Before the

######### Federal Communications Commission

######### Washington, D.C. 20554

In re Applications of )

)

AIRTOUCH COMMUNICATIONS, INC. )

Transferor, )

)

AND ) File Nos. 0000003690, *et al.*

)

VODAFONE GROUP, PLC. )

Transferee, )

)

For Consent to Transfer of Control of )

Licenses and Authorizations )

**MEMORANDUM OPINION AND ORDER**

Adopted: June 21, 1999 Released: June 22, 1999

By the Chief, Wireless Telecommunications Bureau:

# TABLE OF CONTENTS {#table-of-contents .unnumbered}

[Paragraph]{.underline}

I. INTRODUCTION AND EXECUTIVE SUMMARY 1

II\. DISCUSSION 4

A. Statutory Authority 4

B. Qualifications 5

1.  Transferor 5

2.  Transferee 7

    C. Public Interest Analysis 10

    1\. Competitive Framework 11

    2\. Analysis of Potential Adverse Effects 12

    a\. Mobile Telephone Services 13

```{=html}
<!-- -->
```
b.  International Services 15

    3\. Public Interest Benefits 19

    4\. Executive Branch Concerns 20

    III\. CONCLUSION 25

    IV\. ORDERING CLAUSES 26

    APPENDIX A

#  INTRODUCTION and Executive Summary

1 On February 5, 1999, AirTouch Communications, Inc. ("AirTouch") and
Vodafone Group, Plc. ("Vodafone") (collectively, "Applicants") filed
applications pursuant to sections 214 and 310 of the Communications Act
of 1934, as amended ("the Act"),[^1] seeking Commission consent to
transfer control of AirTouch's licenses and authorizations to Vodafone.
Applicants intend to accomplish this transaction through a "reverse
triangular" merger in which the shareholders of AirTouch will transfer
their stock to Vodafone in exchange for cash and Vodafone stock.
AirTouch will merge with a Vodafone subsidiary and Vodafone will then
change its name to Vodafone AirTouch Plc. After the merger, the former
Vodafone and AirTouch shareholders will each own approximately 50
percent of the new Vodafone AirTouch and will share equally the power to
appoint members to the Board of Directors.

2 AirTouch is among the largest wireless operators in the United States,
serving approximately 11.8 million U.S. subscribers. The company
provides cellular, paging, and personal communications services in 13
countries worldwide, serving more than 17 million customers. AirTouch's
revenues for the twelve-month period ending September 30, 1998 were
\$7.1 billion.[^2] Vodafone is a leading global provider of mobile
telecommunications services, with cellular network interests in Europe,
Africa, and Australasia. Vodafone's revenues for the twelve-month period
ending September 30, 1998 were £2,870 million. The merger will create a
global wireless company with a combined market capitalization of about
\$110 billion.[^3]

3 On February 8, 1999, the Wireless Telecommunications Bureau
("Bureau"), by delegated authority,[^4] issued a Public Notice to
announce that the applications had been accepted for filing, and to
establish a pleading cycle to permit interested parties an opportunity
to comment on the proposed transaction.[^5] In response to this Public
Notice, two parties filed Petitions to Deny or Condition the grant of
authorization and five parties filed Comments.[^6] As explained below,
we find that the proposed merger between AirTouch and Vodafone poses no
risk of harm to U.S. telecommunications markets and would permit the
merged companies to generate significant efficiencies that would likely
result in expanded service options at competitive prices. Accordingly,
we find that pursuant to sections 214(a), 310(b) and 310(d) of the
Communications Act, as amended ("the Act"), grant of the pending
requests for transfer of control would serve the public interest. Hence,
we deny the petitions and grant the applications with conditions as
discussed below.

#  Discussion

## Statutory Authority

4 Pursuant to section 214(a) of the Act, the Commission must determine
whether the Applicants have demonstrated that their proposed transaction
will serve the public interest, convenience and necessity.[^7] 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."[^8] Section 310(d) also requires the Commission to consider
the license transfer 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.[^9]

## Qualifications

### Transferor

5 In evaluating assignment and transfer applications under section
310(d) of the Act, we do not re-evaluate the qualifications of the
assignor or transferor unless issues related to their basic
qualifications have been designated for hearing by the Commission.[^10]
In this case, certain parties have filed oppositions to the merger
generally alleging that their pending disputes with AirTouch raise
questions as to AirTouch's character qualifications that should be
resolved in a hearing before AirTouch can be permitted to transfer
control of its licensees. AirTouch's basic qualifications are not
currently in question; none of the petitioners raised a substantial and
material question of fact that would warrant designating for hearing
AirTouch's basic qualifications as a licensee.

6 We dismiss allegations raised by Eastern Airwaves and Desert Mobile
regarding applications to serve unserved cellular areas because the
dispute cited as a basis for their comments has been resolved by the
Commission in AirTouch's favor.[^11] Next, we dismiss allegations raised
by Rinker stemming from a commercial dispute over a paging license
because we addressed these issues when we granted AirTouch's application
to partially assign that paging license to Schuykill, an entity
unrelated to Vodafone.[^12] Finally, we find that a pending private
action involving a patent infringement claim raised by CommServ,[^13]
and a possible partnership dispute raised by Crown,[^14] are private
matters that are not relevant to exercising our section 310(d) authority
but, rather, are best resolved in courts of competent jurisdiction.[^15]
Moreover, these pending disputes do not appear to relate to the type of
anti-competitive conduct that the Commission considers as a relevant
character qualification in licensing.[^16] Therefore, we find that the
allegations based on these parties' disputes with AirTouch should not
preclude grant of this application.

### Transferee

7 As a regular part of our public interest analysis, we must determine
whether the proposed licensee is qualified to hold a Commission license
and whether grant of the application would result in the proposed
licensee violating any Commission rules. As a result of this proposed
merger, Vodafone, which is chartered in the United Kingdom, will
indirectly own more than 25 percent of current AirTouch subsidiaries
that hold common carrier radio licenses.[^17] Under section 310(b)(4) of
the Act, we analyze whether the public interest would be served by
denying the assignment or transfer of control of those licenses to
Vodafone.

8 According to Applicants, approximately 60 percent of the shares of the
merged company will be held by U.S. citizens, 32 percent by U.K.
citizens, and eight percent by citizens of other countries. Applicants
state also that it would not be unreasonable to expect a flow-back of
equity to the United Kingdom,[^18] resulting in U.S. citizens and U.K.
citizens holding approximately equal percentages of stock.[^19]

9 Because the United Kingdom is a Member of the World Trade Organization
(WTO), under the Commission's *Foreign Participation Order*, we presume
that the public interest would be served by authorizing, under section
310(b)(4), common carrier radio licenses held by entities indirectly
owned by Vodafone and citizens of the United Kingdom.[^20] No party has
raised an argument rebutting this presumption, and we are aware of no
other reason to rebut the presumption here. Also pertaining to
Vodafone\'s qualifications, we note that the CWA filed reply comments,
though not initial comments, suggesting that this transaction is
structured to "skirt" the U.S. tax code. Additionally, on April 20,
1999, AirTouch filed a copy of a letter from the Internal Revenue
Service evaluating the proposed transaction under the U.S. tax code. We
do not find that CWA's unsupported allegations justify denying the
Applications, and we find nothing in the record on this issue that would
justify denying the Applications. Therefore, we find, pursuant to
section 310(b)(4), that Vodafone and its U.K. shareholders may acquire
up to 100 percent indirect ownership of the AirTouch subsidiaries
holding common carrier radio licenses.

## Public Interest Analysis

10 In addition to ensuring that transferor and transferee are duly
qualified and comply with our rules, we also consider, as part of our
examination under the "public interest, convenience, and necessity"
standard of section 310(d) of the Communications Act, the effects on
competition of a proposed transfer of control.[^21] At a minimum, this
requires that a merger not interfere with the objectives of the
Communications Act and must include, among other things, consideration
of the possible competitive effects of the transfer.[^22] Under
Commission precedent, our public interest analysis is not limited to
traditional antitrust principles,[^23] but also encompasses the broad
aims of the Communications Act,[^24] including evaluating whether any
public interest benefits may result from the merger.[^25] Applicants
bear the burden of proving that the proposed transaction serves the
public interest,[^26] and we must determine whether they have met this
burden.[^27]

### Competitive Framework

11 Where the transfer or assignment of licenses involves
telecommunications service providers, the Commission's public interest
determination must be guided primarily by the Communications Act, as
amended.[^28] In cases such as this that involve an international
carrier, we are guided also by the U.S. Government's commitment under
the WTO Basic Telecommunications Agreement, which seeks to promote
global markets for telecommunications so that consumers may enjoy the
benefits of competition.[^29] Our analysis of competitive effects under
the Commission's public interest standard consists of four steps. First,
we define the relevant product and geographic markets.[^30] Second, we
identify current and potential participants in each relevant market,
especially those that are likely to have a significant competitive
effect. Third, we evaluate the effects that the merger may have on
competition in the relevant markets.[^31] Fourth, we consider whether
the proposed transaction will result in merger-specific efficiencies,
such as cost reductions, productivity enhancements, or improved
incentives for innovation.[^32] Ultimately, we must weigh any harmful
and beneficial effects to determine whether, on balance, the merger is
likely to enhance competition in the relevant markets.

### Analysis of Potential Adverse Effects

12 To determine the relevant product and geographic markets, we identify
the services offered by Vodafone and AirTouch and evaluate the extent to
which services offered by other communications companies compete for the
business conducted by the merging parties. According to the Applicants,
Vodafone owns interests in companies providing mobile telecommunications
services in Europe, Africa, and the South Pacific region. [^33] AirTouch
also provides mobile communications services, serving the United States,
Europe, Africa, and Asia.[^34] AirTouch is also authorized to provide
international services.

#### Mobile Telephone Services

13 Both companies are focused on providing wireless communications
services. Vodafone does not currently provide service in the United
States. Based on the record, we find no evidence that AirTouch and
Vodafone compete against each other in any markets within the United
States, including any relevant U.S. wireless market.[^35]

14 We recognize the possibility that AirTouch and Vodafone might have
become competitors in the U.S. wireless communications sector at some
future date, and that this merger eliminates any such prospects. There
is, however, no information on the record suggesting that Vodafone had
plans to enter the U.S. market prior to its bid to acquire AirTouch.
Moreover, any other avenue for Vodafone to enter the U.S. market would
generally have required it to acquire licensed spectrum from an existing
licensee, as it is doing here, thereby offsetting some of the benefits
of its entry.[^36] Under the circumstances of this case, therefore, we
are not concerned by the elimination of a potential competitor.

#### International Services 

15 AirTouch is currently authorized to resell international switched
telecommunications services.[^37] A wholly-owned subsidiary of AirTouch,
AirTouch Cellular, is also authorized to resell international switched
telecommunications services.[^38] In addition, AirTouch is a 50-percent
indirect owner of, and general partner in, PrimeCo Personal
Communications, L.P., which is currently authorized to resell
international switched telecommunications services.[^39] Vodafone holds
no section 214 authorizations. No party filed in opposition to the
Applicants' request that we transfer control of AirTouch's international
section 214 authorizations to Vodafone. We find no basis in this record
to conclude that the proposed merger would have anti-competitive effects
in any U.S. international services market.

16 Pursuant to section 63.18(h)(1) of the Commission's rules,[^40]
Applicants have certified that after the merger Vodafone AirTouch and
its subsidiaries will become affiliated with the following foreign
carriers: Vodafone Network Pty Limited (Australia); Misrfone
Telecommunications Company SAE (Egypt); Vodafone Fiji Limited (Fiji);
Panfon SA (Greece); Vodafone Malta Limited (Malta); Vodafone New Zealand
Limited (New Zealand); Vodacom Pty Limited (South Africa); Libertel BV
(the Netherlands); Celtel Limited (Uganda); and Vodafone Limited (United
Kingdom). These affiliations raise the issue of whether it is necessary
to impose our international "dominant carrier" safeguards on Vodafone
AirTouch and its subsidiaries in their provision of service to any of
these affiliated routes. In general, the Commission imposes its
international dominant carrier safeguards on a U.S. carrier's provision
of service on a particular route where an affiliated foreign carrier has
sufficient market power to affect competition adversely in the U.S.
market.[^41] A U.S. carrier will presumptively be classified as
non-dominant on an affiliated route if the carrier demonstrates that the
foreign affiliate lacks 50-percent market share in the international
transport and local access markets on the foreign end of the route.[^42]

17 Applicants request that Vodafone AirTouch be regulated as a
non-dominant international carrier on all routes because each foreign
affiliate lacks sufficient market power to affect competition adversely
in the U.S. market. Applicants support their claim by stating that each
affiliate holds significantly less than a 50-percent market share in the
international transport and local access markets on the foreign end of
each route. No party disputes Applicants' certifications or other
information.

18 There is no evidence in the record, and we are aware of no
information, that suggests the certifications and statements made by
Applicants with respect to its foreign affiliates are not credible.
Therefore, pursuant to section 63.10(a)(3) of the Commission's rules, we
grant the Applicants' request to be regulated as non-dominant on all
U.S. international routes, including those on which Vodafone AirTouch
will be affiliated with a foreign carrier.[^43]

### Public Interest Benefits

19 Applicants contend that the proposed merger will generate significant
efficiencies.[^44] Applicants argue that the merged company will be able
to achieve cost savings through the worldwide procurement of handsets,
transmission equipment, and other purchases. Research and development
costs will be amortized over a larger subscriber base, lowering the unit
costs of introducing next-generation services. Applicants also contend
that the merger will result in the adoption of global best
practices.[^45] Finally, Applicants argue that the merged company will
result in a global footprint that will significantly expand the coverage
available for marketing to global accounts. No party contests these
assertions. We determine that at least several of these claimed benefits
are likely to occur, although we are unable to gauge the relative
magnitude of these benefits based on the information in this
record.[^46] Largely because of the absence of any risk of public
interest harms, we conclude that Applicants have furnished sufficient
information regarding prospects for public interest benefits.

### Executive Branch Concerns

20 The Executive Branch has raised concerns regarding national security
and law enforcement in this proceeding, which, pursuant to the public
interest analysis articulated in the Commission's *Foreign Participation
Order*,[^47] we must consider. In comments filed with the Commission,
the Department of Defense ("DOD") states that there are national
security and law enforcement issues raised by the proposed merger and
transfer of control because it will result in complete foreign ownership
of a very large domestic telecommunications provider.[^48] Similarly, in
its comments on the proposed merger, the Federal Bureau of Investigation
("FBI"), through the Department of Justice ("DOJ"), voices concern
regarding national security, public safety, and law enforcement.[^49]

21 In *ex parte* communications, DOD, FBI and DOJ have raised particular
concerns relating to the prospective provision by AirTouch of Globalstar
satellite services within the United States.[^50] We determine that this
merger is not an appropriate forum for addressing such concerns because
the core concerns raised by these agencies are not directly or
fundamentally affected by the merger. We note, however, that AirTouch
must apply for and obtain a facilities-based section 214 authorization
prior to providing any service within the United States using the
Globalstar system. Such proceeding would afford an appropriate forum for
addressing these concerns.

22 Further, DOD, DOJ, FBI, and AirTouch (on behalf of both itself and
Vodafone) have informed the Commission that they have reached an
agreement that resolves the national security, law enforcement, and
public safety issues raised in the DOD, DOJ and FBI comments other than
those relating to the Globalstar system.[^51] The parties have submitted
a copy of the executed agreement (DOD/DOJ/FBI Agreement) and propose
that the Commission impose a specific condition requiring compliance
with the DOD/DOJ/FBI Agreement. In brief, the DOD/DOJ/FBI Agreement
provides that AirTouch facilities that are part of or are used to
direct, control, supervise, or manage all or any part of the domestic
telecommunications infrastructure owned, managed, or controlled by
AirTouch be located in the United States. Further, control of the
domestic telecommunications infrastructure and control over monitoring
and diagnosis of problems will be performed in the United States.
AirTouch agrees to take reasonable and appropriate measures to prevent
improper use of facilities used in the domestic telecommunications
infrastructure, specifically with respect to personnel holding sensitive
positions, information storage and access, and disclosures to foreign
entities. The parties have also agreed to adopt and maintain certain
policies with regard to confidentiality and security of electronic
surveillance orders and authorizations, orders, legal process, and
statutory authorizations and certifications related to subscriber
records and information. Finally, the parties have also agreed to
implement certain measures requiring personnel security clearances,
secure storage facilities, and the prevention of access by unauthorized
personnel to secure or sensitive network facilities and offices.

23 We note that the Agreement reflects a unique situation, and contains
certain terms that, if broadly applied, would have significant
consequences for the telecommunications industry. For example, the
Agreement includes a provision requiring operation "exclusively from a
facility located in the United States" of any satellite that the
Applicants control.[^52] This provision, as well as other provisions in
the Agreement, if viewed as precedent for other service providers and
potential investors, would warrant substantial further inquiry on our
part. Therefore, this Agreement does not establish a precedent for
future cases. However, notwithstanding these concerns about the
potential implications of some terms of this Agreement, we see no reason
to modify or disturb the Agreement of the parties on this matter.

24 In accordance with the request of these parties and the discussion
above, we condition our grant of the transfer of control of the AirTouch
licenses to Vodafone on compliance with the DOD/DOJ/FBI Agreement, a
copy of which is attached hereto as Appendix A.[^53]

#  CONCLUSION

25 Based upon our reviews under sections 214 and 310(d), we determine
that this merger will not likely result in harm to competition in any
relevant market. We also determine that the proposed merger will likely
result in several public interest benefits. We therefore conclude that,
on balance, Applicants have demonstrated that these transfers serve the
public interest, convenience, and necessity. Accordingly, we grant the
Applications, subject to the conditions set forth herein.

#  Ordering clauses

26 IT IS ORDERED, pursuant to sections 4(i) and (j), 214(a) and (c),
309, and 310(b) and (d) of the Communications Act of 1934, as amended,
47 U.S.C. §§154(i), 154(j), 214(a) and (c), 309, 310(b) and (d), that
the Petition to Deny or Condition and supporting pleadings filed by Karl
A. Rinker dba Rinker Communications, and Petition to Deny or Condition
Grant of Application filed by Crown Communications L.L.C. ARE DENIED.

27 IT IS ORDERED, that the authorizations and licenses related thereto
are subject to compliance with provisions of the Agreement between
Vodafone, AirTouch, and the United States Department of Defense, the
United States Department of Justice, and the United States Federal
Bureau of Investigation, dated June 18, 1999, which Agreement is fully
binding upon Vodafone and AirTouch and those subsidiaries, successors,
and assigns of both companies that provide telecommunications services
within the United States and that are not controlled by a U.S. entity.
Nothing in the Agreement is intended to limit any obligation imposed by
Federal law or regulation including, but not limited to, 47 U.S.C. §§
222(a) and (c)(1) and the Commission's implementing regulations.

28 IT IS ORDERED, that the Petition to Adopt Conditions to Authorization
and Licenses, filed by DOD, DOJ and the FBI on June 21, 1999, IS
GRANTED.

29 Accordingly, having reviewed the applications and the record in this
matter, IT IS ORDERED, pursuant to sections 4(i) and (j), 214(a) and
(c), 309, and 310(b) and (d) of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 154(i), 154(j), 214(a), 214(c), 309, 310(b),
310(d), that the applications filed by AirTouch Cellular Systems, Inc.
and Vodafone Group, Plc. in the above-captioned proceeding ARE GRANTED
subject to the above conditions.

FEDERAL COMMUNICATIONS COMMISSION

Thomas J. Sugrue

Chief, Wireless Telecommunications Bureau

[^1]: 47 U.S.C. §§ 214, 310(d), 310(b).

[^2]: AirTouch Communications, Inc., News Release, "Vodafone and
    AirTouch Merger To Create Global Mobile Wireless Leader," January
    17, 1999 (available at
    [http://www.app.airtouch.com](http://www.app.airtouch.com/)).

[^3]: *Id.*

[^4]: 47 C.F.R. § 0.331.

[^5]: *See* Public Notice, DA 99-304 (rel. Feb. 8, 1999). On April 29,
    1999, we issued an additional Public Notice announcing our
    acceptance of an application to transfer control of an air-ground
    license from AirTouch to Vodafone that had been inadvertently
    omitted from the original filing. *See* Public Notice, Report No.
    CWS-99-36, rel. Apr. 29, 1999. Consideration of this application is
    included in this Order. On May 27, 1999, we issued a second
    additional Public Notice announcing our acceptance of an additional
    application to transfer control of an AirTouch air-ground license
    that also had been inadvertently omitted from the previous Public
    Notices. *See* Public Notice, Report No. CWS-99-40, rel. May 27,
    1999. Because the period for filing petitions to deny with respect
    to this application does not end until June 28, 1999, the
    application may not be granted until June 29, 1999. *See* 47 U.S.C.
    § 309(b). In addition, on May 20, 1999, the *ex parte* status of
    this proceeding was changed from restricted to permit-but-disclose.
    *See* Public Notice, DA 99-304, rel. May 20, 1999.

[^6]: Petitions were filed by Crown Communications, L.L.C. and Karl A.
    Rinker dba Rinkers Communications. Comments were filed by U.S.
    Federal Bureau of Investigation, U.S. Department of Defense,
    Communications Information Services, Inc., and jointly by Eastern
    Airwaves, L.L.C. and Desert Mobile, L.L.C. The Communications
    Workers of America ("CWA") filed reply comments only.

[^7]: 47 U.S.C. § 214(a). *See Applications of WorldCom and MCI
    Communications Corporation*, 13 FCC Rcd 18,025, 18,030, at ¶ 8
    (1998) ("*MCI-WorldCom Order")*.

[^8]: 47 U.S.C. § 310(d).

[^9]: Section 308 provides that the Commission shall consider any such
    applications ". . . as if the proposed transferee or assignee were
    making application under Section 308 for the permit or license in
    question." 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."

[^10]: *See Mobilemedia Corporation et al.,* FCC 99-15 (rel. Feb. 5,
    1999) (citing *Jefferson Radio Co. v. FCC,* 340 F.2d 781, 783 (D.C.
    Cir. 1964)). This policy, often referred to as the *Jefferson Radio*
    policy, is designed to prevent licensees from evading responsibility
    for misdeeds committed during the license period. *See* 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, 340 (1991).

[^11]: *See Eastern Airwaves, L.L.C*., *Order,* DA 99-1164 (WTB, Policy
    and Rules Branch, rel. June 14, 1999); s*ee also* Comments to
    AirTouch/Vodafone Transfer of Control Applications filed by Eastern
    Airwaves, L.L.C. and Desert Mobile, L.L.C, filed Mar. 10, 1999.

[^12]: *See In the Matter of AirTouch Paging, Inc, Order*, DA 99-1175
    (WTB, Policy and Rules Branch, rel. June 16, 1999) (granting
    application to partially assign Paging Station KCC85 to Schuylkill
    Mobile Fone Inc.); *see also* Petition to Deny or Condition filed by
    Karl A. Rinker dba Rinker Communications, filed Mar. 10, 1999
    ("Rinker"). Rinker further argues that the merger applications are
    defective because a single paging call sign was omitted from the
    initial filing. We note that the ULS database was subsequently
    updated to reflect the correction and, as discussed above,
    appropriate public notices have been issued. We will not deny or
    delay consideration of the merger applications on this basis because
    the February 8, 1999 Public Notice specified that all of AirTouch's
    paging licenses and authorizations were being transferred to
    Vodafone and, therefore, provided sufficient notice to parties of
    the competitive implications of this transaction.

[^13]: Comments to AirTouch/Vodafone Transfer of Control Applications
    filed by Communications Information Services, Inc., filed Mar. 10,
    1999 (regarding civil suit against AirTouch and a company that
    installed cellular fraud deterrent systems on AirTouch facilities).

[^14]: *See* Petition to Deny or Condition Grant of Application filed by
    Crown Communications L.L.C., filed Mar. 10, 1999 (alleging that
    AirTouch is not providing sufficient information to its partners
    regarding the proposed merger).

[^15]: *See, e.g., Listeners Guild, Inc. v FCC*, 813 F.2d 465, 469 (D.C.
    Cir. 1987); *Applications of Centel Corp., Sprint Corp, and FW Sub
    Inc*., 8 FCC Rcd 1829, 1831 (1993) ("alleged violation of . . .
    partnership agreements amounts to a contractual dispute . . . and
    therefore is a matter for resolution by a private cause of action,
    rather than resolution by the Commission"). The Commission has
    consistently refused to interject itself into private matters,
    finding that a court, and not the Commission, is the proper forum
    for resolving such disputes. *MCI-WorldCom Order,* 13 FCC Rcd at
    18,148 (1998); *PCS 2000, L.P.*, 12 FCC Rcd 1681, 1691 (citing
    *United Tel. Co of Carolinas v. FCC*, 599 F.2d 720,732 (D.C. Cir.
    1977)).

[^16]: *See Policy Regarding Character Qualifications in Broadcast
    Licensing*, 102 F.C.C.2d 1179, 1195-97, 1200-03 (1986), *aff\'d on
    recon.*, 1 FCC Rcd 421 (1982), *modified*, 5 FCC Rcd 3252 (1990),
    *recon. granted in part*, 6 FCC Rcd 3448 (1991), *modified in part*,
    7 FCC Rcd 6564, 6566 (1992) (the Commission will consider only
    adjudicated non-FCC misconduct that involves violations of antitrust
    or other laws protecting competition). The Commission has
    consistently refused to interject itself into private matters,
    finding that a court, and not the Commission, is the proper forum
    for resolving such disputes. *MCI Telecommunications Corp.*, 3 FCC
    Rcd 509, 515 n.14 (1988) (character qualifications standards adopted
    in the broadcast context can provide guidance in the common carrier
    context).

[^17]: "Indirect" foreign ownership refers to ownership by a foreign
    entity of an entity that directly or indirectly owns all or part of
    the licensee.

[^18]: "Flow-back" refers here to an international shift in
    shareholdings that will likely result from both the delisting of
    AirTouch from the S&P 500 composite index, and the increased
    weighting that Vodafone AirTouch will be assigned in the FTSE Index
    in London following consummation of the merger. Letter from Jean L.
    Kiddoo and Eliot Greenwald to Magalie Roman Salas, filed May 5,
    1999.

[^19]: Application at Exhibit 3.

[^20]: *See Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market*, 12 FCC Rcd 23,891, 23,940 (¶¶ 111--112)
    (1997), *recon. pending* (Foreign Participation Order).

[^21]: *MCI-WorldCom Order,* 13 FCC Rcd at 18,030-33, ¶¶ 9-12 (1998).
    The Commission also has independent authority under Sections 7 and
    11 of Clayton Act to disapprove the acquisition of common carriers
    engaged in wire or radio communications or radio transmissions of
    energy in any line of commerce in any section of the country where
    the effects of such an acquisition may substantially lessen
    competition, or tend to create a monopoly. 15 U.S.C. §§ 18, 21(a).
    The Bureau, acting pursuant to delegated authority, 47 C.F.R. §
    0.331, chooses not to exercise its statutory authority under the
    Clayton Act in this case because the Commission's jurisdiction under
    the Communications Act is sufficient to address all questions
    regarding the competitive effects of the proposed transfer,
    including the issue of whether the transfer may substantially lessen
    competition or tend to create a monopoly. *See, e.g., Craig O. McCaw
    and American Telephone and Telegraph Company,* 9 FCC Rcd 5836
    (1994), *recon. denied on other grounds, Memorandum Opinion and
    Order on Reconsideration,* 10 FCC Rcd 11,786 (1995), *aff\'d sub
    nom. SBC Communications, Inc. v. FCC*, 56 F.3d 1484 (D.C. Cir.
    1995).

[^22]: *MCI-WorldCom Order*, 13 FCC Rcd at 18,030-33 ¶¶ 9-12.

[^23]: *See Satellite Business Systems*, 62 F.C.C.2d 997, 1069, 1088
    (1977), *aff'd. sub nom. United States v. FCC*, 652 F.2d 72 (D.C.
    Cir. 1980) (*en banc*).

[^24]: *MCI-WorldCom Order*, 13 FCC Rcd at 18,030 ¶ 9 (citing
    *Applications of NYNEX Corporation and Bell Atlantic Corporation*,
    12 FCC Rcd 19,985, 19,987 ¶ 2 & n.2 (1997) ("*Bell Atlantic-NYNEX
    Order*")).

[^25]: *Bell Atlantic-NYNEX Order*, 12 FCC Rcd at 20,063 ¶ 158*;
    Applications of MCI Communications Corporation and British
    Telecommunications P.L.C.*, 12 FCC Rcd 15,351, 15,367 ¶ 33 (1997)
    ("*BT-MCI Order*").

[^26]: *MCI-WorldCom 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)).

[^27]: *Bell Atlantic-NYNEX Order,* 12 FCC Rcd at 20,001, 20,007, ¶¶ 29,
    36; *BT-MCI Order,* 12 FCC Rcd at 15,367, ¶ 33.

[^28]: 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.,* 119 S. Ct.
    721, 724 (1999).

[^29]: The commitments undertaken as a result of the WTO basic
    telecommunications services negotiations are incorporated into the
    General Agreement on Trade in Services (GATS) by the Fourth Protocol
    to the GATS. *Fourth Protocol to the General Agreement on Trade in
    Services (WTO 1997),* 36 I.L.M. 354, 366 (1997). These commitments
    are colloquially referred to as the WTO Basic Telecom Agreement,
    though they are not technically contained in a stand-alone
    agreement.

[^30]: *See Bell Atlantic-NYNEX Order*, 12 FCC Rcd at 20,014, ¶ 49;
    *BT-MCI Order*, 12 FCC Rcd at 15,368, ¶ 35.

[^31]: Horizontal Merger Guidelines Issued by the U.S. Department of
    Justice and the Federal Trade Commission, 57 Fed. Reg. at 41,558 §§
    2.1, 2.2 ("Guidelines").

[^32]: *See* Horizontal Merger Guidelines Issued by the U.S. Department
    of Justice and the Federal Trade Commission (Revised, April 8, 1997)
    ("1997 Revised Guidelines").

[^33]: Application at Exhibit 3.

[^34]: AirTouch Communications, AirTouch Factbook: Mid-Year 1998, at
    2-3. AirTouch also holds minority investment interests in
    Globalstar, a satellite-based mobile phone system; in QUALCOMM, a
    U.S.-based telecommunications equipment manufacturer; and in IDC, a
    worldwide long distance telephone service. *Id*.

[^35]: We note also that, on May 25, 1999, the European Commission (EC)
    approved the merger between Vodafone and AirTouch. "Commission
    authorizes Vodafone and AirTouch to merge," IP/99/342 (Brussels, May
    25, 1999) (available in the Commission's reference room and at
    \<[http://europa.eu.int/rapid/start/c. .
    .txt](http://europa.eu.int/rapid/start/c. . .txt)\>). The EC
    concluded that there are only two Member States where both companies
    are active, Sweden and Germany. In Sweden, the EC found that both
    AirTouch and Vodafone have holdings in Europolitan, a mobile
    telephone operator, but that this shareholding overlap did not raise
    any competitive concerns. In Germany, the EC found that the merger
    would have given the merged company control over two of the four
    operators in the German market, D2 and E-Plus. According to the EC,
    these firms jointly would have had more than a 40-percent share of
    the German market. Vodafone agreed to sell its share in E-Plus to
    remove the EC's competitive concerns. Vodafone's sale of its stake
    in E-Plus eliminated any overlap in the German market for mobile
    telecommunications.

[^36]: Application at Exhibit 3.

[^37]: AirTouch Communications Inc., FCC File No. ITC-96-564, Public
    Notice Report No. I-8219 (rel. Dec. 5, 1996).

[^38]: AirTouch Cellular, FCC File No. ITC-94-275, Public Notice Report
    No. I-6990 (rel. June 24, 1994).

[^39]: PrimeCo Personal Communications, L.P., FCC File No. ITC-96-550,
    Public Notice Report No. I-8218 (rel. Dec. 5, 1996); PrimeCo
    Personal Communications, L.P., *Order, Authorization and
    Certificate*, DA 97-699, File No. ITC-96-635 (Int'l Bur., rel. April
    10, 1997).

[^40]: 47 C.F.R. § 63.18(h)(1).

[^41]: *See* 47 C.F.R. § 63.10(a)(3); *see also* *id*. § 63.10(c)
    (listing international dominant carrier safeguards).

[^42]: *See* *id* § 63.10(a)(3).

[^43]: 47 C.F.R. § 63.10(a)(1), (3) (1998) (providing that a U.S.
    carrier that is not affiliated with a foreign carrier in a
    particular country, or that is affiliated with a carrier that lacks
    sufficient market power in a particular country to affect
    competition adversely in the U.S. market, shall presumptively be
    classified as non-dominant).

[^44]: Application at Exhibit 2.

[^45]: *Id.* at Exhibit 3.

[^46]: *Bell Atlantic/NYNEX Order*, 12 FCC Rcd at 20,063 ¶157.

[^47]: *Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market, Report and Order and Order on
    Reconsideration,* 12 FCC Rcd 23,891 (1997).

[^48]: Comments of the Secretary of Defense, filed Mar. 10, 1999, at 2.

[^49]: Comments of the Federal Bureau of Investigation, filed Mar. 10,
    1999, at 2.

[^50]: Letter from Pamela Riley, AirTouch, to Magalie Roman Salas,
    Secretary, Federal Communications Commission, filed May 28, 1999
    (attaching Letter from Gary G. Grindler, Principal Associate Deputy
    Attorney General, DOJ, to Howard Shapiro, Wilmer, Cutler &
    Pickering, dated May 27, 1999).

[^51]: *Id*.

[^52]: *See* DOD/DOJ/FBI Agreement at Section 5.1.

[^53]: The agencies have filed the DOD/DOJ/FBI Agreement with a formal
    request that we condition our grant of Applicants' applications on
    Applicants' compliance with the Agreement, and we grant the
    agencies' petition. *See* Petition to Adopt Conditions to
    Authorization and Licenses, filed June 21, 1999.