrangement involved here.[^142] The
option provided to Poka Lambro differs from those types of reversionary
interests the Commission has found in violation of its policies. The
option at issue does not extend beyond the license term. Further, the
parties agree that the license cannot be transferred or assigned without
prior Commission approval. As the Commission has previously found, "the
fact that the Commission is required to undertake such review, and that
no permit can be assigned or transferred prior to Commission approval,
ensures that the Federal Government retains control over the use of the
spectrum, consistent with Sections 301 and 304."[^143] Therefore, we
find that the Buy-Back Option does not constitute a prohibited
reversionary interest.

## Public Interest Analysis

### Competitive Framework

58 Where an assignment or transfer of control of licenses involves
telecommunications service providers, our public interest determination
must be guided primarily by the Act.[^144] Our analysis of competitive
effects under the Commission's public interest standard consists of
three steps. First, we determine the markets potentially affected by the
proposed transaction.[^145] Second, we assess the effects that the
transaction may have on competition in these markets.[^146] Third, we
consider whether the proposed transaction will result in
transaction-specific public interest benefits.[^147] Ultimately, we must
weigh any harmful and beneficial effects to determine whether, on
balance, the transaction is likely to enhance competition in the
relevant markets.

### Analysis of Potential Adverse Effects

#### Domestic Mobile Voice Telephone Services

59 TeleCorp and Tritel subsidiaries are both licensed to provide PCS
services.[^148] TeleCorp and Tritel subsidiaries currently offer only
interconnected mobile phone service and ancillary products associated
with such service, such as handsets and voicemail.[^149] For purposes of
conducting our public interest analysis, we also consider the license
holdings of other entities whose interests are attributable to either
TeleCorp or Tritel under the Commission's cross ownership rules.[^150]
For present purposes, we attribute to TeleCorp and Tritel the licenses
of ABC Wireless, an entity controlled by Messrs. Vento and
Sullivan.[^151]

##### Overlapping Interests

60 In this section, we examine the competitive impact of overlapping
interests attributable to the applicants and determine that the proposed
assignments and transfers of control will not reduce actual competition
in any market for mobile voice services. The mobile voice interests of
TeleCorp and Tritel are, for the most part, geographically
complementary.[^152] TeleCorp currently operates in a region covering
portions of the New Orleans, Little Rock, Memphis-Jackson, Boston, St.
Louis, Houston, and Louisville-Lexington-Evansville MTAs, while Tritel
currently operates in portions of the Atlanta, Nashville,
Memphis-Jackson, Louisville-Lexington-Evansville, and Knoxville
MTAs.[^153]

61 According to the applicants, the combined footprints of TeleCorp and
Tritel overlap in only one county, but the overlap does not exceed the
Commission's spectrum aggregation limit.[^154] The applicants have
identified twenty-eight markets in which Tritel properties would overlap
with attributable properties of TeleCorp, through the spectrum held by
TeleCorp affiliate ABC Wireless.[^155] Of these overlaps, the CMRS
spectrum aggregation limit would be exceeded in only two markets.[^156]
ABC Wireless and Tritel currently do not compete against each other for
business in these markets.[^157] We therefore conclude that this
transaction will not result in the elimination of an existing competitor
in the provision of domestic mobile voice services in any market. We
recognize the possibility that ABC Wireless and Tritel might have become
competitors at some future date, and that the TeleCorp/Tritel
transaction eliminates any such prospects. Our general policy, however,
has been to permit the aggregation of CMRS spectrum and interests
therein up to the limits permitted under the spectrum cap rule, provided
that such aggregation neither reduces actual competition nor stymies the
development of competition in any market.[^158] We find no special
circumstances present here that warrant adopting a different view.

62 No overlaps with TeleCorp's or Tritel's current licenses are created
by the proposed acquisitions of Royal and Southwest from Zuma, Poka
Lambro, and Denton County. These licenses are attributable for spectrum
aggregation purposes to TeleCorp through their common control by Messrs.
Vento and Sullivan. In addition, TeleCorp affiliates recently were
assigned approximately fourteen C or F block licenses, none of which
creates additional overlaps with current TeleCorp or Tritel
properties.[^159] Though not attributable to TeleCorp for purposes of
the CMRS spectrum aggregation limit, TeleCorp and Tritel identify
overlaps between AT&T Wireless and TeleCorp and Tritel spectrum
holdings, all of which they state are "competitively insignificant" and
in compliance with the CMRS spectrum aggregation limit.[^160]

##### Spectrum Cap Issues

63 As discussed above, the proposed transaction would result in the
aggregation of spectrum in two areas in a manner that would exceed the
Commission's CMRS spectrum aggregation limit.[^161] In the first
instance, applicants would hold 60 MHz of spectrum throughout the
Bowling Green-Glasgow, Kentucky BTA (BTA 052). In this area, applicants
hold a 30 MHz BTA-based C block PCS license, a 10 MHz BTA-based F block
PCS license, and 20 MHz of disaggregated spectrum in an MTA-based A
block PCS license.[^162] Because the Bowling Green-Glasgow, Kentucky BTA
consists entirely of rural areas as we have defined them,[^163] the
relevant spectrum aggregation limit is 55 MHz. Hence, a divestiture of 5
MHz of spectrum is required to achieve compliance with the Commission's
rules.

64 In the second case, the applicants would hold 50 MHz of spectrum
throughout the Owensboro, Kentucky BTA (BTA 338). In this area,
applicants hold a 30 MHz BTA-based C block PCS license and 20 MHz of
disaggregated spectrum in an MTA-based A block PCS license.[^164] The
Owensboro, Kentucky BTA consists principally of rural areas where the
spectrum cap is 55 MHz, but also one county (Daviess County, Kentucky)
where the cap remains 45 MHz because is part of a Metropolitan
Statistical Area. Accordingly, the applicants must divest 5 MHz of
spectrum in Daviess County to achieve compliance with the Commission's
rules.

65 The applicants have not requested a waiver with respect to these
markets, and therefore, pursuant to section 20.6(e) of the Commission's
rules, the applicants must come into compliance with the spectrum cap in
these two markets prior to consummating the instant transfers and
assignments by filing an application to divest the requisite amount of
spectrum prior to closing on the TeleCorp/Tritel merger.[^165]

### Public Interest Benefits

66 TeleCorp and Tritel contend that the proposed merger will generate
several public interest benefits. The companies claim that consumers
will benefit from the merger of two contiguous footprints in terms of
enhanced in-network coverage and the creation of additional competition
to national industry players such as BellSouth, Verizon, and Sprint
Spectrum.[^166] According to the applicants, they believe that there is
a significant amount of inter-city traffic among the residents of the
major cities in the southeastern TeleCorp footprint and the contiguous
Tritel footprint, and vice-versa.[^167] Applicants claim that, given the
proliferation and success of rate plans that involve blanket rates
without roaming charges, the combined single-company regional footprint
created by the merger would provide TeleCorp pricing flexibility and
allow it to develop both larger and more targeted home rate plans and
extended home rate plans for customers that travel in-region.[^168]

67 We agree with applicants that subscribers will benefit from the
expanded regional footprint offered by TeleCorp, and better allow these
new entrants to compete with existing competitors. While applicants'
remaining claims are certainly plausible, we are unable to gauge the
likelihood or significance of these benefits based on the information in
this record.[^169]

#  CONCLUSION

68 Based upon our review under section 310(d), we determine that this
transaction will not result in harm to competition in any relevant
market.[^170] We also determine that the proposed transaction will
likely result in public interest benefits. We therefore conclude that,
on balance, applicants have demonstrated that these assignments serve
the public interest, convenience, and necessity. Accordingly, we grant
the applications.

#  Ordering clauses

69 IT IS ORDERED, pursuant to sections 4(i) and (j), 309, and 310(d) of
the Communications Act of 1934, as amended, 47 U.S.C. §§154(i) and (j),
309, and 310(d), and section 0.331 of the Commission's rules, 47 C.F.R.
§ 0.331, that the Comments on or, in the Alternative, Petition to Deny
of Nextel Communications, Inc., filed August 16, 2000, ARE DENIED.

70 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Petition to Deny the Applications of Zuma
PCS, LLC For Consent to Transfer Control of Zuma/Odessa, Inc. and
Zuma/Lubbock, Inc. to Royal Wireless, L.L.C., filed August 4, 2000, by
Leaco Rural Telephone Cooperative, Inc. and Comanche County Telephone
Company, IS DENIED.

71 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Petition to Deny the Applications of Poka
Lambro Ventures, Inc., Poka Lambro PCS, Inc., and Poka Lambro/PVT
Wireless, L.P. for Consent to Assign C and F Block Personal
Communications Services Licenses to Southwest Wireless, L.L.C., filed
August 4, 2000, by Leaco Rural Telephone Cooperative, Inc. and Comanche
County Telephone Company, IS DENIED.

72 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Petition to Deny the Application of Denton
County Electric Cooperative, Inc., for Consent to Assign C Block
Personal Communications Services Licenses to Southwest Wireless, L.L.C.,
filed August 4, 2000, by Leaco Rural Telephone Cooperative, Inc. and
Comanche County Telephone Company, IS DENIED.

73 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Motion to Strike of TeleCorp PCS, Inc., *et
al*., or in the Alternative, Request for Leave to File Substantive
Response to Late Filed Comments, filed September 1, 2000, IS DENIED.

74 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and sections 0.331 and 20.6 of the
Commission's rules, 47 C.F.R. §§ 0.331 and 20.6, that the authorizations
and licenses referenced in the TeleCorp/Tritel Applications and related
thereto are subject to the condition that the parties come into
compliance with 47 C.F.R. § 20.6 with respect to the Bowling
Green-Glasgow, Kentucky BTA and Daviess County, Kentucky in the
Owensboro, Kentucky BTA prior to consummating the TeleCorp/Tritel
Applications.

75 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and sections 0.331 and 1.2111(d) of the
Commission's rules, 47 C.F.R. §§ 0.331, 1.2111(d), that TeleCorp and
Tritel's request for waiver of the unjust enrichment provisions in
section 1.2111(d) of the Commission's rules, 47 C.F.R. § 1.2111(d), is
DENIED.

76 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and sections 0.331 and 1.2111(d) of the
Commission's rules, 47 C.F.R. §§ 0.331, 1.2111(d), that, to the extent
discussed above, Commission approval of the assignment and transfer of
licenses granted herein is conditioned upon assignors and transferors
making unjust enrichment payments to the U.S. government pursuant to
section 1.2111(d) of the Commission's rules, 47 C.F.R. § 1.2111(d).

77 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and sections 0.331, 1.2110(g) and 1.2111(c) of
the Commission's rules, 47 C.F.R. §§ 0.331, 1.2110(g), 1.2111(c), that
Commission approval of the assignment and transfer of the various PCS
licenses granted herein is conditioned upon the execution by the
assignees, assignors, and the Commission of all Commission loan
documents, unless the licenses being assigned and transferred have been
paid in full. Unless the licenses that will be assigned and transferred
have been paid in full, this approval is conditioned upon execution of
the applicable financing statements (i.e., the UCC-1 Forms) and payment,
on or before the consummation date, of all costs associated with the
preparation and recordation of the financing statements. In addition,
all installment payments must be current on the consummation date. To be
current, the installment payment may not be in the non-delinquency
period or grace period. In addition, there must be no outstanding fees,
including late fees, due to the Commission. No licenses will be issued
to the assignees and transferees until the Commission receives
notification pursuant to section 1.948(d) of the Commission's rules, 47
C.F.R. § 1.948(d), that all conditions that must be met at or before
consummation have been satisfied, including execution of the appropriate
financing documents. Failure of the parties to comply with any of the
financial obligations described above will result in automatic
cancellation of the Commission's approval hereunder and in dismissal of
the relevant assignment or transfer of control applications.

78 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and sections 0.331, 1.925(a), and 1.2111(a) of
the Commission's rules, 47 C.F.R. §§ 0.331, 1.925(a), 1.2111(a), that
the underlying purposes of the disclosure requirements of section
1.2111(a) of the Commission's rules would not be served by application
of the rule to the instant applications, and therefore, section
1.2111(a), IS WAIVED.

79 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Applications of Zuma PCS, LLC For Consent to
Transfer Control of Zuma/Odessa, Inc. and Zuma/Lubbock, Inc. to Royal
Wireless, L.L.C., filed August 4, 2000, File Nos. 0000163408,
0000163410, ARE GRANTED subject to the above conditions.

80 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Applications of Poka Lambro Ventures, Inc.,
Poka Lambro PCS, Inc., and Poka Lambro/PVT Wireless, L.P. for Consent to
Assign C and F Block Personal Communications Services Licenses to
Southwest Wireless, L.L.C., filed August 4, 2000, File Nos. 0000177844,
0000179413, 0000178897, ARE GRANTED subject to the above conditions.

81 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§154(i)
and (j), 309, and 310(d), and section 0.331 of the Commission's rules,
47 C.F.R. § 0.331, that the Application of Denton County Electric
Cooperative, Inc., for Consent to Assign C Block Personal Communications
Services Licenses to Southwest Wireless, L.L.C., filed August 4, 2000,
File No. 0000178796, IS GRANTED subject to the above conditions.

82 Accordingly, having reviewed the applications and the record in this
matter, IT IS ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 154(i) and (j), 309, and 310 (d), and section 0.331 of the
Commission's rules, 47 C.F.R. § 0.331, that the applications of TeleCorp
PCS, Inc., Tritel, and Indus, and applications of TeleCorp Holding Corp.
II, L.L.C., TeleCorp PCS, L.L.C., ABC Wireless, L.L.C., PolyCell
Communications, Inc., Clinton Communications, Inc., and AT&T Wireless
PCS, LLC for Consent to Transfer of Control and Assignment of Licenses
and Authorizations in WT Docket No. 00-130, filed April 27, 2000, May 4,
2000, and May 9, 2000, ARE GRANTED subject to the above conditions.

83 This action is taken pursuant to authority delegated by 47 C.F.R. §
0.331.

FEDERAL COMMUNICATIONS COMMISSION

Thomas J. Sugrue

Chief, Wireless Telecommunications Bureau

[^1]: *See* Applications of TeleCorp PCS, Inc., Tritel, and Indus, and
    Applications of TeleCorp Holding Corp. II, L.L.C., TeleCorp PCS,
    L.L.C., ABC Wireless, L.L.C., PolyCell, Inc., Clinton
    Communications, Inc., and AT&T Wireless PCS, LLC for Consent to
    Transfer of Control and Assignment of Licenses and Authorizations,
    WT docket No. 00-130, File No. 0000123402 (lead application), filed
    April 27, 2000, May 4, 2000, and May 9, 2000 ("TeleCorp/Tritel
    Applications") at Exhibit A: Description of Transaction and Public
    Interest Statement ("Public Interest Statement") at 2, as
    supplemented by TeleCorp/Tritel Merger Applications Supplemental
    Exhibit, filed June 22, 2000 ("June 2000 Supplement"). According to
    the applicants, Messrs. Vento and Sullivan currently have *de jure*
    and *de facto* control over TeleCorp. *See* Public Interest
    Statement at 2.

[^2]: TeleCorp Holding Corp., Inc., which will become TeleCorp Holding
    Corp., LLC after consummation of the merger, holds TeleCorp's
    entrepreneur's block licenses and other licenses obtained with
    bidding credits; TeleCorp PCS LLC holds TeleCorp's other PCS
    licenses. A third subsidiary, TeleCorp Communications, Inc. holds
    microwave licenses. Public Interest Statement at 1, n. 2.

[^3]: *See* June 2000 Supplement at 9-11. *See also* TeleCorp Tritel
    Merger Joint Proxy Statement -- Prospectus, filed with the U.S.
    Securities and Exchange Commission ("SEC"), dated June 20, 2000
    ("Joint Proxy Statement -- Prospectus").

[^4]: *See* Joint Proxy Statement -- Prospectus at 5.

[^5]: *Id*. at Tritel, Inc. Notice of Special Meeting to Tritel
    Stockholders.

[^6]: June 2000 Supplement at 12.

[^7]: 47 U.S.C. § 310(d).

[^8]: *See* TeleCorp/Tritel Applications. We note that on October 5,
    2000, the applicants filed a minor amendment to their applications
    to change the assignee of the assignment of the Indus authorization
    from Black Label Wireless, Inc. to Wisconsin Acquisition, another
    wholly owned, indirect subsidiary of TPI. *See* Amendment to Pending
    Application File No. 00001117340, filed Oct. 5, 2000.

[^9]: Public Interest Statement at 3.

[^10]: *Id.*

[^11]: *Id*. at 8.

[^12]: *See* TeleCorp PCS, Inc., Tritel, Inc., and Indus, Inc. Seek FCC
    Consent to Transfer Control of, or Assign, Broadband PCS and LMDS
    Licenses, *Public Notice*, WT Docket No. 00-130, DA 00-1589 (rel.
    July 17, 2000) ("*Acceptance Public Notice*").

[^13]: *See* Comments on or, in the Alternative, Petition to Deny of
    Nextel Communications, Inc., filed August 16, 2000 ("Nextel
    Petition").

[^14]: *See* Reply Comments of Leaco Rural Telephone Cooperative, Inc.
    and Comanche County Telephone Company, Inc. in Support of Comments
    on or, in the Alternative, Petition to Deny of Nextel
    Communications, Inc., filed Aug. 28, 2000 ("Leaco/Comanche County
    Reply Comments").

[^15]: *See* Reply Comments of Alpine PCS, Inc., filed Aug. 28, 2000
    ("Alpine Reply Comments'). In response to Leaco and Comanche County
    and Alpine, TeleCorp filed a motion to strike the Leaco/Comanche
    County Reply Comments and the Alpine Reply Comments, alternatively
    requesting leave to file a response to those reply comments. *See*
    Motion to Strike of TeleCorp PCS, Inc., *et al.*, or in the
    Alternative, Request for Leave to File Substantive Response to Late
    Filed Comments, filed Sept. 1, 2000 ("TeleCorp Motion to Strike").
    In further response, Alpine, Leaco, and Comanche filed oppositions
    to TeleCorp's Motion to Strike. *See* Opposition of Alpine PCS, Inc.
    to Motion to Strike, filed Sept. 14, 2000 ("Alpine Opposition");
    Opposition to Motion to Strike Reply Comments of Leaco Rural
    Telephone Cooperative, Inc. and Comanche County Telephone Company,
    Inc., filed Sept. 14, 2000 ("Leaco/Comanche Opposition"). We deny
    TeleCorp's Motion to Strike because the issues raised by Leaco and
    Comanche County are relevant in this proceeding, are interrelated
    with the issues raised by Nextel, and were timely raised with
    respect to the applications involving proposed acquisitions by Royal
    and Southwest, both TeleCorp affiliates.

[^16]: *See* File Nos. 0000163408, 0000163410 ("Zuma Applications"),
    Exhibit 1, at 1; File Nos. 0000177844, 0000179413, 0000178897 ("Poka
    Lambro Applications" ), Exhibit 1 at 2; File No. 0000178796 ("Denton
    County Application"), Exhibit 1 at 1. Messrs. Vento and Sullivan
    hold their interest in Southwest indirectly through Southwest
    Lending, L.L.C. *Id.*

[^17]: *See* Zuma Applications.

[^18]: *See* Poka Lambro Applications and Denton County Application.

[^19]: *See* Wireless Telecommunications Bureau Assignment of
    Authorization and Transfer of Control Applications Accepted for
    Filing, Public Notice, Report No. 578 (rel. July 5, 2000) ("*July
    5^th^ Public Notice*").

[^20]: *See* Petition to Deny the Applications of Zuma PCS, LLC For
    Consent to Transfer Control of Zuma/Odessa, Inc. and Zuma/Lubbock,
    Inc. to Royal Wireless, L.L.C., filed Aug. 4, 2000, by Leaco Rural
    Telephone Cooperative, Inc. and Comanche County Telephone Company
    ("Zuma Petition to Deny"); Petition to Deny the Applications of Poka
    Lambro Ventures, Inc., Poka Lambro PCS, Inc., and Poka Lambro/PVT
    Wireless, L.P. for Consent to Assign C and F Block Personal
    Communications Services Licenses to Southwest Wireless, L.L.C.,
    filed Aug. 4, 2000, by Leaco Rural Telephone Cooperative, Inc. and
    Comanche County Telephone Company ("Poka Lambro Petition to Deny");
    and Petition to Deny the Application of Denton County Electric
    Cooperative, Inc., for Consent to Assign C Block Personal
    Communications Services Licenses to Southwest Wireless, L.L.C.,
    filed Aug. 4, 2000, by Leaco Rural Telephone Cooperative, Inc. and
    Comanche County Telephone Company ("Denton County Petition to
    Deny").

[^21]: 47 C.F.R. § 24.839.

[^22]: 47 U.S.C. § 310(d).

[^23]: Section 310 provides that the Commission shall consider any such
    applications "as if the proposed transferee or assignee were making
    application under section 308, 47 U.S.C. 308, for the permit or
    license in question." 47 U.S.C. § 310(d). Furthermore, the
    Commission is expressly barred from considering "whether the public
    interest, convenience, and necessity might be served by the
    transfer, assignment, or disposal of the permit or license to a
    person other than the proposed transferee or assignee." *Id.*

[^24]: *See* *Applications of GTE Corporation and Bell Atlantic
    Corporation for Transfer of Control*, CC Docket No. 98-184,
    Memorandum Opinion and Order, FCC 00-221, at ¶ 22 (rel. June 16,
    2000) ("*Bell Atlantic/GTE Order*"); *Applications of Ameritech
    Corp. and SBC Communications Inc. for Transfer of Control*, CC
    Docket No. 98-141, Memorandum Opinion and Order, 14 FCC Rcd 14,712,
    ¶¶ 49-50 (1999); *Applications of MCI Communications Corporation and
    British Telecommunications P.L.C*, Memorandum Opinion and Order, 12
    FCC Rcd 15, 351, 15,367 ¶ 33 (1997) ("*BT/MCI Order*"));
    *Applications of WorldCom, Inc. and MCI Communications Corporation
    for Transfer of Control of MCI Communications Corporation to
    WorldCom, Inc.*, CC Docket No. 97-211, Memorandum Opinion and Order,
    13 FCC Rcd 18,025, 18,030-33, ¶¶ 9-12 (1998) ("*WorldCom/MCI
    Order*")). *See also* *Applications of SBC Communications, Inc, and
    BellSouth Corporation for Transfer of Control or Assignment*, WT
    Docket No. 00-81, Memorandum Opinion and Order, 2000 WL 1455744 at ¶
    13 (WTB/IB rel. Sept. 29, 2000) ("*SBC/BellSouth Order*");
    *Applications of Vodafone AirTouch* *and Bell Atlantic*
    *Corporation*, Memorandum Opinion and Order, 2000 WL 332670 (WTB/IB
    rel. Mar. 30, 2000) ("*Bell Atlantic/Vodafone AirTouch Order*");
    *Applications of Aerial Communications, Inc., and VoiceStream
    Wireless Holding Corporation for Transfer of Control*, Memorandum
    Opinion and Order 15 FCC Rcd 10,089, at ¶ 9 (WTB/IB rel. Mar. 31,
    2000) ("*VoiceStream/Aerial Order*").

[^25]: *Bell Atlantic/GTE Order*, FCC 00-221, at ¶ 22, n. 63;
    *WorldCom/MCI Order*, 13 FCC Rcd at 18,031 ¶ 10 n.33 (citing 47
    U.S.C. § 309(e) (burdens of proceeding and proof rest with the
    applicant) and *LeFlore Broadcasting Co., Inc.*, Docket No. 20026,
    Initial Decision, 66 F.C.C. 2d 734, 736-37 ¶¶ 2-3 (1975) (burden of
    proof is on licensee on issue of whether applicants have the
    requisite qualifications to be or to remain Commission licensees and
    whether grant of applications would serve public interest,
    convenience and necessity). *See also*, *SBC/BellSouth Order*, 2000
    WL 1455744 at ¶ 13; *Bell Atlantic/Vodafone AirTouch Order*, 2000 WL
    332670, at ¶ 13, n. 23;*VoiceStream/Aerial Order*, 15 FCC Rcd
    10,089, at ¶ 9, n. 20.

[^26]: *See Applications of NYNEX Corporation and Bell Atlantic
    Corporation*, Memorandum Opinion and Order, 12 FCC Rcd at 20,001,
    20,007, ¶¶ 29, 36 (1997) ("*Bell Atlantic/NYNEX Order*"); *BT/MCI
    Order*, 12 FCC Rcd at 15,367 ¶ 33. *See also* .*SBC/BellSouth
    Order*, 2000 WL 1455744 at ¶ 13; *Bell Atlantic/Vodafone AirTouch
    Order*, 2000 WL 332670, at ¶ 13, n. 24; *VoiceStream/Aerial Order*,
    15 FCC Rcd 10089, at ¶ 9, n. 21.

[^27]: *See SBC/BellSouth Order*, 2000 WL 1455744 at ¶ 14; *Bell
    Atlantic/Vodafone AirTouch Order*, 2000 WL 332670, at ¶ 14, n. 25;
    *VoiceStream/Aerial Order*, 2000 WL 339806, at ¶ 9, n. 22 (citing
    *MobileMedia Corporation et al.,* 14 FCC Rcd 8017 ¶ 4 (1999) (citing
    *Jefferson Radio Co. v. FCC,* 340 F.2d 781, 783 (D.C. Cir. 1964)).
    *See also* Stephen F. Sewell, "Assignments and Transfers of Control
    of FCC Authorizations Under Section 310(d) of the Communications Act
    of 1934," 43 Fed. Comm. L.J. 277, 339-40 (1991). The policy of not
    approving assignments or transfers when issues regarding the
    licensee's basic qualifications remain unresolved is designed to
    prevent licensees from evading responsibility for misdeeds committed
    during the license period. *Id.*

[^28]: *See* Nextel Petition at 3-5.

[^29]: *See In re applications of AirTouch Communications, Inc. and
    Vodafone Group*, *Plc*, Memorandum Opinion and Ord*e*r, DA 99-1200,
    1999 WL 413237 (WTB rel. June 22, 1999) at ¶¶ 5-9
    ("*Vodafone/AirTouch Order*").

[^30]: *See* 47 C.F.R. §§ 24.709, 24.839.

[^31]: *See* Nextel Petition at 2.

[^32]: *Id*. at 3-5.

[^33]: *See* TeleCorp/Tritel Applications, Agreement and Plan of
    Reorganization and Contribution by and Among TeleCorp PCS, Inc.,
    Tritel, Inc., and AT&T Wireless Services, Inc., dated as of Feb. 28,
    2000 ("Merger Agreement").

[^34]: *See* Nextel Petition at 6-7.

[^35]: *Id*. at 7.

[^36]: *Id*. at 7-8.

[^37]: Poka Lambro Petition to Deny at 4; Denton County Petition to Deny
    at 3; Zuma Petition to Deny at 4.

[^38]: Poka Lambro Petition to Deny at 7; Denton County Petition to Deny
    at 7; Zuma Petition to Deny at 7.

[^39]: Poka Lambro Petition to Deny at 10.

[^40]: Denton County Petition to Deny at 10; Zuma Petition to Deny at
    10.

[^41]: *See* TeleCorp Joint Opposition at 20-22; Opposition of Tritel
    Communications, Inc. to the Comments on or, in the Alternative,
    Petition to Deny of Nextel Communications, Inc., filed August 28,
    2000 at 1-2 ("Tritel Opposition"); Opposition of PolyCell
    Communications, Inc. to the Comments on or, in the Alternative,
    Petition to Deny of Nextel Communications, Inc., filed August 28,
    2000 at 1-2 ("PolyCell Opposition"); TeleCorp Motion to Strike at
    2-3.

[^42]: *See* Royal Wireless Opposition to Petition to Deny, filed August
    17, 2000 at 2-3 ("Royal Opposition"); Southwest Wireless, L.L.C.,
    Poka Lambro Ventures, Inc., Poka Lambro PCS, Inc., Poka Lambro/PVT
    Wireless Limited Partnership, and Denton County Electric
    Cooperative, Inc. Joint Opposition to Petition to Deny, filed August
    17, 2000 at 2-4 ("Southwest Opposition").

[^43]: 47 C.F.R. § 24.709. This rule section states the general
    eligibility requirements to hold C and F block PCS licenses.
    Eligibility to hold C and F block licenses is limited to an entity,
    that, together with its affiliates and persons or entities that hold
    interests in the entity and their affiliates, with gross revenues of
    less than \$125 million in each of the last two years and total
    assets of less than \$500 million. 47 C.F.R. § 24.709(a)(1). In
    calculating the revenues and assets thresholds, the Commission's
    rules permit entities to exclude the revenues and assets of some of
    its affiliates and attributable interest holders if the entity's
    control group is structured in a manner consistent with certain
    exceptions. 47 C.F.R. § 24.709(b). Eligibility must be maintained by
    any entity holding a C or F block PCS license for at least five
    years from the date of initial license grant, provided that a C/F
    block PCS licensee, together with its attributable interest holders,
    may exceed the gross revenues and total assets thresholds if any
    such increase is due to "nonattributable equity investments," as
    defined in section 24.709(a)(3) of the Commission's rules. 47 C.F.R.
    § 24.709(a)(3); *see also,* Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding, PP Docket 93-253, *Fifth
    Memorandum Opinion and Order*, 10 FCC Rcd 403, 420, ¶ 27 (1994)
    ("*Competitive Bidding Fifth MO&O*").

[^44]: *See* Zuma Petition to Deny at 4-7; Poka Lambro Petition to Deny
    at 4-7; Denton County Petition to Deny at 4-7.

[^45]: *See* Zuma Petition to Deny at 7-9; Poka Lambro Petition to Deny
    at 7-10; Denton County Petition to Deny at 7-9.

[^46]: *See* Zuma Petition to Deny at 7-8; Poka Lambro Petition to Deny
    at 8; Denton County Petition to Deny at 7-8. No objections were
    raised in the TeleCorp/Tritel transaction about Wisconsin
    Acquisition's eligibility, as assignee of the Indus C block license.

[^47]: *See* Royal Applications, Exhibit 1 at 2; Poka Lambro
    Applications, Exhibit 1 at 2-3; Denton County Application, Exhibit 1
    at 2; Public Interest Statement at 18-20.

[^48]: *Id*.

[^49]: *See* Royal Applications, Exhibit 1 at 2; Poka Lambro
    Applications, Exhibit 1 at 2-3; Denton Applications, Exhibit 1 at 2;
    Public Interest Statement at 18-20.

[^50]: *Id.*

[^51]: 47 C.F.R. § 24.839(a)(2). We note that the Commission recently
    modified its broadband PCS service and auctions rules, including its
    rules on eligibility for C and F block licenses, making certain
    licenses available in future auctions to non-entrepreneurs in "open"
    bidding, while other licenses remain available only to entrepreneurs
    in "closed" bidding. *See* *Amendment of the Commission\'s Rules
    Regarding Installment Payment Financing for Personal Communications
    Services (PCS) Licensees*, WT Docket No. 97-82, Sixth Report and
    Order, FCC 00-313, 2000 WL 1224710, ¶¶ 46-51 (2000) (\"*C Block 6th
    R&O*\").

[^52]: *See* TeleCorp Motion to Strike at 8-9. *See also* Royal
    Opposition at 6; Southwest Opposition at 7.

[^53]: *See* Opposition to Motion to Strike Reply Comments of Leaco
    Rural Telephone Cooperative, Inc. and Comanche County Telephone
    Company, Inc., filed Sept. 14, 2000, at 5-6 ("Leaco/Comanche County
    Opposition").

[^54]: *See* 47 C.F.R. § 24.709(a)(3).

[^55]: 47 C.F.R. § 24.720(g).

[^56]: *See* Nextel Petition at 2.

[^57]: *Id*.

[^58]: *See* Zuma Petition to Deny at 4-7; Poka Lambro Petition to Deny
    at 4-7; Denton County Petition to Deny at 4-7.

[^59]: *See* Zuma Petition to Deny at 6-7; Poka Lambro Petition to Deny
    at 6-7; Denton County Petition to Deny at 6-7.

[^60]: *See* Public Interest Statement at 17, n. 12; TeleCorp Joint
    Opposition at 7-8; Royal Opposition at 4; Southwest Opposition at 5.
    TeleCorp argues that "the only reason *any* \[total asset\] figure
    was provided was because the application could not be filed without
    placing some figure in that field on the ULS system." TeleCorp Joint
    Opposition at 8 (emphasis in original).

[^61]: *See* TeleCorp/Tritel Applications, FCC Form 603, Schedule A;
    Zuma Applications, FCC Form 603, Schedule A; Poka Lambro
    Applications, FCC Form 603, Schedule A; Denton County Application,
    FCC Form 603, Schedule A.

[^62]: *See* Public Interest Statement at 17, n. 12; Zuma applications,
    Exhibit 1 at 2, n.1; Poka Lambro applications, Exhibit 1 at 2, n.2;
    Denton County application, Exhibit 1 at 2, n. 2.

[^63]: *See* TeleCorp Motion to Strike at 5 and attached TeleCorp
    Balance Sheet. Leaco and Comanche County request that their
    arguments as to TeleCorp's eligibility (and permissible growth)
    contained in their petitions to deny the Zuma, Poka Lambro, and
    Denton County applications be incorporated in the TeleCorp/Tritel
    proceeding. *See* Leaco/Comanche County Reply Comments at 2

[^64]: *See* TeleCorp Motion to Strike at 4-8.

[^65]: *Id*. at 6.

[^66]: *Id*.

[^67]: *Id*. at 7.

[^68]: *Id*.

[^69]: *Id*.

[^70]: *Id*.

[^71]: *Id*. at n. 11.

[^72]: *See* 47 C.F.R. § 24.720(g).

[^73]: TeleCorp argues that it was unsure whether an electronic
    application would be accepted in the ULS system if the assets listed
    exceeded \$500 million on the Schedule A of the FCC Form 603. *See*
    TeleCorp Motion to Strike at 5. We note both that TeleCorp does not
    represent that it attempted to file the correct figures that were
    rejected by the ULS system, and that the ULS system will accept such
    applications.

[^74]: 47 C.F.R. §§ 24.720(f), (g).

[^75]: Nextel Petition at 3. Nextel does not specifically state this as
    its position. Based on our review of Nextel's petition, however, we
    extrapolate this as Nextel's position.

[^76]: *Id*. at 5.

[^77]: *Id*.

[^78]: *Id*. at 4-5. Nextel provides no supporting precedent for this
    argument.

[^79]: TeleCorp Joint Opposition at 8-9; Letter from Eric W. DeSilva,
    Counsel for Telecorp PCS, Inc., to Magalie Roman Salas, Secretary,
    Federal Communications commission, filed October 5, 2000 ("*October
    5^th^ Ex Parte*") at 7.

[^80]: Telecorp Joint Opposition at 9; *October 5^th^ Ex Parte* at 7.

[^81]: *October 5^th^ Ex Parte* at 2-3 (citing 47 C.F.R. § 24.720(k);
    *Competitive Bidding* *Fifth Report & Order*, 9 FCC Rcd. at 5605).

[^82]: *Id.* at 1-2.

[^83]: *Id.* at 3-6 (citing Fifth Amended and Restated Certificate of
    Incorporation of TeleCorp PCS, Inc. at section 4.9(b) ("TeleCorp
    Fifth Certificate of Incorporation")).

[^84]: *Id.* at 4 (citing TeleCorp Fifth Certificate of Incorporation at
    section 4.9(b)(iii)).

[^85]: *Id*. at 6.

[^86]: *Id* at 7.

[^87]: *Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at 5605.
    Although these indicia were articulated in the context of evaluating
    equity in non-corporate partnerships, we believe that they apply
    with equal force in this context. Further, the Commission's
    entrepreneurs' block rules incorporate these concepts. *See* 47
    C.F.R. § 24.720(k) (requiring that the control group entity have the
    right to receive dividends, profits, and regular and liquidating
    distributions from the business in proportion to the amount of
    equity held in the business).

[^88]: *See* Joint Proxy Statement-Prospectus at 26.

[^89]: *See* TeleCorp Fifth Certificate of Incorporation at section
    4.9(d).

[^90]: *Fox Television Stations, Inc*., 10 FCC Rcd 8452 (1995).

[^91]: In *Fox Television Stations, Inc*.*,* a single foreign investor
    in the licensee\'s parent company owned common stock constituting
    only twenty-four percent of both the voting power and all stock
    issued by the corporation. The common stock, however, also had the
    right to virtually all of the profits and, upon liquidation, the
    assets of a the company. *See* 10 FCC Rcd at 8474, ¶ 48. The
    Commission concluded that \"where the ownership of corporate shares
    does not correspond to the beneficial ownership of the corporation,
    we will not be bound by a formalistic \'count‑the‑shares\' approach
    that understates the true extent of foreign ownership." *Id.*

[^92]: In another case involving tracking stock, the Commission based a
    finding of attribution for purposes of the CMRS spectrum aggregation
    limit on the specific percentage of tracking stock holdings rather
    than the percentage of shares owned in the parent issue. *See
    TCI-AT&T*, 14 FCC Rcd 3160, 3208 ¶ 99 (1999). In that case, TCI's
    holdings of 23.8 percent of Sprint Corp.'s tracking stock in Sprint
    PCS led the Commission to attribute to TCI and post-merger AT&T all
    of Sprint's CMRS licenses. *Id.*

[^93]: *See Algreg Cellular Engineering*, 12 FCC Rcd 8148 (1997). In
    *Algreg*, the Commission approvingly cited the definition of
    "equity" from Fletcher's Cyclopedia that "\[e\]quity securities
    represent ownership rights which, in varying degrees, depending on
    the type of equity security, entitle the holder to a right to
    participate in surplus profits, and, upon dissolution, to share in
    those assets that remain after all debts have been paid." *See* 12
    FCC Rcd at 8164. Thus, the Commission has implicitly subscribed to
    the common understanding that the nature of rights as equity is not
    diminished because they are subsidiary or junior to rights of
    certain other parties.

[^94]: *See* Nextel Petition at 4.

[^95]: Nextel Petition at 4.

[^96]: *See* TeleCorp Fifth Certificate of Incorporation at section
    4.9(b)(ii). This clause in unredacted form restricts on payment of
    dividends to "the lesser of (A) the funds of the Corporation legally
    available therefor and (B) Tracked Business Available Dividend
    Amount." *Id.* The restriction contained in subsection (A) of this
    provision is common for corporations and merely prevents TeleCorp
    from payment of dividends that would cause it to become insolvent.
    Notably, the same restriction applies to the payment of dividends on
    non-tracked common stock. *Id.* at section 4.9(b)(i).

[^97]: *Competitive Bidding Fifth Report &Order*, 9 FCC Rcd at 5604-5605
    ¶ 165.

[^98]: Nextel Petition at 5.

[^99]: *See October 5^th^ Ex Parte* at 6-7.

[^100]: 47 U.S.C. § 309(j)(4)(E).

[^101]: *See* Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding, *Second Report and Order*, 9 FCC Rcd 2348,
    2394, ¶ 258 (1994) ("*Competitive Bidding Second Report and
    Order")*; *see also*, *Competitive Bidding Fifth Report and Order*,
    9 FCC Rcd at 5592, ¶ 136.

[^102]: *Competitive Bidding Second Report and Order*, 9 FCC Rcd at
    2395, ¶ 264; C*ompetitive Bidding Fifth MO&O*, 10 FCC Rcd at 469 ¶
    127; 47 C.F.R. § 1.2111(d).

[^103]: Nextel Petition at 6.

[^104]: In a similar situation, the Bureau found that acquisition of
    fifty percent of the equity in the parent of a licensee constituted
    a *pro forma* transfer of control because *de facto* control
    remained with the party who had held 100 percent before the
    transaction. *See Wireless Telecommunications Bureau and
    International Bureau Complete Review of Proposed Investment by
    Teléfonos de México, S.A. de C.V. in Parent of Cellular
    Communications of Puerto Rico*, Public Notice, DA 99-2286 (rel. Oct.
    22, 1999).

[^105]: *See* File Nos. 0000117757, 0000117768, 0000117802,
    50005-CW-AL-00, and 50006-CW-TC-00.

[^106]: *See* File Nos. 0000123402, 0000117340, 00000123380, 0000178796;
    0000178897, 0000177844, 0000179413, 0000163408, and 0000163410.

[^107]: *See* *C Block 6th R&O*, 2000 WL 1224710 at ¶ 51.

[^108]: Nextel Petition at 8.

[^109]: Public Interest Statement at 20-21; TeleCorp Joint Opposition at
    19.

[^110]: Public Interest Statement at 21; TeleCorp Joint Opposition at
    19-20.

[^111]: *See Competitive Bidding* *Fifth MO&O*, 10 FCC Rcd at 468, ¶
    125.

[^112]: *Id.* (". . . we wish to clarify the application of our holding
    rule to our financial caps."). *See also* 47 C.F.R. § 24.709(a) (a C
    or F block applicant (together with its affiliates and persons or
    entities that hold interests in the applicant and their affiliates)
    must have gross revenues of less than \$125 million in each of the
    last two years and total assets of less than \$500 million at the
    short-form deadline).

[^113]: Specifically, the holding rule, Section 24.709(a)(3), allows
    licensees to maintain their eligibility despite growth beyond the
    size limitations for entrepreneur block eligibility, provided that
    increased gross revenues or increased total assets is due to
    \"nonattributable equity investments . . . , debt financing, revenue
    from operations or other investments, business development or
    expanded service.\"

[^114]: *Competitive Bidding Fifth MO&O*, 10 FCC Rcd at 468, ¶ 126;
    *see* Public Interest Statement at 20-21.

[^115]: The first sentence of the applicable paragraph states that "we
    clarify that between years four and five we will allow licensees to
    transfer a license to any entity that either holds other
    entrepreneur block licenses (and thus at the time of auction
    satisfied the entrepreneurs' block criteria) or that satisfies the
    criteria at the time of transfer." *Competitive Bidding Fifth MO&O*,
    10 FCC Rcd at 468, ¶ 126.

[^116]: *See* 47 C.F.R. § 1.2111(b); *Competitive Bidding Fifth MO&O*,
    10 FCC Rcd at 466, ¶ 119. *See also, Competitive Bidding Second
    Report andOrder*, 9 FCC Rcd at 2394, ¶¶ 258-65 (indicating that
    Commission would adopt different methods to prevent abuse and unjust
    enrichment with respect to designated entity set-asides, installment
    payments, and bidding credits) and *Competitive Bidding Fifth Report
    and Order*, 9 FCC Rcd at 5588-89, ¶ 128-29 (creating five-year
    holding period and limited transfer period to prevent winners in
    closed set-aside auctions from being unjustly enriched by early
    license transfers to non-entrepreneurs).

[^117]: *See* Amendment of Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, *Memorandum Opinion and Order*, 14 FCC Rcd 20543, 20545-46
    (1999) ("*Omnipoint Waiver Order*") (the Commission indicated that
    paragraph 127 addresses unjust enrichment with respect to bidding
    credits).

[^118]: *Competitive Bidding Fifth MO&O*, 10 FCC Rcd at 469, ¶ 127.

[^119]: *See Omnipoint Waiver Order*, 14 FCC Rcd at 20545-46.

[^120]: *D&E Communications, Inc. Request for Waiver of Sections 24.712,
    24.720(b)(1), 1.2111(d), and 24.839(a) of the Commission\'s Rules
    Regarding Eligibility to Acquire License as a Small Business,* Order
    , 15 FCC Rcd 61 ("*D&E* *Communications Order*").

[^121]: *Id.* at 67.

[^122]: *See* 47 C.F.R. § 1.925(b)(3).

[^123]: 47 C.F.R. § 24.839(a)(2).

[^124]: *See* 47 C.F.R. § 1.2111(a). Specifically, this section states
    that "an applicant seeking approval for a transfer of control or
    assignment (otherwise permitted under the Commission's Rules) of a
    license within three years of receiving a new license through a
    competitive bidding procedure must, together with its application
    for transfer of control or assignment, file with the Commission's
    statement indicating that its license was obtained through
    competitive bidding. Such applicant must also file with the
    Commission the associated contracts for sale, options agreements,
    management agreements, or other documents disclosing the local
    consideration that the applicant would receive in return for the
    transfer or assignment of its license ... This information should
    include not only a monetary purchase price, but also any future,
    contingent in-kind, or other consideration (e.g., management or
    consulting contracts wither with or without an option to purchase;
    below market financing)." *Id*.

[^125]: *See* Zuma Petition to Deny at 10-11; Denton County Petition to
    Deny at 10-11. We note that Leaco and Comanche County have not
    raised objections with regard to the Poka Lambro Applications,
    although the purchase price also has been redacted from those
    applications. *See* Poka Lambro Asset Agreement at section 2.2.
    Likewise, no party has raised a section 1.2111(a) objection with
    respect to the TeleCorp/Tritel Applications.

[^126]: *See* Zuma Petition to Deny at 10-11; Denton County Petition to
    Deny at 10-11.

[^127]: *See* Royal Opposition at 7-8; Southwest Opposition at 8-9.

[^128]: *See* *Competitive Bidding Second Report and Order*, 9 FCC Rcd
    at 2385 (citing H.R. Rep. No. 103-111 at 257).

[^129]: *Id*.

[^130]: *Id.* at 2386; *see also* 47 C.F.R. § 0.459.

[^131]: *See* Poka Lambro Petition to Deny at 10-11.

[^132]: *See* Poka Lambro applications, Exhibit 2 (Asset Purchase
    Agreement among Poka Lambro Telephone Cooperative, inc., Poka Lambro
    PCS, Inc., Poka Lambro Ventures, Inc., Poka Lambro/PVT Wireless
    limited Partnership, and Southwest Wireless, L.L.C., Dated as of
    June 12, 2000, at Section 10.1 ("Poka Lambro Asset Agreement")).
    Section 10.1 ("Buy-Back Option") defines unconstructed as those
    licenses for which Southwest has not "erected or otherwise caused
    the placement or positioning of cell sites capable of covering at
    least 30% of the POPs in the territory covered by such Option
    License." *Id*. Further, Southwest may extend the option period by
    an additional two years. *Id.*

[^133]: 47 U.S.C. § 301.

[^134]: *See* Poka Lambro Petition to Deny at 10.

[^135]: *Id*. at 11. Section 10.4 of the Poka Lambro Asset Agreement
    provides that Southwest and Poka Lambro will negotiate a management
    agreement, whereby Poka Lambro will manage the licenses. *See* Poka
    Lambro Asset Agreement at Section 10.4.

[^136]: *See* Southwest Opposition at 9-10 (citing *Application of Kirk
    Merkley, Receiver, For Involuntary Assignment of License of Station
    KPRQ, Murray, Utah*, Memorandum Opinion and Order, 94 F.C.C. 2d 829
    (1983) ("*Merkley*")). In *Merkley*, the Commission found that the
    reversionary interest at issue contradicted its policy because it
    treated "the broadcast licenses as the property of the former
    licensee, Wilkinson. The provision allows him to 'take possession of
    the license, reestablishing him in his 'first and former estate.'
    Second, it provides Wilkinson a right to the license in excess of
    the license term . . . Finally, contract provisions also allow the
    former licensee to take control of the license without seeking prior
    Commission approval. Specifically, the agreements allow Wilkinson to
    take possession 'without legal processes.'" *See* 94 F.C.C. 2d at
    839 ¶ 19 and n. 10.

[^137]: *See* Southwest Opposition at 10.

[^138]: *Id*. at 11.

[^139]: *See* 47 C.F.R. § 24.203.

[^140]: *See* 47 C.F.R. § 24.203(a) and (b).

[^141]: The Buy-Back Option is only exercisable within a 90-day period
    which begins two years from the date of closing of the Poka
    Lambro/Southwest underlying transaction. *See* Poka Lambro Asset
    Agreement at Section 10.1.

[^142]: *See* *Merkely*, 94 F.C.C. 2^nd^ at 839 ¶ 19 and n. 10; *see
    also* *Churchill Tabernacle v. FCC*, 160 F. 2d 244 (1947)
    ("*Churchill Tabernacle*"). In *Churchill Tabernacle*, the
    prohibited reversionary interest at issue gave the holder of the
    reversionary interest the "unfettered use and control" of broadcast
    facilities, the "sole and absolute" use of certain broadcast periods
    for nearly 100 years, and upon written notice of the interest
    holder, "all right, title and interest in the property, including
    the operating license" would revert to the interest holder. *See*
    160 F. 2d at 245-246.

[^143]: *See Application of Bill Welch for Commission Consent to
    Transfer Control of the Florence, Alabama Non-Wireline Cellular
    Permit to McCaw Communications of Florence, Inc.*, Memorandum
    Opinion and Order, 3 FCC Rcd 6502, 6503 at ¶ 14 (1988).

[^144]: We note that the 1996 amendments to the Communications Act were
    specifically intended to produce competitive telecommunications
    markets. *AT&T Corporation, et al., v. Iowa Utils. Bd.,* 525 US 366,
    371 (1999).

[^145]: Our determination of the affected markets requires us to
    identify the applicants' existing and potential product offerings,
    and may require us to determine which products offered by other
    firms compete or potentially compete with these offerings.

[^146]: Depending on circumstances, this step may include the
    identification of market participants and analysis of market
    structure, market concentration, and potential entry.

[^147]: These include but may extend beyond factors relating to cost
    reductions, productivity enhancements, or improved incentives for
    innovation*. See* *Bell Atlantic/NYNEX Order*, 12 FCC Rcd at 20,014,
    ¶ 49; *BT/MCI Order*, 12 FCC Rcd at 15,368, ¶ 35). *See also*,
    Horizontal Merger Guidelines Issued by the U.S. Department of
    Justice and the Federal Trade Commission, 57 Fed. Reg. 41,552, §§
    2.1, 2.2, 4 (dated Apr. 2, 1992, as revised, Apr. 8, 1997).

[^148]: With respect to the provision of commercial communications
    services, TeleCorp, through its subsidiaries also holds LMDS
    licenses. *See* Public Interest Statement at 5. TeleCorp, through
    other affiliates, also recently obtained 39 GHz licenses. *See* *The
    Wireless Telecommunications Bureau Announces the Grant of 1961
    License to Operate in the 39 GHz Band*, Public Notice, DA 00-2379
    (rel. Oct. 20, 2000). No competitive issues are raised with respect
    to these licenses, however, because Tritel does not hold licenses in
    this service, nor does it provide any service that competes with the
    service TeleCorp would provide with these licenses.

[^149]: *See* June 2000 Supplement at 12, 16.

[^150]: *See* *generally* 47 C.F.R. §§ 20.6(d) and 22.942(d).

[^151]: We note that there are number of other entities owned or
    controlled by Messrs. Vento and Sullivan, which also hold Commission
    licenses. *See* FCC Ownership Disclosure Information for the
    Wireless Telecommunications Services (FCC Form 602) of TeleCorp PCS,
    Exhibit 1 and Exhibit 2, filed June 22, 2000. As explained below,
    ABC Wireless is the only entity attributable to TeleCorp that holds
    properties overlapping geographically with the licenses of Tritel.

[^152]: *See* Public Interest Statement at 14-15; June 2000 Supplement
    at 12-13.

[^153]: *See* Public Interest Statement at 15.

[^154]: *See* June 2000 Supplement at 17. According to the applicants,
    the footprints of TeleCorp and Tritel overlap by only 10 MHz in
    Montgomery County, Mississippi in the Memphis, TN BTA (BTA290).
    *Id*.

[^155]: *See* *id*. at 17-33.

[^156]: *See id*. at 17-22.

[^157]: *Id*. at 12.

[^158]: *See* *Applications of VoiceStream Wireless Corp. or Omnipoint
    Corp and VoiceStream Wireless Holding Co., Cook Inlet/VS GSM II PCS,
    LLC or Cook Inlet/VS GSM III PCS, LLC*, Memorandum Opinion and
    Order, 15 FCC Rcd 3341, ¶ 26; *see also*, *VoiceStream/Aerial
    Order*, 15 FCC Rcd 10,089, at ¶ 32.

[^159]: *See* Wireless Telecommunications Bureau Grants Consent to
    Assign C and F Block Broadband PCS Licenses, Public Notice, *Public
    Notice*, DA 00-2322 (rel. Oct. 12, 2000).

[^160]: *See* June 2000 Supplement at 17, n. 23 and 33-35.

[^161]: *See* 47 C.F.R. § 20.6; *see also* June 200 Supplement at 18-22.

[^162]: *See* Public Interest Statement at 12-13; June 2000 Supplement
    18-20.

[^163]: 47 C.F.R. §§ 20.6(a), 22.909.

[^164]: *Id*.

[^165]: *See* 47 C.F.R. § 20.6(e)(1).

[^166]: *See* June 2000 Supplement at 15.

[^167]: *Id*.

[^168]: *Id*.

[^169]: *See Bell Atlantic/NYNEX Order*, 12 FCC Rcd at 20,063 ¶ 157.

[^170]: The required international section 214 authorizations and any
    related international service issues in the TeleCorp/Tritel
    transaction are being addressed by the International Bureau in a
    separate proceeding. *See* *Streamlined International Applications
    Accepted for Filing*, Public Notice, File No.
    ITC-214-20001016-00596, Report TEL-00306S (rel. Oct. 27, 2000).