**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WT Docket No. 05-63          |
|                                  | * |                              |
| Applications of Nextel           | ) |                              |
| Communications, Inc. and Sprint  | * |                              |
| Corporation                      | * |                              |
|                                  |   |                              |
| For Consent to Transfer Control  | * |                              |
| of Licenses and Authorizations   | * |                              |
|                                  | ) |                              |
| File Nos. 0002031766, *et al.*   | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: August 3, 2005 Released: August** **8**, **2005**

By the Commission: Commissioners Abernathy, Copps, and Adelstein issuing
separate statements.

Table of Contents

Heading Paragraph \#

I. Introduction 1

II\. Background 5

A. Description of the Applicants 5

1\. Nextel Communications, Inc. 5

2\. Sprint Corporation 8

B. Description of Transaction 11

C. Application and Review Process 14

1\. Commission Review 14

2\. Department of Justice Review 19

III\. Standard of Review and Public Interest Framework 20

IV\. Qualifications of applicants 24

V. PUblic interest Analysis 26

A. Mobile Telephony Competition 30

1\. Market Definition 37

a\. Product Market Definition 38

\(i\) Mobile Voice and Mobile Data Services 42

\(ii\) Residential and Enterprise Services 43

\(iii\) Nationwide and Local/Regional Services 44

\(iv\) Retail and Wholesale Markets 45

\(v\) Push-To-Talk (PTT) 46

b\. Geographic Market Definition 51

c\. Market Participants 58

d\. Input Market for Spectrum 61

2\. Initial Screen 62

3\. Coordinated Interaction 68

4\. Unilateral Effects 90

a\. Market Shares 92

b\. Product Differentiation and Substitutability 94

c\. Competitive Responses by Rivals 108

d\. Marginal Cost Reductions 115

e\. Conclusion 116

5\. Market-by-Market Evaluation 117

6\. Roaming 123

7\. Potential Public Interest Benefits 129

a\. Service Quality and Coverage 132

b\. Next Generation Service 134

c\. Economies of Scale and Operating Synergies 137

d\. Intermodal Competition 141

e\. Public Safety 144

B. 2.5 GHz Band 145

1\. Potential Public Interest Harm 152

a\. Mobile Data Services Market 152

b\. Fixed Broadband Services Market 167

2\. Potential Public Interest Benefits 168

C. Other Issues 170

1\. Petitions to Deny Based on the 800 MHz Rebanding Proceeding 170

2\. Sprint Contractual Dispute With US Unwired 180

3\. CWA's Petition to Impose Conditions 182

VI\. Conclusion 184

VII.ORDERING CLAUSES 186

APPENDICES

Appendix A: List of Commenters

Appendix B: List of Markets Identified for Further Analysis by Initial
Screen

Appendix C: Market-Specific Analysis

# Introduction

1.  In this Order, we consider applications filed by Nextel
    Communications, Inc. ("Nextel") and Sprint Corporation ("Sprint")
    (collectively, the "Applicants") for consent to transfer control of
    all licenses and authorizations held directly and indirectly by
    Nextel to Sprint.[^1] The Nextel licenses and authorizations include
    Specialized Mobile Radio Service ("SMR") licenses in the 800 and 900
    MHz bands and licenses in the 1.9 GHz band that enable the provision
    of mobile telephone and related data services, licenses in the
    Broadband Radio Service ("BRS") in the 2150-2162 MHz band and in the
    2500-2690 MHz band, spectrum leases in the BRS in the 2150-2162 MHz
    band and 2500-2690 MHz band, and spectrum leases in the Educational
    Broadband Service ("EBS") in the 2500-2690 MHz band.[^2] The
    Applicants contemplate that the operations and assets of Nextel and
    Sprint would be combined, and that the merged entity would continue
    to provide its services in these bands under both the Nextel and
    Sprint brand names. Under the license transfer application before
    us, wireless affiliates of Nextel and Sprint would not become part
    of the merged entity.[^3]

2.  The proposed merger of Nextel's SMR and 1.9 GHz licenses used in
    providing mobile telephony services with Sprint's broadband Personal
    Communications Service ("PCS") licenses would combine the licenses
    and operations of two large national wireless carriers that have
    overlapping coverage areas providing mobile telephony services
    throughout much of the United States. In this instance, the number
    of large nationwide carriers providing these services would be
    reduced from five to four. Because the proposed merger would combine
    largely overlapping mobile telephony coverage and services, these
    applications require us to examine the potential consequences of a
    merger that is largely horizontal in nature. In addition, the
    proposed combination of Nextel's and Sprint's holdings of BRS
    licenses and EBS leases in the 2.5 GHz band would result in
    geographic overlap in some parts of the country, while there would
    be significant areas of non-overlap in many other parts. Thus, the
    proposal to bring these BRS/EBS holdings together requires us to
    examine the potential consequences both of increasing the amount of
    BRS/EBS bandwidth controlled in certain markets, and of expanding
    the total geographic footprint covered by these licenses and leases.

3.  Pursuant to sections 214(a) and 310(d) of the Communications Act of
    1934, as amended ("Communications Act"), we must determine whether
    the Applicants have demonstrated that the proposed transfers would
    serve the public interest, convenience, and necessity.[^4] Based on
    the record before us, and as discussed more fully below, we find
    that the transaction meets this standard. We recognize that this
    transaction will represent a second major step in consolidation of
    nationwide mobile operators in the U.S. within the past year, and
    that it will increase concentration in many markets based on the
    firms' current shares of subscribers. Based on the record as a whole
    and our analysis, we conclude that the transaction is unlikely to
    result in public interest harm in mobile telephony markets. We make
    this finding primarily because we find that, in the post-merger
    environment, there will be a continuing presence of multiple other
    substantial carriers in each overlap market with the capacity to add
    subscribers and the ability to add capacity. As a result, we believe
    this transaction is unlikely to result in collusive behavior or
    create "unilateral" market power on the part of the merged firm. We
    also find that there are no local markets where post-merger
    conditions would require a divestiture remedy. Sprint and Nextel
    have been the third, fourth, or later entrants into individual
    markets. Finally, we find that public interest benefits should
    result from this transaction and flow to consumers, including
    improved service quality and broader deployment of the next
    generation of advanced wireless services, despite the fact that the
    two networks will not be tightly integrated in the near term.

4.  With regard to the BRS and EBS licenses specifically, our analysis
    shows that this transaction is unlikely to result in public interest
    harm in the 2.5 GHz band. We believe that regardless of whether the
    efficient future use of the 2.5 GHz spectrum ultimately turns out to
    be mobile, portable, or fixed service, it is unlikely that this
    transaction will have a negative impact on competition. We envision
    that, under any of these scenarios, by the time this spectrum
    capacity is put to use, sufficient other spectrum should be
    available so that no undue market power will be conferred on the
    combined entity("Sprint Nextel").

# Background

## Description of the Applicants

### Nextel Communications, Inc.

5.  Nextel is a publicly-traded Delaware corporation headquartered in
    Reston, Virginia.[^5] Nextel operates primarily SMR licenses in the
    800 and 900 MHz bands and provides digital wireless voice and data
    communications services over its all-digital network based on
    Integrated Digital Enhanced Network ("iDEN") technology provided by
    Motorola, Inc.[^6] Nextel offers a bundled service that provides a
    customer with interconnected mobile voice along with trunked
    dispatch service (marketed under the brand name "Direct Connect")
    that allows instant, real-time conferencing on a one-to-one or
    one-to-many basis.[^7] Customers can also subscribe to other
    optional services, including paging, text/numeric messaging, and
    wireless Internet access.[^8] Nextel also holds BRS licenses and
    leases excess capacity from EBS licensees in the 2.5 GHz band.[^9]
    As a result of the Commission's 800 MHz rebanding plan, the
    Commission modified certain Nextel licenses to give Nextel a
    nationwide authority to operate in ten megahertz of contiguous
    spectrum in the 1.9 GHz band.[^10]

6.  In 1999, Nextel sold some of its 800 MHz SMR licenses to Nextel
    Partners, Inc. ("Nextel Partners") in exchange for a minority
    ownership interest in the company. Nextel Partners is also building
    out an iDEN network and Nextel assists Nextel Partners in obtaining
    terms similar to those Nextel receives from vendors for equipment
    and services.[^11] Nextel Partners provides digital wireless
    telecommunications services using its own iDEN network under the
    Nextel brand name in mid-sized and rural U.S. markets.[^12] As of
    December 31, 2004, Nextel owned about thirty-two percent of the
    outstanding common stock of Nextel Partners and about eighteen
    percent of the outstanding common stock of NII Holdings, Inc., which
    provides wireless communications services primarily in selected
    Latin American markets. Also, as of December 31, 2004, Legg Mason,
    Inc. owned 10.37 percent of Nextel shares outstanding.[^13] No other
    investor holds more than a ten percent ownership interest in Nextel.

7.  Today, Nextel is the fifth largest provider of mobile telephony
    service in the United States based on subscribership.[^14] As of
    December 31, 2004, Nextel provided service to over 16.2 million
    subscribers, which consisted of 15.0 million subscribers of
    Nextel-branded service and 1.2 million subscribers of Boost Mobile,
    a Nextel affiliate, and reported \$13.4 billion in operating
    revenues for 2004.[^15] Nextel together with its affiliate, Nextel
    Partners, currently utilize the iDEN technology to serve 297 of the
    top 300 U.S. markets where about 260 million people live or
    work.[^16]

### Sprint Corporation

8.  Sprint is incorporated under the laws of the state of Kansas and
    headquartered in Overland Park, Kansas.[^17] Sprint holds PCS and
    BRS licenses. [^18] Sprint uses Code Division Multiple Access
    protocol ("CDMA") throughout its wireless network.[^19] Sprint has
    also deployed a 1xRTT voice and data network which provides wireless
    access to the internet and other data services.[^20] In July 2005,
    Sprint announced that it had begun rollout of high-speed wireless
    data services using Evolution Data Optimized ("EV-DO")
    technology."[^21] Sprint provides wireline long distance and local
    telecommunications services.[^22] Sprint also holds BRS licenses and
    leases excess capacity from EBS licensees in the 2.5 GHz band.[^23]

9.  The Sprint network of operations consists of Sprint PCS and
    independent affiliates.[^24] Sprint PCS is the subsidiary of Sprint
    Corporation that provides wireless telephony service.[^25] Each of
    the affiliates has an agreement with Sprint PCS to use the latter's
    PCS licenses to deploy CDMA technology and Sprint PCS-branded
    service in specific areas of the country.[^26] In return, Sprint PCS
    receives a percentage of the affiliates' local service revenue.[^27]
    In addition, Sprint PCS performs back-office tasks for most of its
    affiliates, including billing and customer service.[^28] Recently,
    Sprint has renegotiated these arrangements with some of its
    affiliates, responding to disputes with, as well as the financial
    difficulties of, certain affiliates.[^29] The amended agreements
    cover approximately forty percent of the customers served by all
    affiliates.[^30]

10. Currently, Sprint is the third largest provider of mobile telephone
    voice and related data services in the United States in terms of
    subscribership.[^31] Sprint PCS had 24.7 million customers as of
    December 31, 2004: 17.8 million direct, postpaid subscribers, 3.2
    million through affiliates, and 3.7 million wholesale
    subscribers.[^32] Sprint reported \$14.6 billion in revenues for
    2004.[^33] Sprint's CDMA network is now available in 99 percent of
    the major metropolitan areas in forty-eight states, the Virgin
    Islands, and Puerto Rico. Sprint, together with third party
    affiliates, operates PCS systems in over 350 metropolitan markets,
    including the 100 largest U.S. metropolitan areas, and reaches
    approximately 250 million people.[^34] Sprint has been able to
    increase its coverage area by entering into roaming agreements with
    various carriers throughout the United States.[^35]

## Description of Transaction

11. On December 15, 2004, Sprint and Nextel entered into an agreement
    for a merger to combine operations and assets valued at
    approximately \$70 billion.[^36] Upon consummation of the merger,
    Nextel would be merged into S-N Merger Corp, a wholly owned
    subsidiary of Sprint, and Sprint's name would be changed to Sprint
    Nextel Corporation ("Sprint Nextel").[^37] After closing, the merged
    company intends to spin off its incumbent local exchange carrier
    ("ILEC") assets to its shareholders.[^38] As currently planned, the
    merged entity's executive headquarters would reside in Reston,
    Virginia, and its operational headquarters would be in Overland
    Park, Kansas.[^39] Sprint Nextel will be led by a board of directors
    drawn equally from the pre-merger boards of the two companies. The
    merger would be achieved through a stock-for-stock transaction with
    Nextel shareholders receiving 1.3 shares of Sprint common stock and
    \$.50 in cash for each Nextel common share. The actual stock/cash
    allocation is subject to adjustment in order to facilitate the
    spin-off of Sprint's local telecommunications business on a tax-free
    basis, and will be determined at the time of the merger. The equity
    interests in Sprint and Nextel are being valued equally in the
    merger, and the stock/cash allocations in the Merger Agreement are
    designed so that Nextel's existing shareholders will own slightly
    less than 50 percent of Sprint's common stock.[^40]

12. The Applicants' respective current spectrum holdings that are used
    in the provision of mobile telephony services are set out in detail
    in the Application.[^41] Nextel currently holds up to 14 megahertz
    in portions of the 800 MHz band in each of the 493 Basic Trading
    Areas ("BTAs")[^42], and as much as 4.75 megahertz in portions of
    the 900 MHz band.[^43] In addition, when the Commission's 800 MHz
    Re-Banding Plan is considered,[^44] Nextel holds 10 megahertz of
    spectrum in the 1.9 GHz band in each of the 493 BTAs. Sprint
    currently holds broadband PCS licenses in 490 BTAs,[^45] and its
    spectrum aggregation ranges up to 40 megahertz. As a result of this
    transaction, the merged entity would hold spectrum involving these
    licenses in all of the 493 BTAs, with overlaps in every BTA except
    Guam, American Samoa, and the Northern Mariana Islands.[^46]

13. With regard to the Applicants' current spectrum holdings (through
    licenses and spectrum leases) in the 2.5 GHz band, Nextel holds
    spectrum rights in this band in 281 BTAs; on average, 35.7 megahertz
    is licensed and 53.7 megahertz is leased.[^47] Sprint, in turn,
    holds spectrum rights in 190 BTAs, of which, on average, 26.8
    megahertz is licensed and 57.7 megahertz is leased.[^48] Combining
    Sprint's and Nextel's holdings in the 2.5 GHz band would involve
    overlap of their existing licenses and leases in eighty-five
    BTAs.[^49]

## Application and Review Process

### Commission Review

14. On February 8, 2005, pursuant to section 310(d) of the
    Communications Act,[^50] Sprint and Nextel filed: 33 applications
    seeking consent to the proposed transfer of control of licenses held
    by Nextel to Sprint; three applications for consent to transfer
    control of *de facto* lease authorizations from Nextel to S-N Merger
    Corp.; two applications for consent to transfer control of Satellite
    Earth Station authorizations from Nextel to Sprint; 13 applications
    for consent to transfer control of Cable Television Relay Service
    licenses from Nextel to Sprint; and five applications for consent to
    transfer control of Part 5 Experimental Radio Service authorizations
    from Nextel to Sprint. Sprint and Nextel also filed one application
    for transfer of control of Nextel's international section 214
    authorization to Sprint.[^51]

15. The Applicants assert that approval of the proposed transaction is
    in the public interest for several reasons.[^52] For instance, the
    Applicants contend that the merged entity would combine companies
    with complementary strengths and make possible a richer set of
    products, services, and features in the future. Customers who need
    wireless broadband capabilities would be more interested in the CDMA
    service available on Sprint's network and handsets.[^53] Customers
    who prefer the robust, instant-communication push-to-talk
    functionality of Direct Connect would be more attracted to Nextel's
    iDEN network and handsets.[^54] The Applicants also contend that the
    merger would result in a number of technical benefits and
    efficiencies and lead to improved service quality and coverage. The
    Applicants also assert that the proposed merger would accelerate the
    deployment of wireless interactive multimedia services ("WIMS")
    using the 2.5 GHz band. Finally, the applicants assert that the
    merger would benefit public safety communications and state that the
    merged entity will comply with Nextel's obligations under the
    Commission's 800 MHz rebanding plan.[^55]

16. On February 16, 2005, the Wireless Telecommunications Bureau
    ("Bureau") released a protective order under which third parties
    were allowed to review confidential or proprietary documents
    submitted by the Applicants.[^56] On February 28, 2005, the
    Commission released a Public Notice seeking public comment on the
    proposed transaction.[^57] In response to the Comment Public Notice,
    parties filed seven pleadings that were styled petitions to deny the
    applications and 38 comments during the pleading cycle.[^58]

17. Community Technology Centers' Network ("CTC Net"), Consumer
    Federation of America/Consumers Union ("CFA/CU"), and NY3G
    Partnership contend that the Commission should deny this license
    transfer application because the merged entity would hold an
    excessive amount of BRS/EBS spectrum nationwide and this would
    result in spectrum warehousing, delays in service launch, and a lack
    of service and competitive prices.[^59] Duncan, Preferred
    Communications, and the Safety and Frequency Equity Competition
    ("SAFE") Coalition argue that further consolidation in the market
    for mobile telephony voice and data services would exacerbate the
    alleged competitive harms that the Commission's rebanding plan
    caused non-Nextel SMR licensees who hold Economic Area ("EA") and
    site licenses.[^60] In its pleadings, the New Jersey Division of the
    Ratepayer Advocate contends that reduction of the number of
    nationwide mobile telephony carriers from five to four would reduce
    the availability of roaming services to rural customers.[^61] It
    also argues that the amount of BRS/EBS spectrum held or leased by
    the merged entity would create a barrier to entry for others who
    would want to provide WIMS.[^62]

18. On April 29, 2005, Bureau staff requested additional information
    from the Applicants ("Information Request").[^63] The Applicants'
    responses to the Information Requests are included in the
    record.[^64] On May 6, 2005, Commission staff requested data from
    the Applicants and from Nextel Partners, Cingular Wireless Corp.
    ("Cingular"), Verizon Wireless, LLC ("Verizon Wireless"), T-Mobile,
    ALLTEL Corporation ("ALLTEL"), Western Wireless Corp., and Southern
    LINC Wireless.[^65] The responses to the Data Requests are included
    in the record.

### Department of Justice Review

19. The Antitrust Division of the U.S. Department of Justice ("DOJ")
    reviews telecommunications mergers pursuant to section 7 of the
    Clayton Act, which prohibits mergers that are likely to
    substantially lessen competition.[^66] The Antitrust Division's
    review is limited solely to an examination of the competitive
    effects of the acquisition, without reference to national security,
    law enforcement, or other public interest considerations. On August
    3, 2005, the Antitrust Division closed its investigation of the
    Sprint-Nextel merger without taking any enforcement action.[^67]

# Standard of Review and Public Interest Framework

20. Pursuant to sections 214(a) and 310(d) of the Communications Act,
    the Commission must determine whether the Applicants have
    demonstrated that the proposed transfer of control of Nextel's
    licenses and authorizations to Sprint will serve the public
    interest, convenience, and necessity.[^68] In making this
    determination, we first assess whether the proposed transaction
    complies with the specific provisions of the Communications
    Act,[^69] other applicable statutes, and the Commission's rules.
    [^70] If the transaction would not violate a statute or rule, the
    Commission considers whether it could result in public interest
    harms by substantially frustrating or impairing the objectives or
    implementation of the Communications Act or related statutes. The
    Commission then employs a balancing process weighing any potential
    public interest harms of the proposed transaction against any
    potential public interest benefits.[^71] The Applicants bear the
    burden of proving, by a preponderance of the evidence, that the
    proposed transaction, on balance, serves the public interest.[^72]
    If we are unable to find that the proposed transaction serves the
    public interest for any reason, or if the record presents a
    substantial and material question of fact, section 309(e) of the Act
    requires that we designate the application for hearing.[^73]

21. Our public interest evaluation encompasses the "broad aims of the
    Communications Act,"[^74] which include, among other things, a
    deeply rooted preference for preserving and enhancing competition in
    relevant markets, accelerating private sector deployment of advanced
    services, ensuring a diversity of license holdings, and generally
    managing the spectrum in the public interest. Our public interest
    analysis may also entail assessing whether the merger will affect
    the quality of communications services or will result in the
    provision of new or additional services to consumers.[^75] In
    conducting this analysis, the Commission may consider technological
    and market changes, and the nature, complexity, and speed of change
    of, as well as trends within, the communications industry.[^76]

22. In determining the competitive effects of the merger, our analysis
    is informed by, but not limited to traditional antitrust
    principles.[^77] The Commission and DOJ each have independent
    authority to examine telecommunications mergers, but the standards
    governing the Commission's review differ from those of DOJ.[^78] DOJ
    reviews mergers pursuant to section 7 of the Clayton Act, which
    prohibits mergers that are likely to lessen competition
    substantially in any line of commerce.[^79] The Commission, on the
    other hand, is charged with determining whether the transfer of
    licenses serves the broader public interest, as stated above. In the
    communications industry, competition is shaped not only by antitrust
    rules, but also by the regulatory policies that govern the
    interactions of industry players.[^80] In addition to considering
    whether the merger will reduce existing competition, therefore, we
    also must focus on whether the merger will accelerate the decline of
    market power by dominant firms in the relevant communications
    markets and the merger's effect on future competition.[^81] We also
    recognize that the same consequences of a proposed merger that are
    beneficial in one sense may be harmful in another. For instance,
    combining assets may allow the merged entity to reduce transaction
    costs and offer new products, but it may also create market power,
    create or enhance barriers to entry by potential competitors, and
    create opportunities to disadvantage rivals in anticompetitive
    ways.[^82]

23. Our public interest authority also enables us to impose and enforce
    narrowly tailored, transaction-specific conditions that ensure that
    the public interest is served by the transaction.[^83] These
    conditions may include the divestiture of certain licenses along
    with associated facilities and customers, for example. Section
    303(r) of the Communications Act authorizes the Commission to
    prescribe restrictions or conditions, not inconsistent with law,
    that may be necessary to carry out the provisions of the Act.[^84]
    Similarly, section 214(c) of the Act authorizes the Commission to
    attach to the certificate "such terms and conditions as in its
    judgment the public convenience and necessity may require."[^85]
    Indeed, unlike the role of antitrust enforcement agencies, our
    public interest authority enables us to rely upon our extensive
    regulatory and enforcement experience to impose and enforce
    conditions to ensure that the merger will yield overall public
    interest benefits.[^86] Despite the Commission's broad authority, we
    have held that we will impose conditions only to remedy harms that
    arise from the transaction (*i.e.*, transaction-specific harms)[^87]
    and that are fairly related to the Commission's responsibilities
    under the Communications Act and related statutes.[^88] Thus, we do
    not impose conditions to remedy pre-existing harms or harms that are
    unrelated to the transaction.

# Qualifications of applicants

24. Among the factors the Commission considers in its public interest
    review is whether the applicant for a license has the requisite
    "citizenship, character, financial, technical, and other
    qualifications."[^89] Therefore, as a threshold matter, the
    Commission must determine whether the parties meet the requisite
    qualifications to hold and transfer licenses under section 310(d) of
    the Act and the Commission's rules.[^90] In making this
    determination, the Commission does not, as a general rule,
    re-evaluate the qualifications of 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.[^91]

25. We find that Sprint and Nextel meet the requisite qualifications.
    The Commission has previously determined that Sprint and Nextel are
    qualified to hold licenses.[^92] No parties have raisedissues with
    respect to the basic qualifications of Sprint or Nextel.

# PUblic interest Analysis

26. For purposes of our public interest analysis, this transaction
    involves most importantly two kinds of spectrum assets:
    SMR/broadband PCS licenses, and BRS/EBS licenses and leases. And, as
    the record demonstrates, this transaction at least potentially
    involves several relevant product markets. These include mobile
    voice service, mobile data service, dispatch service, and fixed
    wireless service. Issues of intermodal competition between mobile
    voice and wireline service arise as well. The overall structure of
    our analysis, however, is driven by two threshold considerations
    regarding the BRS/EBS licenses and leases. As further explained
    below, the availability of the BRS/EBS spectrum for new uses in the
    near term will be limited because licenses will need to transition
    to a new band plan, and thus neither public interest harms nor
    benefits related to use of this spectrum are likely in the near
    term. Moreover, it is unclear whether the eventual future use of
    this spectrum will be to provide mobile service, fixed service, or a
    combination of the two. Taken together, these considerations mean
    that any judgments regarding the impact of combining Nextel's and
    Sprint's BRS/EBS holdings will necessarily be speculative.

27. Therefore, we organize our analysis as follows. First, we address
    potential harms and benefits of this merger on mobile telephony
    markets, *excluding* any potential impact of the BRS/EBS licenses.
    In evaluating the competitive impacts on cellular and broadband PCS,
    we address both potential harms and benefits of the merger on these
    markets as affected by the proposed transfer of licenses. This
    analysis focuses primarily on the horizontal effects to output
    markets for telecommunication services that business and individuals
    purchase and consume. We also consider input markets, as the
    proposed Sprint Nextel merger affects spectrum licenses, a key input
    that may influence the overall competitive harms and benefits
    resulting from the transaction.

28. Next, we turn to a separate analysis of the potential impact of
    BRS/EBS assets, considering possible relevant markets, harms, and
    benefits. We note that BRS/EBS spectrum is not considered in the
    analysis of the mobile telephony market because 2.5 GHz spectrum is
    committed to non-mobile telephony uses currently and for the
    near-term future, due to the historical configuration of the band
    and the multi-year transition process needed to reconfigure the
    band. In our analysis of BRS/EBS assets, we find that, regardless of
    whether the efficient future use of the 2.5 GHz spectrum ultimately
    turns out to be mobile, portable, or fixed service, it is unlikely
    that this transaction will have a negative impact on competition. We
    envision that, under any of these scenarios, by the time this
    spectrum capacity is put to use, sufficient other spectrum should be
    available so that no undue market power will be conferred on the
    combined entity. Finally, we address other issues, including certain
    alleged impacts on wireless/wireline competition, on dispatch
    service, and on the provision of public safety services.

29. We do not include stand-alone discussions of the possibility of
    entry in either the mobile telephony or BRS/EBS sections. Rather,
    the impact of entry is incorporated into our overall analysis as
    follows. First, in the assessment of possible unilateral effects
    harm in mobile telephony, we consider the ability of firms already
    substantially built-out in a market to expand capacity and service.
    Second, in the assessment of both mobile telephony and the merged
    entity's expanded control over BRS/EBS spectrum licenses, we
    consider the entry that will be enabled by the 90 megahertz of
    bandwidth available in the Advanced Wireless Service ("AWS")
    auction, planned to commence in June 2006. We do not rely on any
    other planned auctions of spectrum licenses to enable entry, because
    their timing is more uncertain, they are too far in the future, or
    they involve encumbered spectrum. Moreover, we do not rely at all on
    entry by firms entirely new to the markets at issue here to
    ameliorate any anticompetitive harms.

## Mobile Telephony Competition

30. In this section, we evaluate the proposed transfer of CMRS licenses
    and analyze the competitive implications to mobile telephony
    competition. A merger between Sprint and Nextel would combine two of
    the five remaining national mobile telephony carriers. As we do
    generally with horizontal mergers, we consider whether this merger
    would reduce the availability of consumer choices to the point that
    Sprint Nextel would have the incentive and ability, either by itself
    or in coordination with other firms, to raise prices for mobile
    telephony services or otherwise behave anticompetitively.[^93] The
    ability to raise prices above competitive levels is generally
    referred to as "market power." Market power may also enable sellers
    to decrease service quality or future innovation.[^94] A fundamental
    tenet of the Commission's public interest review is that, absent
    significant offsetting efficiencies or other public interest
    benefits, a transaction that creates or enhances significant market
    power or facilitates its use is unlikely to serve the public
    interest.[^95]

31. A horizontal transaction is unlikely to create or enhance market
    power or facilitate its exercise unless it significantly increases
    concentration and results in a concentrated market, properly defined
    and measured.[^96] Transactions that do not significantly increase
    concentration or result in a concentrated market ordinarily require
    no further competitive analysis. Market concentration is generally
    measured by the Herfindahl-Hirschman Index ("HHI") and changes in
    concentration are measured by the change in the HHI. However, HHI
    data provide only the beginning of the analysis. The Commission then
    examines other market factors that pertain to competitive effects,
    including the incentive and ability of other firms to react and of
    new firms to enter the market. Ultimately, the Commission must
    assess whether it is likely that the merged firm could exercise
    market power in any particular market.[^97]

32. We begin by determining the appropriate market definitions to employ
    for the analysis, and by identifying relevant market participants.
    We then measure the degree of market concentration. Next we consider
    the possible competitive harms that could occur due to a significant
    increase in market concentration or market power. Mergers can
    diminish competition and firms can exercise market power in a number
    of ways. A merger may create market power in a single firm and allow
    that firm to act on its own in raising prices, lowering quality,
    reducing innovation, or restricting the deployment of new
    technologies or services. These are generally referred to as
    unilateral effects. Such may occur, for example, where the other
    firms in the market lack the capacity to serve the customers who
    would otherwise leave the merged firm due to a price increase. In
    differentiated product markets, a merger -- by eliminating a
    competitor with a similar product -- may allow the merged firm
    unilaterally to raise prices or lower quality profitably because it
    will no longer lose customers to its merged partner. A merger may
    also make coordinated actions that harm consumers by the firms
    selling in the market more likely, more successful, or more
    complete. This behavior includes tacit or express collusion and *may
    or may not* be lawful in and of itself. Such coordination requires
    reaching an agreement, then detecting and punishing departures from
    the agreement. The effects of such coordinated behavior may include
    increased prices, reduced number of minutes in a given price plan,
    degraded output quality, or some combination of these effects. They
    may also include longer-term effects such as reduced innovation and
    restricted deployment of new technologies and services.[^98] After
    examining the transaction's potential effects on competition, we
    examine other potential public interest harms and the potential
    public interest benefits claimed by the Applicants.

33. In the analysis that follows, we focus our discussion on only those
    elements and considerations that are at issue in the instant merger.
    We note that in analyzing possible competitive harm from the
    transaction, we treat the Sprint and Nextel affiliates as if they
    are a part of the merged entity, while in analyzing the possible
    benefits, we exclude the affiliates. This conservative approach
    ensures that we neither overlook possible harms (*e.g.*, a reduction
    in competition where one of the merger partner's operations overlaps
    with an affiliate of the other partner), nor overstate potential
    public benefits (the Applicants' plans for network integration and
    service improvements do not, at this time, extend to the operations
    of any of the Sprint or Nextel affiliates).

34. The results of the first step in our analysis of mobile telephony
    competition are consistent with past findings in horizontal mergers
    between CMRS licensees. As explained below, we determine that the
    appropriate product market definition to employ for the analysis is
    the combined market for mobile telephony services. We analyze all of
    the separate markets, *e.g.*, interconnected mobile voice services
    and mobile data services, under this combined product market. We
    also examine the relevant geographic market for analyzing the
    competitive effects of this transaction and find that the relevant
    market is local in nature and that all the facilities-based
    cellular, PCS, and SMR licensees that provide mobile telephony
    services in a geographic area are the relevant market participants.

35. The second step is a specific analysis of the horizontal and
    vertical effects in certain markets that result in potential
    competitive harms. To determine potential horizontal effects, we
    first measure the degree of market concentration through an initial
    Herfindahl-Hirschman Index ("HHI") screen that eliminates from
    further review those markets in which there is clearly no
    competitive harm relative to today's generally competitive
    marketplace.[^99] We then examine two horizontal issues for the 124
    Component Economic Areas ("CEAs") and 190 Cellular Market Areas
    ("CMAs)"[^100] identified by our screen for further competitive
    review: coordinated interaction and unilateral effects. Based on our
    analysis of conditions that typically exist in local U.S. markets,
    we find that the merger of Sprint and Nextel would be unlikely to
    facilitate coordinated interaction in the mobile telephony market.
    In addition, we find that this merger would be unlikely to result in
    adverse unilateral effects in the markets identified by the initial
    screen based on our analysis of market shares, number of competitors
    in the local market, probable competitive responses by rivals, and
    issues of product differentiation, substitutability, and
    efficiencies. Although the Applicants identified seven BTAs[^101]
    where, on first inspection, competitors may lack sufficient capacity
    to be able to respond adequately to potential anticompetitive
    unilateral actions taken by the merged entity, based on a more
    granular analysis of local markets set forth in a confidential
    Appendix, we determine that harms in these few markets are unlikely.
    Finally, we also consider the potential vertical harms of the
    proposed transaction on the CMRS roaming market and separately
    conclude that the merger will not adversely affect competition in
    the market for roaming services or raise rates that would be passed
    through to consumers.

36. The last step in our review is to apply several criteria to decide
    whether purported public interest benefits should be considered and
    weighed against potential harms from the merger. Under our analysis,
    we determine that the Applicants' proposed transaction will likely
    result in some merger-specific public interest benefits. We explain
    below how certain post-merger efficiencies may result in specific
    cost savings that yield reduced prices for consumers, better
    coverage and service quality, and more extensive service offerings.

### Market Definition

37. In this section, we determine the appropriate definitions for the
    product markets, the geographic markets, and the market
    participants. Our determinations with respect to the market
    definitions are generally consistent with the *Cingular-AT&T
    Wireless Order*, with discussions added here on retail and wholesale
    markets and on PTT. We adopt the definition of "mobile telephony
    services" used by Applicants, which is based on the *Cingular-AT&T
    Wireless Order*. In turn, we use these findings to frame our
    competitive analysis of the proposed merger.

#### Product Market Definition

38. As explained below, we find that there are separate relevant product
    markets for interconnected mobile voice services and mobile data
    services, and also for residential services and enterprise services.
    Nevertheless, we analyze all of these product markets under the
    combined market for mobile telephony. We believe, based upon
    consideration of factors including the nature of these services and
    their relationship with each other, that this approach will provide
    a reasonable assessment of any potential competitive harm to any of
    the markets as a result of the transaction. Further, we need not
    determine if dispatch and PTT are separate product markets. Dispatch
    is not affected by this merger. While PTT is affected, our
    conclusions about the impact of the transaction on PTT do not depend
    on whether it is treated as a separate product market or feature.

39. A relevant market includes "all products 'that consumers consider
    reasonably interchangeable for the same purposes.'"[^102] Thus, when
    one product is considered by consumers to be a reasonable substitute
    for another product, it is included in the relevant market.[^103] A
    relevant product market is defined in the economic literature as the
    smallest group of competing products or services for which a
    hypothetical monopolist in a geographic area could profitably impose
    at least a "small but significant and non-transitory price
    increase," presuming no change in the terms of sale of other
    products (the "hypothetical monopolist test").[^104]

40. To determine the relevant product markets for the purposes of
    evaluating the transaction, we first assume that a hypothetical
    monopolist within a geographic area offers one of the differentiated
    mobile telephony products such as stand-alone data services or a
    regional rate plan. Then we assume that this monopolist imposes a
    small but significant and non-transitory price increase for this
    mobile telephony service, and finally we evaluate the likely
    response of consumers to this price increase. If the price increase
    would allow the monopolist to make greater profits over a sustained
    period than before the price increase, even though some consumers
    will switch to other products, then this product may be defined as a
    relevant product market.[^105]

41. In their Application, Sprint and Nextel state that they have
    followed the *Cingular-AT&T Wireless* definition of "mobile
    telephony services" to define the product market.[^106] In that
    Order, the Commission found that separate markets exist for
    interconnected mobile voice and mobile data services, and also for
    residential and enterprise services.[^107] However, in performing
    its analysis, the Commission decided that analyzing the proceeding
    using a combined market for mobile telephony was unlikely to
    understate any potential competitive harm, and thus analyzed all of
    these services under such a combined market.[^108]

##### Mobile Voice and Mobile Data Services

42. Although we find that there are separate markets for interconnected
    mobile voice[^109] and mobile data services,[^110] our competitive
    analysis will not distinguish mobile voice subscribers from mobile
    data subscribers. Instead of a separate analysis of the market for
    each of these services, we will analyze both of them under the
    combined market for mobile telephony. This decision is consistent
    with our determination in the *Cingular-AT&T Wireless Order* and in
    the *ALLTEL-Western Wireless Order*.[^111] For reasons outlined
    here, we believe that an analysis based on the combined mobile
    telephony market will provide a reasonable assessment of any
    potential competitive harm to the markets for mobile voice or data
    services due to the transaction. First, we continue to believe,
    consistent with the *Cingular-AT&T Wireless Order*, that most mobile
    data services likely are sold as add-ons to mobile voice services
    rather than as separate data-only service offerings.[^112]
    Therefore, we believe that nearly all mobile data subscribers are
    also mobile voice subscribers using the same phone number. Second, a
    variety of these mobile data add-ons are offered by all nationwide
    mobile carriers and some smaller regional carriers.[^113] Third,
    while Sprint continues to be the market leader in mobile data
    services as measured by the contribution of data to revenue, Nextel
    provides a lesser level of mobile data services by this same
    measure. In particular, in the first quarter of 2005 data accounted
    for 9.8 percent of Sprint's Average Revenue Per Unit ("ARPU"),
    followed by T-Mobile (7.6 percent), Cingular (7.5 percent), Verizon
    Wireless (6.3 percent), and Nextel (4.5 percent).[^114] Fourth, even
    in these circumstances where Sprint's data revenues exceed Nextel's
    data revenues, revenues derived from mobile data service provide
    only a relatively small percentage of nationwide carriers' revenues,
    despite signs of expansion in these services. As demonstrated
    immediately above, none of the five carriers listed (Sprint,
    T-Mobile, Cingular, Verizon Wireless, and Nextel) have data revenues
    as a percent of ARPU in excess of 10 percent.[^115] As reflected by
    these revenue levels, mobile voice service accounts for a larger
    part of carriers' ARPU than mobile data services. Under these
    circumstances, if competition is reduced in the mobile voice market
    as a result of this transaction, then we believe that there also
    would be a reduction in competition in the mobile data market
    primarily because of mobile data service's current standing as an
    add-on to mobile voice service. In turn, if the transaction does not
    harm competition in the mobile voice market, then we find it
    unlikely that the transaction would harm competition in the mobile
    data market because of the relatively low levels of ARPU discussed
    above that are attributable to data services, the general
    availability of data services from carriers, and the nature of data
    offerings as add-ons to mobile voice service. Accordingly, we
    believe that a combined analysis that includes both mobile voice and
    mobile data services will not fail to identify any potential
    competitive harm to the mobile voice or data services markets.
    [^116]

##### Residential and Enterprise Services

43. Similarly, although we find that there are separate relevant product
    markets for residential and enterprise services, we will aggregate
    those markets for purposes of our structural analysis. We find that
    this determination is consistent with the *Cingular-AT&T Wireless
    Order*.[^117] Because most mobile telephony service subscribers are
    residential customers,[^118] an analysis based on subscriber shares
    for a combined mobile telephony services market will tend to provide
    more accurate insights into the residential market. Moreover,
    analyzing a combined residential and enterprise product market
    should provide a fair assessment of the potential competitive harm
    to the enterprise service market because the competition to attract
    and retain enterprise customers, who typically generate higher
    revenue per subscriber for carriers than residential
    customers,[^119] is likely to be relatively intense.[^120] Under
    these circumstances, we believe that our analysis of a combined
    residential and enterprise product market should provide a fair
    assessment of potential competitive harm.[^121]

##### Nationwide and Local/Regional Services 

44. We also do not define separate product markets for nationwide and
    local/regional carrier calling plans. Rather, in our analysis below
    we take account of the fact that local/regional plans are
    differentiated from nationwide plans, and thus firms that can only
    provide local/regional plans may not have the same competitive
    role as firms offering nationwide service plans.

##### Retail and Wholesale Markets

45. In addition, we will not treat retail and wholesale as separate
    markets for purposes of analyzing the transaction, although we will
    take account of the role of resellers in our discussion of likely
    competitive effects. Resellers offer service to consumers by
    purchasing airtime at wholesale rates from facilities-based
    providers and reselling it at retail prices. However, the resale
    sector accounts for only approximately nine percent of all mobile
    telephone subscribers.[^122] Applicants contend that Sprint,
    Cingular, and Verizon Wireless together supply access for
    approximately 95 percent of all subscribers who are served through a
    wholesale entity, and that there is vigorous competition among these
    carriers. Applicants further state that such competition, together
    with Nextel not supplying wholesale services, indicates that the
    proposed Sprint Nextel merger will not harm competition among
    existing suppliers of wholesale services.[^123] Applicants also
    state that other carriers generally have sufficient capacity to
    absorb both Sprint Nextel retail customers who would want to switch
    carriers in response to any possible post-merger price increase, as
    well as the customers that Sprint currently serves through its
    wholesale arrangements.[^124] We agree with these assertions by the
    Applicants, and we find that the proposed merger would not likely
    harm competition among existing suppliers of wholesale
    services.[^125] Accordingly, we do not examine separate retail and
    wholesale markets in our competitive analysis.

##### Push-To-Talk (PTT)

46. As we explain below, we find it is not necessary, for the purposes
    of this order, to decide whether dispatch is a separate market from
    CMRS or the related issue of whether PTT is a "feature" or a
    "product." We note that a variety of PTT and dispatch services are
    available to customers. PTT is a "walkie-talkie" type of 2-way
    radio-type service that allows communication between parties at the
    touch of a button. PTT permits users to begin talking to one another
    instantaneously, subject to differences in latency or set-up periods
    between various carriers, rather than going through the call-setup
    process normally associated with mobile voice service (*e.g.*,
    locating and dialing a number of another party).[^126] As discussed
    below, PTT generally is bundled as a feature with other services
    such as mobile voice and mobile data on the handset and is usually
    available through the public switched telephone network. "Dispatch"
    is commonly understood to refer to service that allows two-way,
    real-time, push-to-talk voice communications between mobile units
    and fixed units, or between two or more mobile units.[^127] Dispatch
    differs from mobile voice communications because it is generally not
    interconnected with the public switched telephone network ("PSTN")
    and allows instant, real-time conferencing with groups, including
    both one-to-many and many-to-one communications.[^128] Dispatch has
    been described as "neither an industry nor a distinct technology,"
    but rather as an application that can be provided by different
    technologies.[^129] The term "trunked" refers to dispatch which
    allows sharing of multiple radio channels. Dispatch service may be
    bundled with other offerings such as mobile voice or mobile data
    services.[^130]

47. We do not need to address whether unbundled dispatch should be
    analyzed as a separate relevant product market for this
    transaction.[^131] Sprint does not offer a stand alone PTT service
    that would be similar to that of unbundled dispatch service, and
    thus is not a competitor in any such market.[^132] In this regard,
    SAFE Coalition states that the "unbundled dispatch services offered
    by smaller, independent, regional SMR providers is a differentiated
    service, generally distinct from mobile telephony services offered
    by PCS and cellular carriers such as ... Sprint PCS ("Ready
    Link®)... all of whom do [not]{.underline} generally offer
    [unbundled]{.underline} dispatch service (or close substitutes)"
    with capabilities offered by SMR dispatch service providers.[^133]
    Moreover, any lack of available offerings by nationwide carriers of
    unbundled dispatch suggests that it currently may not be economical
    for them to offer such service, and that we need not consider the
    impact of the transaction on unbundled dispatch. In addition, we do
    not agree with SAFE Coalition's suggestion that discussions in CMRS
    competition reports regarding various services, including the use of
    SMR spectrum for the provision of dispatch, controls our finding
    with respect to the product market to be considered for this
    transaction.[^134] Indeed, the discussion of dispatch in past CMRS
    competition reports addresses the evolving nature of the services
    offered by carriers and the role of dispatch,[^135] and some of the
    reports make clear that certain matters considered therein should
    not be construed as controlling in other contexts.[^136] As a result
    of these factors, even if we were to define unbundled dispatch
    service as a separate product market, that market would not be
    affected by this merger. Accordingly, we reject SAFE Coalition's
    arguments.

48. In contrast to dispatch, PTT is affected by this merger. Nextel
    provides digital wireless services including a walkie-talkie
    function that allows Nextel customers to communicate "one-to-one or
    one-to-many instantly with the push of a button."[^137] Some
    cellular and broadband PCS carriers, including Sprint, also offer
    PTT functionality.[^138] Sprint offers PTT as an add-on feature to
    its basic interconnected mobile voice service,[^139] and does not
    offer any other types of PTT or dispatch services. In these
    circumstances, we find that the overlapping PTT service offered by
    both Nextel and Sprint is bundled interconnected mobile voice and
    PTT, and is included in our analysis below.

49. We find that our conclusions will not be affected by whether we
    treat PTT as a separate product or a feature. It appears that basic
    interconnected mobile voice offerings may be in a position to
    substitute more closely for PTT services than they have in the past.
    For example, carriers generally offer some type of free
    mobile-to-mobile, or "in-network," calling which requires no
    additional fees for incoming or outbound calls between subscribers
    of the company.[^140] Since one of the advantages of such
    mobile-to-mobile or "in-network" services is that they offer
    unlimited calls within a group of users, unlimited in-network
    calling may allow basic voice service to substitute for dispatch for
    a number of customers.

50. In conclusion, treating PTT as a feature or a product does not
    change the results of our competitive analysis. As explained
    below,[^141] the users of PTT will not be harmed as a result of the
    transaction.

#### Geographic Market Definition

51. We find that the relevant geographic market for analyzing the
    competitive effect of this transaction on mobile telephony is local.
    This finding is primarily rooted in the premise that consumers
    obtain their wireless service in a local area, not on a national
    basis.

52. The Supreme Court has defined a relevant geographic market as the
    area in which consumers can reasonably search for competing
    services.[^142] It is commonly defined in the economic literature as
    the geographic area in which a hypothetical monopolist could
    profitably impose at least a "small but significant and
    nontransitory" increase in the price of the relevant product,
    assuming that the prices of all products provided elsewhere do not
    change.[^143]

53. For the purposes of evaluating this transaction, we use the
    hypothetical monopolist test to determine the relevant market by
    asking what is the smallest geographic area in which a hypothetical
    monopolist could profitably and permanently impose a small but
    significant price increase. In asking this question, we assume that
    buyers of wireless services would respond to a price increase by
    switching to wireless services purchased in a different location
    rather than, by switching to different wireless services.

54. We note two salient features about the purchase and sale of mobile
    telephony service. First, carriers base their monthly rates on the
    purchaser's billing address or zip code. Thus, traveling to a
    different store, or a different town, or purchasing service over the
    Internet, will not provide a purchaser with a different monthly
    rate. In that respect, the geographic market is extremely local,
    perhaps as small as a zip code or even smaller. On the other hand,
    it is also true that for national plans, many of the carriers offer
    the same monthly rate throughout the country, and for regional plans
    offer the same plan and rate throughout a large region. Thus, we
    could conclude that for regional plans, the geographic markets are
    large regions, for example, metropolitan areas or larger portions of
    states, and for national plans are as large as multi-state
    regions.[^144]

55. The second salient feature is that while monthly rates are on the
    one hand attached to a subscriber's billing address but in practice
    do not differ across large regions, promotions and handset prices
    are not attached to a billing address and do vary across a region.
    Indeed, they may vary even within a town because of the presence of
    authorized independent dealers. Thus, although a purchaser may not
    be able to obtain a different monthly rate by traveling to a
    different location, he or she could obtain a different price for the
    handset or a different promotion. Finally, we note one additional
    and important point: most purchasers of mobile telephony service
    prefer a local telephone number,[^145] and stores and carriers offer
    only local telephone numbers. Thus, the distance most users would be
    willing to travel to obtain wireless service may well be limited by
    the geographic boundaries of the local non-toll calling area.

56. For the proposed transaction, the geographic market is the area
    within which a consumer is most likely to shop for mobile telephony
    service. For most individuals, we believe this will be a local area,
    as opposed to a larger regional or nationwide area. In most parts of
    the United States, partially for the reasons set forth above, we
    find that the areas within which consumers regularly shop for
    wireless services are larger than counties, may encompass multiple
    counties and, depending on an individual's location, may even
    include parts of more than one state. We reject the argument that
    the market is as small as a county. If a hypothetical monopolist
    were to impose a small, non-transitory price increase for mobile
    telephony services (including promotions and handset prices) within
    a single county, we find that it would likely be unprofitable
    because significant numbers of consumers would be able to circumvent
    the higher price by obtaining a reasonably comparable service at a
    lower price in a nearby county.[^146]

57. We also do not agree with Preferred Communications[^147] that the
    relevant geographic market should be defined as an Economic Area
    ("EA"), of which there are 172 in the United States. Consistent with
    the Commission's decision in the *Cingular-AT&T Wireless Order*, we
    continue to define the relevant geographic market as local, and
    analyze the data on the basis of 348 CEAs and 734 CMAs.[^148] We
    believe that CEAs and CMAs represent more appropriate geographic
    markets than do EAs because they better reflect the local nature of
    the markets. We believe that these smaller geographic areas provide
    a better approximation of the areas in which consumers base their
    decisions to purchase wireless services. Thus we continue to believe
    that a combination of analyses by CEA and by CMA will provide us
    with the best estimates of potential competitive harm, and decline
    to perform competitive analysis on the basis of EAs.

#### Market Participants

58. We find that mobile telephony offered by cellular, PCS, and SMR
    licensees employing various technologies provide the same basic
    voice and data functionality and are indistinguishable to the
    consumer. Generally, we limit our analysis to cellular, PCS, and SMR
    facilities-based carriers, and exclude satellite carriers, wireless
    VoIP providers, MVNOs and resellers[^149] from consideration when
    computing initial measures of market concentration. Although
    satellite providers offer facilities-based mobile voice and data
    services, the price of these services is significantly higher than
    for services offered by cellular, PCS or SMR carriers.[^150]
    Therefore, most consumers would not view satellite phones as
    substitutes for mobile telephony. We also do not consider wireless
    VoIP carriers as providing the same functionality as mobile
    telephony providers because in general the service they provide is
    nomadic rather than mobile.[^151] We acknowledge, however, that
    non-facilities based service options such as MVNOs and resellers
    have an impact in the marketplace and in some instances may provide
    additional constraints against anticompetitive behavior. We take
    account of the role of MVNOs and resellers in our discussion of
    likely competitive effects below.

59. We conclude that all the facilities-based cellular, PCS, and SMR
    carriers that provide service in a geographic area constitute the
    relevant market participants. In our analysis, we consider both
    firms that offer nationwide service and firms that can only
    offer regional and local service.  We focus particularly, however,
    on those carriers that offer competitive nationwide service
    plans.  We find that such firms include the five facilities-based
    nationwide carriers (Cingular, Nextel, Sprint, T-Mobile, and Verizon
    Wireless) and three large regional firms (ALLTEL/Western Wireless,
    U.S. Cellular Corp. ("USCC"), and Dobson Communications Corporation
    ("Dobson")[^152]). Other regional and small firms are typically
    unable to offer national mobile telephony that can compete
    effectively with the various price and non-price components of the
    national services offered by the larger carriers.

60. PTT is an important part of our analysis because of the wide range
    of carriers that make such an offering available to consumers.
    Therefore, we discuss major carriers in the United States that offer
    some form of PTT. Such carriers include Sprint, Verizon Wireless,
    and ALLTEL.[^153] Nextel offers a bundled service which includes
    nationwide PTT and interconnected mobile voice. Sprint offers
    nationwide PTT as an add-on to its interconnected mobile voice
    service.[^154]

#### Input Market for Spectrum

61. We evaluate whether spectrum is within the input market for
    provision of mobile telephony service by examining its suitability
    for mobile voice service, its physical properties, the state of
    equipment technology, whether the spectrum is licensed with a mobile
    allocation and corresponding service rules, and whether the spectrum
    is committed to another use that effectively precludes its uses for
    mobile telephony. The input market currently includes cellular, PCS,
    and SMR spectrum and currently totals approximately 200 megahertz of
    spectrum.[^155] We find that BRS/EBS 2.5 GHz spectrum is not
    considered in this input market because 2.5 GHz spectrum is
    committed to non-mobile telephony uses currently and for the
    near-term future, due to the historical configuration of the band
    and the multi-year transition process needed to reconfigure the
    band.[^156] Our determination that this approximately 200 megahertz
    is the input market for spectrum is consistent with our decision to
    analyze the combined market for mobile telephony.

### Initial Screen

62. Our competitive analysis consists of an initial screen, followed by
    a further case-by-case review of the markets identified by that
    screen. The purpose of this initial screen was to eliminate from
    further review those markets in which there is clearly no
    competitive harm relative to today's generally competitive
    marketplace. It is designed to be conservative and ensure that we
    did not exclude from further scrutiny any geographic areas in which
    the potential for anticompetitive effects exists.[^157] In addition
    to market concentration, we considered the input market of spectrum
    that is suitable for the provision of mobile telephony services
    because spectrum is a necessary resource for wireless carriers to
    compete effectively.

63. This analysis follows the general structure of the DOJ/FTC Merger
    Guidelines, and we implemented a screen consistent with the
    Commission's analysis of recent transactions.[^158] A market was
    identified as requiring further competitive review if the
    post-transaction HHI would be greater than 2800 and the change in
    HHI would be 100 or greater; or if the change in HHI would be 250 or
    greater regardless of the level of the HHI; or if, post-transaction,
    the Applicants would hold 70 megahertz or more of spectrum.[^159]
    Consistent with the Commission's review of the Cingular-AT&T
    Wireless transaction, we used data from our Numbering Resource
    Utilization / Forecast ("NRUF") database to calculate market shares
    and market concentration for two sets of geographic areas, CEAs and
    CMAs.[^160] We also use the NRUF data, in conjunction with billing
    data submitted by a number of carriers,[^161] to undertake our
    in-depth, market-by-market analysis of the areas identified for
    further review by the initial screens. We identified 124 CEAs and
    190 CMAs for further, case-by-case analysis.[^162]

64. By comparing the results of these two applications of the initial
    HHI threshold and analyzing any market identified by either
    application, we ensure that we do not overlook any local area that
    required a closer case-by-case analysis. Although the structure of
    some markets not identified for additional analysis will change as a
    result of the transaction, we believe that these structural changes
    are negligible. Therefore, we find that these structural changes
    will not alter carrier conduct in such a way as to impair
    competition and hence market performance. In our judgment, we find
    that these markets need no further review given the lack of
    potential for competitive harm as a result of this merger.

65. In addition to an examination of post-merger HHI and change in HHI,
    our initial screen included an analysis of the post-merger spectrum
    holdings of the combined firm in all local markets. This review
    identified any market where the Applicants hold 70 megahertz, or
    more, of spectrum in all portions of the market. Seventy megahertz
    of spectrum represents a little more than one-third of the total
    bandwidth available for mobile telephony today, leaving
    approximately 130 megahertz of spectrum available for use by other
    carriers in a local market. Our market-by-market analysis in this
    proceeding, as well as evidence from the mobile telephony markets
    across the country, indicates that 130 megahertz of spectrum is
    sufficient to support at least three viable competitors.[^163]
    Consistent with the conservative approach embodied in our analysis,
    we subjected any market in which only one entity controls more than
    one-third of the available spectrum to further review. We found that
    there were no areas where, post-transaction, the Applicants would
    hold 70 megahertz or more of spectrum.

66. The Applicants suggest that the Commission should evaluate the
    Sprint Nextel merger with more permissive structural screens than
    were used in the Cingular-AT&T Wireless transaction. They indicate
    that the HHI levels in screens used in the Cingular-AT&T Wireless
    transaction likely overstate the number of markets that deserve
    closer analysis in this case.[^164] The Applicants argue that
    adjustments should be made because Nextel is not an Incumbent Local
    Exchange Carrier ("ILEC") and the Sprint ILECs account for fewer
    than 5 percent of all switched access lines. Also, they state that
    Sprint Nextel will generally have lower spectrum holdings than did
    Cingular-AT&T Wireless. Finally, the Applicants believe that the
    Sprint Nextel merger creates larger and more credible efficiency
    benefits than did the Cingular-AT&T Wireless transaction.[^165]

67. We disagree. While we believe that the factors addressed by the
    Applicants play an important role in our competitive analysis of the
    Sprint Nextel merger, we believe that it is appropriate to examine
    these factors in the context of our case-by-case review.
    Implementing a more permissive initial screen could result in the
    exclusion of markets from further scrutiny for which risk of adverse
    competitive effects exists. We emphasize that our initial
    identification of markets only constitutes the beginning of the
    competitive analysis. It is designed to ensure that we do not
    exclude any geographic areas for which there is some risk of
    anticompetitive effects.

### Coordinated Interaction

68. In this section, we examine the potential of the merger of Sprint
    and Nextel to facilitate anticompetitive coordinated effects by
    examining the impact of the merger on the same set of factors
    identified in our analysis of coordinated effects in the
    Cingular-AT&T Wireless merger. As discussed below, we find that the
    merger of Sprint and Nextel will not make coordinated interaction
    among carriers more likely, successful, or complete. We base this
    finding on our analysis of conditions that are common across, or
    that typically prevail in, local U.S. markets, and Applicants'
    analysis of subscriber absorption capacity.

69. In general, in markets where only a few firms account for most of
    the sales of a product, those firms may be able to exercise market
    power by either explicitly or tacitly coordinating their
    actions.[^166] Accordingly, a merger may create or enhance market
    power or facilitate its exercise by making coordinated interaction
    among firms more likely, more successful, or more complete.[^167]
    Successful coordination depends critically on two key factors. The
    first is the ability of the firms to reach terms that are profitable
    for each of the firms involved, and the second is the ability to
    detect and punish deviations that would undermine the coordinated
    interaction. Rapid detection and punishment of deviations
    facilitates successful coordinated interaction by lowering the
    profitability of deviating from the terms of coordination and
    thereby reducing the incentives to cheat. Terms of coordination need
    not perfectly achieve a monopoly outcome in order to harm consumers,
    however. Further, terms of coordination may omit some market
    participants or dimensions of competition and still result in
    competitive harm.[^168]

70. In the *Cingular-AT&T Wireless Order*, we identified a number of
    factors that may determine whether market conditions are conducive
    to reaching and enforcing terms of coordination, including the
    number of firms, transparency of information, firm and product
    homogeneity, and the presence of mavericks.[^169] Based on an
    analysis of these and other factors, Applicants argue that the
    proposed transaction poses no significant risk of anticompetitive
    coordinated effects.[^170] Applicants also use a subscriber
    absorption capacity analysis to evaluate the potential for
    successful coordination between the two leading firms in a
    market.[^171] None of the commenters specifically addressed the
    potential of the merger to facilitate coordinated effects.

71. *Number of Firms*. In the *Cingular-AT&T Wireless Order*, we noted
    that a merger may lower the difficulties and costs of reaching and
    enforcing the terms of an agreement to restrict output and raise
    price above competitive levels by reducing the number of firms
    necessary to control a given percentage of total supply.[^172] As
    discussed below, however, we find that although a reduction in the
    number of national competitors by one may provide the remaining
    carriers with an increased ability and incentive to reach and
    enforce a coordinated strategy, it is not by itself a sufficient
    basis for concluding that it will do so with respect to this
    particular transaction.

72. The merger of Sprint and Nextel will reduce the number of national
    competitors from five to four, and in some geographic markets there
    will be fewer than four national competitors as a result of the
    merger. The Applicants stress that there will still be four national
    competitors in most large markets and in many smaller markets, and
    that there will also be a number of regional competitors as
    well.[^173] The Applicants further note that the Commission stressed
    in the *Cingular-AT&T Merger Order* that a reduction in the number
    of competitors and an increase in concentration are not by
    themselves a sufficient basis for concluding that anticompetitive
    coordinated effects are likely.[^174] We still maintain that a
    reduction in the number of national carriers by one is not enough,
    by itself, to make a determination of the likelihood of
    anticompetitive effects with respect to this particular transaction.
    However, because the elimination of a national competitor as a
    result of the merger may provide the remaining carriers with an
    increased ability and incentive to reach and enforce a coordinated
    strategy, we have carefully analyzed the other factors that may
    facilitate coordinated interaction.

73. *Transparency of Information*. Terms of coordination are often
    easier to reach, and detection and punishment of deviations is often
    more rapid and more effective, when key information about specific
    transactions or individual price or output levels is routinely
    available to rival firms.[^175] In this regard, we find that the
    merger has the potential to increase transparency of information by
    reducing the number and complexity of offerings, but it is not clear
    that it will provide the remaining carriers with an increased
    ability to reach terms of coordination or to detect and punish
    deviations from a coordinated strategy.

74. U.S. mobile telephony carriers make available a great deal of
    information about their offerings. Prices and other terms and
    conditions of service for residential customers are published on
    carriers' websites, among other places. As the Commission has noted,
    and as the Applicants have documented in the record for this
    transaction, carriers routinely monitor their rivals' pricing plans
    and promotions and use such information to design and modify their
    own pricing plans and service offerings.[^176] While acknowledging
    such monitoring, the Applicants argue that reaching and enforcing an
    agreement may be complicated by the number and complexity of pricing
    plans for residential customers.[^177] Although the elimination of
    another national competitor may reduce the number and complexity of
    offerings in the marketplace, it is not clear that this transaction
    would provide the remaining firms with a significantly increased
    ability to reach terms of coordination or to rapidly detect and
    punish any deviations from a coordinated strategy.

75. *Firm and Product Homogeneity*. Another market condition that may
    facilitate the ability to reach terms of coordination is firm and
    product homogeneity.[^178] As discussed below, we find that the
    merger may narrow asymmetries among the remaining nationwide
    carriers, but that the significant variation in the market shares
    and relative positions of the nationwide carriers across local
    geographic markets will continue to provide an effective constraint
    on coordinated interaction.

76. Applicants argue that significant asymmetries will remain after the
    merger of Sprint and Nextel, including product differentiation and
    the differences in incentives due to the ILEC affiliations of
    Verizon Wireless and Cingular. [^179] According to the Applicants,
    these differences in firm characteristics are obstacles to any
    post-merger effort to coordinate pricing. We agree with Applicants
    that differences resulting from ILEC affiliations by other national
    wireless carriers may tend generally to inhibit coordination in that
    the merged entity will face different incentives as an independent
    wireless carrier than the ILEC-affiliated Verizon Wireless or
    Cingular. Nevertheless, the extent to which any such difference in
    incentives will be a sufficient constraint on coordinated
    interaction is not clear with respect to markets where the merged
    entity and either Verizon Wireless or Cingular control a share of
    subscribers that is large enough to make a higher coordinated price
    profitable to both the merged entity and the ILEC-affiliated
    carrier.

77. Moreover, the merger of Sprint and Nextel has the potential to
    facilitate anticompetitive coordinated effects by further narrowing
    asymmetries among the national carriers. The merger will create a
    carrier that is more similar in size and market share to Cingular
    and Verizon Wireless. Since mobile operators with large customer
    bases may be better able to exploit scale economies and thereby
    benefit from declining average costs, the merged carrier may enjoy
    lower average costs which are more closely in line with those facing
    Cingular and Verizon Wireless. In addition, Sprint already shares
    the CDMA technology and a focus on wireless data in common with
    Verizon Wireless, and the acquisition of Nextel's business-oriented
    customer base may result in a customer mix that is more similar to
    that of Verizon.

78. On the other hand, it is not clear that this transaction would
    increase firm homogeneity in such a way as to provide the remaining
    firms with a significantly increased ability to reach terms of
    coordination. In addition, the national carriers have different
    market shares in different geographic areas, explained in part by
    where they were one of the two original cellular carriers. Thus, for
    example, Verizon is stronger in the Northeast and Cingular in the
    South and Midwest. Post-merger, Sprint Nextel would have the largest
    number of subscribers in some areas, and would be a distant third in
    others. In some markets, all four national carriers would be
    present, in others only two. We conclude that this variation in
    presence, market share and relative positions of the national
    carriers would make it more difficult for those carriers to reach
    terms of coordination.

79. *Presence of Mavericks.* In some circumstances, maverick firms can
    effectively prevent or limit coordinated interaction.[^180] Maverick
    firms are firms that have a greater economic incentive to deviate
    from the terms of coordination than do most of their rivals.
    Therefore, a merger may make coordinated interaction more likely,
    more successful, or more complete if it involves the acquisition of
    a maverick firm. As discussed below, we find that although the
    merger does not involve the acquisition of a unique maverick, it may
    result in the creation of a carrier which has less incentive to
    deviate from the terms of coordination than either Sprint or Nextel
    do as independent carriers.

80. Citing the Commission's analysis of mavericks in the context of the
    Cingular-AT&T Wireless merger, Applicants argue that regional
    carriers and also other nationwide carriers would remain potential
    mavericks after the merger of Sprint and Nextel, and conclude that
    the transaction does not involve the acquisition of a unique
    maverick.[^181] We concur that this transaction will not result in
    the loss of a unique maverick carrier. However, as the Commission
    has indicated, a relatively small carrier that controls
    substantially more spectrum than it needs to serve the demands of
    its currently limited customer base may have a greater incentive to
    deviate than carriers with larger market shares.[^182] This is
    because the small carrier receives less total benefit from the
    higher coordinated prices than do carriers with larger market shares
    and because the small carrier is also well positioned to profit from
    expanding its sales. The record shows that both Sprint and Nextel
    claim to have been the first carrier to introduce a number of
    innovative wireless service offerings and pricing plans, suggesting
    that each carrier may be considered a potential maverick absent the
    merger.[^183] By combining two smaller carriers into a single
    carrier with a larger market share, the merger of Sprint and Nextel
    may result in the creation of a carrier which has less incentive to
    deviate from the terms of coordination than either Sprint or Nextel
    do as independent carriers.

81. *Technology Development*. One factor that could undermine the
    incentives to coordinate is technological innovation, particularly
    to the extent that it favors one carrier, or a subset of carriers,
    for a period of time. As discussed below, we find that carriers'
    deployment of different wireless network technologies will help make
    the process of technological development and innovation an effective
    constraint on coordinated interaction in the U.S. wireless telephony
    market.

82. Applicants contend that successful coordinated action is less likely
    because of the dynamic nature of the wireless telephony
    market.[^184] For example, Applicants cite carriers' deployment of
    next-generation network technologies and the uncertain consumer
    demand for services provided over these networks, and the lumpiness
    of investments in wireless markets.[^185] Applicants also argue that
    differences in the positioning of carriers on their technology paths
    will remain substantial following the merger and will continue to
    complicate pricing agreement and enforcement.[^186] We agree that
    technological innovation in the market for wireless services will
    contribute to difficulties in maintaining a coordinated outcome
    among firms in the market. As explained below, however, the
    principal reason is the lack of technological standardization in
    U.S. wireless markets, rather than the process of technological
    innovation in itself. Evidence from international experience
    suggests that technological innovation may not be a very effective
    constraint on coordinated interaction when competing carriers use
    the same technology.[^187]

83. We believe that U.S. carriers' use of different wireless standards
    will tend to undermine the incentive and ability to coordinate for
    several reasons. Since the types of services offered tend to differ
    across technologies, the use of multiple standards tends to result
    in greater product variety and, accordingly, greater differentiation
    of services offered by carriers using different technologies.[^188]
    Diversified and heterogeneous services make it more difficult for
    competitors to reach terms of coordination. Other potential
    advantages of multiple technologies include greater technological
    competition and greater price competition between operators using
    competing standards.[^189] In particular, competition among carriers
    using competing incompatible technologies tends to put pressure on
    carriers to achieve sufficiently high adoption of their technology
    in order to ensure it survives the "standards war."[^190] The
    pressure to fill their networks may lead carriers to enact price
    cuts and handset subsidies.[^191] Moreover, the adoption of a
    particular standard may enable one or a subset of carriers to gain a
    temporary competitive edge, which in turn will tend to undermine
    incentives to coordinate and have a disruptive effect on the ability
    to reach and enforce terms of coordination. In this regard, we note
    that CDMA carriers migrating to CDMA2000 1xRTT and 1xEV-DO may gain
    a temporary competitive advantage because the backward compatibility
    of more advanced technologies on the CDMA2000 migration path permits
    handover from 3G to 2G, whereas GSM/TDMA carriers migrating to
    W-CDMA may be temporarily handicapped by the lack of handover from
    3G to 2G.[^192]

84. *Response of rivals*. The likelihood of successful collusion between
    the two or three leading carriers in a market depends on how smaller
    rivals respond. As discussed below, we find that competitive
    pressure from smaller rivals will generally provide an effective
    constraint on attempts at coordinated interaction by a coalition of
    market leaders in those markets which have the potential to be
    dominated by two or three larger carriers of roughly equal size.

85. International experience suggests that a reduction in the number of
    national mobile operators from five to four may tend to facilitate
    coordinated interaction when the two leading carriers have a large
    share of the market, with roughly symmetrical individual market
    shares so that their incentives are aligned, and the remaining
    smaller carriers are not an effective constraint on coordination
    between the two market leaders.[^193] However, in a significant
    portion of the geographic markets identified in the initial screen,
    the merged entity will not be one of the two leading carriers, and
    therefore the subscriber share of the two market leaders will not
    increase as a result of the merger. With respect to most of the
    geographic markets in which the merged entity would be one of the
    two leading carriers after the merger, we find that the combined
    market share of the two leading carriers would not be large enough,
    or their individual market shares not sufficiently symmetrical, to
    be conducive to successful coordinated interaction. In the
    relatively small number of markets where the combined market share
    of the top two carriers and the relative symmetry of their
    individual market shares might otherwise raise concerns about
    coordinated effects, our analysis of the presence and capacity of
    the remaining smaller carriers leads us to conclude that competitive
    pressure from the remaining smaller carriers will be an effective
    constraint on any attempt by the two leading carriers to align their
    conduct so as to raise price above competitive levels. This is
    because when carriers have relatively small market shares the
    additional profits earned by gaining market share are more likely to
    exceed those to be gained by agreeing to a higher price but keeping
    the current market share. Thus, small carriers with sufficient
    capacity to expand have less incentive to reach an agreement with
    the large players and greater incentive to cheat on any agreement
    reached. In addition, apart from the presence and capacity of
    smaller rivals, as discussed above we believe that successful
    coordination is more difficult because of the carriers' use of
    different technologies.

86. A quantitative analysis submitted by the Applicants suggests support
    for a view that smaller rivals in a market will generally be able to
    provide an effective constraint on coordinated actions by the larger
    carriers.[^194] The analysis, which the Applicants refer to as a
    Subscriber Absorption Capacity analysis ("SAC"), evaluates the
    potential for successful coordination between the two leading
    carriers in a market by estimating whether the remaining smaller
    carriers, who are not part of the assumed coordinating group, have
    the ability to absorb an output reduction equal to 10 percent of the
    combined subscribers of the two leading carriers if the latter were
    to attempt a coordinated price increase.[^195] The Applicants
    applied this test to 61 Telephia markets identified by a structural
    screen in which the merged entity would be one of the two leading
    firms.[^196] The results indicate that rivals would have sufficient
    capacity to absorb at least 10 percent of the subscribers of the two
    leading carriers in all but six of these markets.[^197] Based on a
    closer examination of these six markets, the Applicants further
    argue that the merger of Sprint and Nextel is unlikely to result in
    adverse coordinated effects in these markets as well.[^198]

87. The merger of Sprint and Nextel may also tend to facilitate
    coordinated interaction in markets where it results in three roughly
    equal-sized carriers controlling a large share of subscribers, and
    competition from the remaining smaller rivals is not an effective
    constraint on coordination among the top three carriers. However,
    only a few geographic markets identified in the initial screen meet
    these structural criteria. Based on a closer examination of the
    presence and capacity of smaller rivals and the network technologies
    deployed in these few markets, we conclude that competitive pressure
    from smaller carriers that are not part of the coordinating group
    will provide an effective constraint on coordinated interaction in
    these markets.

88. As noted previously, non-facilities based service options such as
    MVNOs and resellers have an impact in the marketplace and in some
    instances may provide additional constraints against anticompetitive
    behavior. In particular, independent resellers and MVNOs may be able
    to undercut the market leaders and thereby provide an additional
    constraint on coordinated interaction in markets which have the
    potential to be dominated by the two or three largest carriers.

89. *Conclusions*. On balance, we are persuaded that this transaction
    will not pose a risk of harm from collusive behavior in the local
    markets caught by the initial screen. While this determination is
    difficult due to the reduction of national carriers from five to
    four, we find that three conditions in U.S. wireless markets will
    generally provide effective constraints on coordinated interaction.
    First, the significant variation in the market shares and relative
    position of the nationwide carriers across local geographic markets
    greatly increases the complexity and difficulty of reaching terms of
    coordination. Second, the use of competing incompatible wireless
    standards undermines the ability and incentive to coordinate by
    promoting greater product heterogeneity and by enabling certain
    carriers to gain a temporary competitive advantage over rivals
    through the adoption of a particular standard. Third, smaller rivals
    with sufficient capacity to respond to attempted coordination by the
    two or three leading carriers in local geographic markets will have
    a strong incentive not to coordinate their actions with those
    leading carriers. We have examined the individual geographic markets
    identified in the initial screen in light of our analysis of these
    constraints, and based on this analysis we conclude that the merger
    of Sprint and Nextel is unlikely to alter conditions in these
    markets in such a way as to make coordinated interaction more
    likely, more successful, or more complete.

### Unilateral Effects

90. As discussed below, we find that this merger is unlikely to result
    in adverse unilateral effects. Although the merger would result in
    the elimination of a national competitor, four national competitors
    (Sprint Nextel, T-Mobile, Cingular, and Verizon Wireless) would
    remain, in addition to several regional carriers, including ALLTEL.
    In addition, Sprint Nextel would not be the largest competitor
    post-merger in most markets, and it would have a relatively small
    market share post-merger. For markets in which these characteristics
    do not hold, it appears that other firms have the incentive and
    ability to add subscribers in response to any attempted exercise of
    market power by the merged firm. In addition, the presence of
    carriers who hold spectrum but are not currently offering service
    may further lower the risk of adverse unilateral effects in some
    cases. The merger is also likely to result in efficiencies that
    would lead to pressure to reduce prices, further lowering the risk
    of adverse unilateral effects.

91. Adverse unilateral effects arise when the merged firm finds it
    profitable to alter its behavior following the merger by increasing
    price, suppressing output, or decreasing the quality of its
    service.[^199] Our finding that this merger likely will not lead to
    adverse unilateral effects is based mainly upon an analysis of
    market share, substitutability between Sprint and Nextel, competitor
    repositioning and expansion, and efficiencies. We discuss each of
    these factors below.

#### Market Shares 

92. The presence of few competitors or potential entrants that consumers
    consider to be good substitutes for the merged firm, combined with a
    large market share by the merged entity, may increase the likelihood
    of adverse unilateral effects.[^200] However, a large combined
    market share alone is not sufficient to conclude that adverse
    unilateral effects are likely. When a merged firm would hold a
    large, post-transaction market share, it is necessary to evaluate
    the number of competitors and potential entrants who are close
    substitutes for the merging parties in order to determine the
    likelihood of competitive harm.

93. The Applicants argue that the greatest risk of adverse unilateral
    effects arises if, in a particular market, the merged firm becomes
    the leading firm by a large margin.[^201] They also claim that this
    is not the case for most local markets, and that Sprint Nextel would
    have a market share greater than 50 percent in only one market,
    Brownsville, Texas **\[REDACTED\]**.[^202] We agree that
    post-transaction, Sprint Nextel will not be the largest firm in most
    markets, and will generally have a relatively low market share.
    Although we generally agree with the Applicants that the risk of
    adverse unilateral effects increases when the merged firm becomes
    the leading firm in a particular market by a large margin, the
    potential for adverse unilateral effects also exists in markets
    where the merged firm has a market share less than 50 percent or is
    not the leading firm in the market. Therefore, our analysis of
    unilateral effects incorporates the other factors described below.

#### Product Differentiation and Substitutability

94. As explained below, we assess the degree of substitutability between
    Sprint's and Nextel's mobile telephony services, and the effect that
    this has on the risk of adverse unilateral effects. On balance, we
    find there are several mobile telephony carriers that provide
    services that consumers view as good substitutes for Sprint's and
    Nextel's offerings. Therefore, although we find that some consumers
    may view Sprint and Nextel to be good substitutes, the availability
    of several equally attractive options significantly reduces the risk
    of adverse unilateral effects.[^203] We also assess the
    substitutability of Sprint's and Nextel's PTT offerings and find
    that they are not close substitutes. In addition, several firms
    currently offer PTT services, and additional firms are likely to
    offer this service in the future, suggesting there is little risk of
    adverse unilateral harm to customers interested in PTT.

95. We found in the *Cingular-AT&T Wireless Order* that the market for
    mobile telephony service in the United States appears to be
    differentiated.[^204] Wireless service carriers do not offer
    completely homogeneous services. Rather, carriers compete vigorously
    on the basis not only of price, but also of other numerous non-price
    features such as call quality, thoroughness of geographic coverage,
    and plan features (*e.g.* PTT).[^205] While carriers can change some
    of these attributes relatively quickly, other attributes such as
    quality and coverage require investments in spectrum and
    infrastructure and are not easily modified. Generally, our analysis
    of product differentiation focuses on the characteristics that
    carriers are unable or unlikely to change quickly, and the potential
    for anticompetitive harms that may result.

96. In a market characterized by product differentiation, a firm's
    ability to raise prices is constrained in part by the threat that
    its customers will shift their purchases to products that are close
    substitutes. If a firm merges with another firm that produces a
    close substitute, some of the lost sales and profits that will occur
    if the first firm raises its prices will be offset by an increase in
    sales of the close substitute made by the firm with which it has
    merged.[^206] The more a buyer of a particular product considers the
    newly acquired product to be their next choice, the greater the
    possible price increase. Therefore, if the services offered by
    Sprint and Nextel are viewed as close substitutes by significant
    numbers of customers, the merger of the two firms could remove a
    constraint on Sprint's and Nextel's ability to raise prices.[^207]
    Alternatively, if most customers consider Sprint and Nextel to be
    more distant substitutes for each other, or have multiple choices of
    equally attractive substitutes, then anticompetitive unilateral
    effects are less likely to occur or may be less significant.

97. The Applicants argue that Sprint and Nextel are not close
    substitutes, which if true, would suggest that the incentive and
    ability to unilaterally increase price is reduced.[^208] The
    Applicants claim that Sprint and Nextel focus on different segments
    of mobile telephony customers -- Nextel on the enterprise market and
    Sprint on the residential market. The record indicates that
    **\[REDACTED\]**[^209] The Applicants also claim that Nextel offers
    an enterprise-friendly push-to-talk feature, and that Sprint
    promotes color screen handsets, picture phones, data use, and
    elimination of overages which are designed to appeal to
    non-enterprise customers.

98. We agree with the Applicants that Nextel is more focused on
    enterprise customers than Sprint. In addition, we find that Nextel
    is somewhat differentiated from all of the other national mobile
    telephony carriers because its service is more heavily oriented
    towards enterprise customers than the other firms[^210] and because
    it dominates the corporate liable segment.[^211] However, recently
    Nextel has increased its appeal to the non-enterprise segment of the
    mobile telephony market. In May 2003, Nextel acquired sixty-six
    percent of Boost Mobile, which has been successfully marketing its
    prepaid service to the consumer market (especially to the youth
    demographic).[^212]

99. Although we agree with the Applicants that Sprint and Nextel
    generally do not share a common customer focus, the evidence in the
    record indicates that there are some product dimensions and customer
    groups for which Sprint is a closer substitute for Nextel than other
    mobile telephony carriers. **\[REDACTED\]**[^213]

100. Further, the Applicants argue that the diversion ratios between
     Sprint and Nextel should be relatively small because they are not
     close substitutes.[^214] The Applicants support these arguments
     with data from Sprint's and Nextel's customer exit surveys,[^215]
     and Wireless Local Number Portability ("WLNP") data.[^216] Using
     these data sources, the Applicants also claim that both Sprint's
     and Nextel's customers regard Cingular and Verizon Wireless as the
     closest substitutes for mobile telephony services.[^217] The
     Applicant's analysis of the WLNP data shows that of the subscribers
     that left Nextel in 2004, **\[REDACTED\]** percent switched to
     Verizon Wireless, **\[REDACTED\]** percent switched to
     Cingular-AT&T Wireless, and **\[REDACTED\]** percent switched to
     Sprint. Of the subscribers who left Sprint in 2004,
     **\[REDACTED\]** percent switched to Verizon Wireless,
     **\[REDACTED\]** percent switched to Cingular-AT&T Wireless, and
     **\[REDACTED\]** percent switched to Nextel. The Applicants found
     similar results when analyzing the customer exit survey data,
     including survey data where customers responded they switched
     mobile telephony carriers for price reasons.

101. We have also conducted an analysis of the substitutability between
     Sprint, Nextel and other mobile telephony carriers using WLNP
     data.[^218] We found that the overall pattern of the WLNP data
     generally indicates that there is significant substitutability
     among *all* five nationwide carriers. In particular, for the
     customers who leave a given carrier, at least **\[REDACTED\]**
     percent of those customers go to each of the other four national
     firms. This indicates that a portion of each of the nationwide
     carriers' customer base views each of the other national carriers
     as close substitutes. This mutual substitution appears to be
     present despite product differentiation that exists across the
     national firms, and indicates that the services provided by the
     other nationwide carriers may be effective substitutes for those of
     the Applicants.

102. However, for several reasons we have limited our reliance on the
     porting data for predicting the likely diversion of customers
     between Sprint and Nextel if either carrier were to change its
     offerings.[^219] The survey data, which indicate the reasons a
     subscriber switches to a new carrier, may be somewhat more useful
     for predicting the likely diversion of customers between Sprint and
     Nextel.[^220] However, these data also have limitations and
     therefore, we do not believe that these data should be relied on
     exclusively to infer the likelihood of adverse unilateral effects.
     For example, the survey data still suffer from the problem that one
     cannot infer from the survey results whether or not the carrier
     that a subscriber is leaving is that subscriber's second choice.

103. Price, as well as non-price attributes, is an important factor for
     purposes of determining the substitutability among carriers.
     Therefore, to assess whether consumers could find comparable
     pricing plans offered by other carriers, we also conducted our own
     survey of national plans offered by the nationwide carriers. The
     survey was limited to plans with a price of approximately \$40 per
     month. The prices and other plan features that were surveyed were
     limited to Internet offerings. This survey found that Nextel
     offered the smallest bucket of peak minutes of the five national
     carriers (400 minutes), and that T-Mobile offered the highest (600
     minutes). Cingular and Verizon Wireless each offered 450
     minutes.[^221] Sprint offered 400 minutes. Therefore, it indicates
     that Nextel's prices may be somewhat more similar to Cingular's and
     Verizon Wireless's than they are to Sprint's.

104. Finally, there are a number of large regional carriers including
     ALLTEL, USCC, and Dobson that may provide competitive options to
     Sprint and Nextel in certain local markets. In particular, we note
     that ALLTEL has gained coverage and customers since its acquisition
     of Western Wireless.[^222] ALLTEL now covers 33 states and
     approximately 72 million people.[^223] ALLTEL also has an
     advantageous roaming agreement with Verizon Wireless, which allows
     it to provide competitive national plans.[^224] Therefore, it may
     serve as an effective substitute to the national firms. In
     addition, the presence of MVNOs provide further competitive
     options.

105. *Push-to-Talk.* A central feature of Nextel's mobile telephony
     service is its PTT service, and therefore we analyze whether other
     mobile telephony carriers' PTT offerings are close substitutes for
     Nextel's offerings. SAFE Coalition argues that Sprint's ReadyLink
     service is Nextel's only significant national competitor in
     integrated dispatch/mobile telephony, and that Verizon Wireless's
     PTT offering is generally not viewed as a good substitute for
     Nextel's PTT features for business customers because Verizon
     Wireless's service has a significantly delayed connect time which
     renders it unsuitable for the instant communications needed by
     these customers.[^225]

106. We find that Nextel is somewhat differentiated from all of the
     other national firms mainly by its PTT service, which currently has
     a strong advantage over all other PTT offerings. Evidence in the
     record indicates that Nextel is the market leader in terms of PTT
     subscribers and performance.[^226] In addition, Nextel's PTT
     service is integrated into most of its pricing plans, while other
     PTT carriers (ALLTEL, Sprint, and Verizon Wireless) price their PTT
     feature as an additional charge to a customer's mobile telephony
     plan.[^227]

107. We find that Sprint does not currently offer a PTT service that is
     a close enough substitute for Nextel's offering that the merger of
     Sprint and Nextel would increase the probability of adverse
     unilateral harm to PTT customers. It appears that ALLTEL's PTT
     service may be a relatively close substitute for Nextel's in
     certain respects, compared to Sprint's and Verizon Wireless's PTT
     services.[^228] Both ALLTEL's and Nextel's in-call latency are
     **\[REDACTED\]**, compared to in-call latency of **\[REDACTED\]**
     for Sprint and Verizon Wireless. In addition, both Nextel and
     ALLTEL offer group calling for large groups; a maximum of
     **\[REDACTED\]** for Nextel and **\[REDACTED\]** for ALLTEL,
     compared to Sprint's maximum group of five. Verizon Wireless does
     not offer group calling for new customers. In addition, Verizon
     Wireless's call set-up time used to be the slowest
     (**\[REDACTED\]** for Verizon Wireless, **\[REDACTED\]** for
     Sprint,[^229] **\[REDACTED\]** for ALLTEL, and **\[REDACTED\]** for
     Nextel), although Verizon Wireless's call set-up time may now be
     faster and comparable to Sprint's since Verizon Wireless
     re-launched its PTT service in February 2005.[^230] We therefore
     find that Nextel currently has a significant advantage in its
     push-to-talk service, in part due to its iDEN technology. However,
     improvements in PTT service which use other mobile telephony
     technologies may reduce Nextel's advantage in the future. Further,
     the availability of PTT may become more widespread. For example,
     USCC has recently introduced its own PTT service.[^231] Moreover,
     additional carriers may begin to offer this service.[^232] While
     Cingular has not announced a PTT service offering, some analysts
     believe that later this year Cingular may announce that it will
     offer a PTT service based on the recently adopted Push To Talk Over
     Cellular (PoC) standard.[^233] Therefore, it appears that other
     carriers may offer further competitive PTT options in the future,
     supporting our conclusion that risk of adverse unilateral effects
     is low for PTT.

#### Competitive Responses by Rivals

108. Two factors that may affect the risk of adverse unilateral effects
     in a differentiated products market are the ability of rival firms
     to replace competition lost through the merger by repositioning
     their product offerings (*i.e.*, changing their products or
     offering new ones similar to those offered by the merged firm) and
     their ability to absorb new customers if the merged firm raises its
     prices.[^234] As to the second point, rival wireless carriers who
     lack sufficient spectrum to add numerous subscribers will provide
     less competitive constraint on the merged firm.[^235]

109. In a given market, if a firm is already present and has comparable
     service coverage to the merged entity, it may be able to reposition
     in the short run by adjusting its pricing, plan features, handsets,
     and advertising to become more competitive with the merged firm's
     products, and thus replace the competition that had existed between
     the merging firms.[^236] In many cases it will be feasible for
     firms to add customers quickly because excess capacity is often
     available and because non-trivial increases in the capacity to
     serve customers can be realized rapidly in established cellular and
     PCS mobile radio systems. However, there are limits to a carrier's
     ability to reposition. For example, firms may not be able to
     quickly expand their operating footprints, purchase additional
     spectrum if needed, secure tower siting permits, improve overall
     quality, or deploy a new technology.

110. In addition to carriers' current ability to absorb new customers,
     expected increases in penetration and usage increase the likelihood
     that the merged entity's rivals will have the capacity to absorb
     additional subscribers in the future. Existing operators will often
     have the capacity to attract customers and increase output should
     the merged entity attempt to exercise market power to the detriment
     of consumers.[^237] We emphasize that although excess capacity by
     Sprint Nextel's rivals is a necessary condition to allow absorption
     of customers, it is not sufficient to insure that Sprint Nextel's
     rivals would have the incentive to reposition. At a minimum,
     however, when a firm is present in a market and has comparable
     service area coverage, the potential for competitive response is an
     important factor.

111. The Applicants submitted an analysis which predicts the ability of
     other carriers to absorb 10 percent of Sprint's and Nextel's
     subscribers in response to a small but significant and
     non-transitory price increase by the merged firm. This analysis,
     which the Applicants refer to as a Subscriber Absorption Capacity
     (SAC) analysis, estimated the ability of rivals to absorb
     additional subscribers, given their existing spectrum holdings and
     technology, in each BTA in the country that was identified using
     the Commission's initial screen criteria.[^238] The Applicants' SAC
     test indicates that Sprint's and Nextel's rivals would have more
     than sufficient excess capacity to absorb 10 percent of Sprint's
     and Nextel's subscribers in all but seven BTAs. The applicants then
     examined those seven BTAs more closely, and presented evidence
     indicating that the merger would be unlikely to have adverse
     competitive effects in any of the BTAs identified by their initial
     screen.[^239] We agree that the Applicants' SAC study provides some
     evidence that the risk of adverse unilateral effects is low.[^240]

112. This conclusion is consistent with our finding in the
     *Cingular-AT&T Wireless Order*.[^241] As part of our investigation
     of the Cingular-AT&T Wireless merger, we performed an analysis of
     the capacity of other firms to absorb subscribers who would prefer
     to change carriers in response to an attempted exercise of market
     power by the merged firm. The results of our study indicated that,
     for most of those markets caught by the initial screen, Cingular
     and AT&T Wireless's rivals collectively possessed the capability to
     respond to a unilateral price increase by absorbing at least 10
     percent of the combined entity\'s market share.[^242]

113. As the merger of Cingular and AT&T Wireless occurred so recently,
     we believe that our finding in the *Cingular-AT&T Wireless Order*
     provides evidence that is relevant in this instance.[^243] The
     level of Sprint's and Nextel's spectrum aggregation in almost all
     markets will be lower than the amount of spectrum held by Cingular
     and AT&T Wireless.[^244] Therefore, the amount of spectrum held by
     Sprint's and Nextel's rivals will be generally greater than the
     amount that was held by Cingular's and AT&T Wireless's rivals. In
     addition, the number of the combined Sprint-Nextel subscribers will
     generally be lower than the number of the combined Cingular-AT&T
     Wireless subscribers. Thus, we believe that our finding in the
     *Cingular-AT&T Wireless Order* provides some evidence that in most
     markets it is likely that Sprint and Nextel's rivals will have the
     capacity to absorb significant numbers of customers.

114. We have also examined the percent of population covered and the
     percent of land covered for each carrier in each market in which we
     believed that the proposed merger of Sprint and Nextel would pose
     some risk of adverse unilateral effects.[^245] We found in all the
     relevant markets that the numbers of carriers with adequate
     population and land coverage significantly lowered the risk of
     adverse unilateral effects as a result of this transaction. We
     believe that a combination of the analysis discussed in the
     *Cingular-AT&T Wireless Order*, our analysis of population and land
     coverage, and the study submitted by the Applicants, allows us to
     conclude that Sprint's and Nextel's rivals likely will have the
     ability to absorb customers and thwart an attempted exercise of
     market power by Sprint Nextel.

#### Marginal Cost Reductions

115. The Applicants claim that the Sprint-Nextel merger will create
     substantial synergies, including efficiencies that will lead to
     pressure to reduce wireless prices. They claim that certain cost
     reductions would create incentives for the merged firm to reduce
     its price in order to sell more output. We find that the merger is
     likely to result in marginal cost reductions.[^246] Marginal cost
     is the increment, or addition to costs that results from producing
     one more unit of output.[^247] Marginal cost reductions may reduce
     the merged firm's incentive to elevate price, and thus are relevant
     to our analysis of unilateral effects. [^248] We find that the
     likelihood of marginal cost reductions further supports our
     conclusion that the risk of adverse unilateral effects is
     low.[^249]

#### Conclusion

116. In conclusion, we find that this transaction does not pose a risk
     of harm from unilateral effects. We find on balance that there are
     several mobile telephony services that can serve as good
     substitutes for the services of Sprint and Nextel. Therefore,
     although we find that some consumers may view Sprint and Nextel to
     be good substitutes, the availability of several equally attractive
     options significantly reduces the risk of adverse unilateral
     effects. We have examined market shares, and the number of carriers
     with substantial coverage in the geographic markets identified by
     the initial screen. This analysis, in conjunction with our finding
     that marginal cost reductions may reduce the merged firm's
     incentive to elevate price, indicates that adverse unilateral
     actions by Sprint Nextel are unlikely. In addition, the Applicants'
     SAC analysis indicates that Sprint Nextel's rivals will have
     capacity to absorb subscribers, and thus supports our finding that
     adverse unilateral action on the part of Sprint Nextel is unlikely.
     Further, we find that Sprint's PTT service is not currently a close
     substitute for Nextel's PTT service and that there are likely to be
     additional competitive PTT offerings in the future, suggesting
     there is little risk of adverse unilateral harm to customers
     interested in PTT.

### Market-by-Market Evaluation 

117. In this section, we build on our general analyses of likely
     competitive effects by undertaking a more granular analysis of
     local markets. That is, we have found, based on conditions that are
     common across U.S. markets (such as technological heterogeneity)
     and on typical conditions prevailing in most local markets (such as
     number of firms and market shares) that both collusive behavior and
     adverse unilateral effects are unlikely. Here, we consider
     individual markets to determine whether conditions are such that
     localized harm from the merger would be likely. While all local
     areas are scrutinized, among those to which we pay particular
     attention are the areas initially identified as of potential
     concern by the Applicants' SAC analysis.

118. In undertaking this market-by-market analysis, we consider
     variables that the general analyses indicate are important for
     predicting the incentive and ability of carriers to successfully
     restrict competition on price or non-price terms through
     coordinated interaction, and the incentive and ability of the
     merged entity unilaterally to elevate prices or suppress output.
     These include: the total number of rival carriers; the number of
     rival firms that can offer competitive nationwide service plans;
     the coverage of the firms' respective networks; the rival firms'
     market shares; the merged entity's post-transaction market share
     and how that share changes as a result of the merger; the amount of
     spectrum suitable for the provision of mobile telephony services
     controlled by the combined entity; and the spectrum holdings of
     each of the rival carriers. In reaching determinations, we balance
     these factors on a market-specific basis, and consider the totality
     of the circumstances in each market. Thus, for example, if our
     count of the number of rival carriers and our scrutiny of their
     network coverage in a specific market indicate that the response of
     rival carriers will likely be sufficient to limit the ability and
     incentive of the combined entity to raise price, we find that the
     transaction will not cause unilateral harm to competition even in
     the presence of a relatively high post-transaction market share for
     the combined entity. We also scrutinize, and base our
     determinations on, the uniformity of competitive conditions in
     local markets. Thus, in some instances, we find that the
     transaction is not harmful to competition in a particular market if
     the potential harm from the transaction is confined to a small
     enclave within the market, and this harm is likely to be
     ameliorated by the more favorable competitive conditions in the
     majority of the market.

119. Based on our examination of these variables and the interaction
     among them, we find that there are no markets in which the
     transaction is likely to result in competitive harm. First, we find
     that competitive harm is unlikely in each CEA in which there will
     be four or more competitors present post-transaction with
     thoroughly built-out networks, adequate bandwidth, and the ability
     to offer competitive nationwide service plans.[^250] This finding
     applies to the bulk of the CEAs flagged for further review by the
     initial screen, including all the largest CEAs caught by the
     screen. Second, at the other extreme, we find that there are no
     CEAs in which the merger would reduce the number of competitors to
     two or fewer, a merger consequence that we would view as presenting
     a likelihood of competitive harm. Third, regarding all remaining
     markets, those not falling into either of the categories above, we
     find that competitive harm is unlikely as well. In many of these
     markets, post-merger there will be a reduction from four to three
     in the number of firms fully built out and able to offer national
     pricing plans. However, there are other factors that reduce the
     risk of harm. In many CEAs, for example, there are one or more
     other firms offering competitive nationwide service that have a
     significant---but not fully built-out---presence. We find that
     firms in this situation have a realistic ability to expand their
     presence and be effective competitive constraints in these markets.
     In all other cases, there are one or more regional firms that are
     extensively built out and have achieved significant market share;
     these firms, combined with the merged entity, other competitors
     with nationwide service plans, and circumstances relevant to each
     specific market, results in the merger not likely resulting in
     competitive harm. We find that these strong regional firms are
     closely comparable alternatives for many consumers in these
     markets. And it is not the case for any of these markets that the
     merged firm's market share would be so high as to indicate likely
     competitive harm.

120. Finally, while we reach no firm conclusions about the efficacy of
     the Applicants' SAC analysis as an identifier of potentially
     anticompetitive markets, we have, out of an abundance of caution,
     evaluated those local markets that the SAC analysis flagged. As
     discussed in detail in Appendix C, we find that competitive harm is
     unlikely there.

121. As a part of our market-by-market analysis, we have verified that
     where we find that a firm is likely to be an effective competitive
     constraint, it in fact has sufficient bandwidth to enable it to
     play that role. We recognize that the nationwide firms other than
     the Applicants have 20 megahertz or less of spectrum available in
     some major markets. This is most often true of T-Mobile. However,
     in all but the largest markets 20 megahertz, or even less, may be
     adequate in the near term. Moreover, to the extent that
     T-Mobile---or any other firm---competing with the merged entity
     might be spectrum constrained as growth occurs, we note that we
     plan to make Advanced Wireless Services spectrum available at
     auction as early as June 2006.[^251] This constitutes 90 megahertz
     of capacity, nationwide.

122. The absence of any local markets in which competitive harm would be
     expected as a result of the merger appears to reflect the fact that
     Sprint and Nextel have typically been the third, fourth, or later
     entrants to a local market. Sprint and Nextel were not among the
     early A and B block cellular providers when mobile telephony was
     licensed on a duopoly basis with only two licenses per market.
     Rather, we find that in markets where Sprint and Nextel are both
     substantially built out, there are at least two other providers
     with a significant presence (the original A and B block cellular
     providers or their successors-in-interest), and often more than two
     other providers are present. Similarly, while there are markets in
     which Sprint has attained a leading market share and other markets
     in which Nextel has attained a leading market share, there are no
     local markets in which both of the Applicants have the dominant
     market shares that would suggest adverse competitive harm is
     likely.

### Roaming

123. In this section, we consider the potential vertical or other
     non-horizontal harms of the proposed transaction in the mobile
     telephony market. The only issue of this type on the record or that
     we identify in our independent analysis are the possible impacts of
     the proposed transaction on roaming in this market.

124. In the Application, Sprint and Nextel address the impact of the
     merger on the availability of automatic roaming services. Sprint
     and Nextel state that the merged entity "do\[es\] not expect to
     terminate any existing roaming agreements as a result of the
     merger."[^252] Sprint currently has over 90 domestic, and over 40
     international, roaming agreements.[^253] Although it expects that,
     "as a result of the expanded geographic coverage of its CDMA
     network, the merged company will avoid some roaming charges that
     Sprint currently incurs," Sprint states that "there is no list of
     markets for which the merged firm would not need roaming
     agreements" after the merger.[^254] In addition, some of Sprint's
     roaming partners filed comments in support of the merger. They
     claim that their roaming relationship with Sprint has brought
     access to technology and resources, which helps to provide complete
     wireless coverage to rural areas.[^255]

125. A number of other commenters and one petitioner have either
     requested that the Commission impose a condition requiring the
     merged entity to enter into reasonable, non-discriminatory, roaming
     agreements,[^256] or declare a national policy requiring large
     nationwide carriers to enter into reasonable, reciprocal, roaming
     agreements.[^257] For instance, one of Nextel's domestic roaming
     partners, SouthernLINC Wireless, contends that a condition
     requiring the merged entity to enter into roaming agreements is
     necessary because it has encountered great difficulty in trying to
     negotiate a reasonable roaming agreement with Nextel or its
     affiliate, Nextel Partners. Specifically, SouthernLINC Wireless
     contends that: Nextel has refused to interconnect its subscribers
     for PTT and dispatch, while providing interconnection for these
     services to Nextel Partners' subscribers; Nextel charges
     SouthernLINC Wireless roaming rates that are much higher than the
     rates other carriers pay; and Nextel Partners has refused to enter
     into roaming agreements with SouthernLINC Wireless.[^258] Sprint
     and Nextel believe that these requests should be addressed in a
     rulemaking proceeding on roaming rather than in this license
     transfer proceeding.[^259]

126. We find that the roaming issues raised by these parties do not
     raise substantial and material questions of fact regarding the
     proposed merger before us. Although this merger would reduce the
     number of nationwide carriers, it is not likely to result in
     anticompetitive effects regarding roaming services because it will
     not reduce the number of iDEN or CDMA nationwide roaming partners
     for smaller, rural, and/or regional providers. Since the bargaining
     positions of smaller providers who use either iDEN or CDMA networks
     and who want to enter into roaming agreements with Nextel or
     Sprint, would be the same post-merger as they were before the
     merger, the reduction in the number of nationwide carriers does not
     create merger-specific competitive harm in the market for roaming
     services.

127. We are concerned, however, about the general difficulties that
     smaller, rural, wireless providers are facing in trying to
     negotiate automatic roaming agreements with nationwide
     carriers.[^260] RCA and USCC, for example, contend that rural
     customers are at risk of not having the technical ability to roam
     on the merged entity's network.[^261] Our manual roaming rule
     requires other carriers to complete calls initiated by Sprint
     Nextel's customers where Sprint Nextel cannot because it has
     neither its own signal nor an automatic roaming agreement.[^262] To
     address the potential harm identified by RCA and USCC and to ensure
     compliance with the manual roaming requirement, we adopt as a
     condition to our grant in this Order a reciprocal duty, *i.e.*,
     that Sprint Nextel may not prevent its customers from reaching
     another carrier and completing their calls in these circumstances,
     unless specifically requested to do so by a subscriber. We also
     note that if a roaming partner believes that Sprint Nextel is
     charging unreasonable roaming rates, it can always file a complaint
     with the Commission under section 208 of the Communications
     Act.[^263]

128. We recognize that the manual roaming requirement and the ability to
     file a section 208 complaint may not fully address the concerns
     raised by the commenters. However, given the broad scope of the
     concerns raised -- many of which seem to call for a reevaluation of
     the Commission's roaming rules and policies -- they are more
     appropriately addressed in the context of a rulemaking proceeding.
     As we stated in the *ALLTEL-Western Wireless Order*, the Commission
     plans to initiate a proceeding to examine whether our rules
     regarding the roaming requirements applicable to CMRS providers
     should be modified to take into account current market conditions
     and developments in technology. This proceeding will afford
     interested parties an opportunity to comment on a variety of
     roaming issues, including manual and automatic roaming, technical
     considerations, and small and rural carrier roaming issues.[^264]

### Potential Public Interest Benefits

129. The Commission has recognized that "\[e\]fficiencies generated
     through a merger can mitigate competitive harms if such
     efficiencies enhance the merged firm\'s ability and incentive to
     compete and therefore result in lower prices, improved quality,
     enhanced service or new products."[^265] Under Commission
     precedent, however, the Applicants bear the burden of demonstrating
     that the potential public interest benefits of the proposed
     transfer outweigh the potential public interest harms.[^266] In
     addition to assessing the potential competitive harms of the
     proposed transaction, we also consider whether the combination of
     these companies' wireless operations is likely to generate
     verifiable, merger-specific, public interest benefits.[^267] We
     examine whether operation of the combined entity could yield
     consumer benefits unattainable absent a merger. For the reasons
     discussed below, we have determined that the Applicants' proposed
     transaction will likely result in some merger-specific public
     interest benefits. We reach this result knowing that many of these
     benefits may be challenging to achieve in the near future because
     of sizable technological and financial requirements. As a result,
     it is difficult for us to quantify the magnitude of these benefits
     or the time horizon in which these benefits will be realized.[^268]

130. The Commission applies several criteria to decide whether a
     purported merger benefit should be considered and weighed against
     potential harms. First, the claimed benefit must be transaction- or
     merger-specific. This means that the claimed benefit "must be
     likely to be accomplished as a result of the merger, but unlikely
     to be realized by other means that entail fewer anticompetitive
     effects."[^269] Second, the claimed benefit must be verifiable.
     Because much of the information relating to the potential benefits
     of a merger is in the sole possession of the Applicants, they are
     required to provide sufficient evidence supporting each benefit
     claim so that the Commission can verify the likelihood and
     magnitude of the claimed benefit.[^270] In addition, as the
     Commission has noted, "the magnitude of benefits must be calculated
     net of the cost of achieving them."[^271] Furthermore, speculative
     benefits that cannot be verified will be discounted or dismissed.
     Thus, as the Commission explained in the *EchoStar-DirecTV Order*,
     "benefits that are to occur only in the distant future may be
     discounted or dismissed because, among other things, predictions
     about the more distant future are inherently more speculative than
     predictions about events that are expected to occur closer to the
     present."[^272] Third, the Commission also stated that it "will
     more likely find marginal cost reductions to be cognizable than
     reductions in fixed cost."[^273] In general, reductions in marginal
     costs are more likely than reductions in fixed costs to result in
     lower prices for consumers.[^274]

131. Based on these factors, we find that this transaction could lead to
     efficiencies that result in reduced prices for consumers and/or
     increased coverage, improved service quality, and more extensive
     advanced service offerings. These merger-specific cost savings and
     cost avoidance may be achieved in a variety of ways, including
     elimination of redundant cell sites,[^275] reduced reliance on
     outside networks for backhaul operations,[^276] and avoidance of
     cost duplication in the development and deployment of new
     technologies.[^277] We also find that the larger size of the Sprint
     Nextel entity will likely create opportunities to obtain quantity
     discounts from network equipment and handset suppliers.[^278]
     Additional savings may be realized through an efficient combination
     of the development and operation of the billing, sales, and
     marketing functions of each of the separate entities after the
     merger.[^279] Finally, we find that the proposed acquisition may
     result in greater intermodal competition between mobile wireless
     and wireline mass market services.[^280]

#### Service Quality and Coverage

132. We find that current and future Sprint and Nextel subscribers will
     likely receive improved service quality as a result of the
     coordinated improvements to the CDMA and iDEN networks.[^281]
     Applicants plan to consolidate cell sites, add CDMA infrastructure
     to existing iDEN cell sites, and increase the number of iDEN cell
     cites.[^282] This will likely reduce dropped and blocked calls for
     current Sprint and Nextel customers.[^283]

133. The extent of potential service enhancements will depend on the
     cell site locations, their proximity to each other, as well as the
     physical and commercial attributes of the cell sites. The
     Applicants will have access to over 43,000 cell sites nationwide
     operating in the 800 MHz, 900 MHz, and 1.9 GHz bands located in
     over 350 MSAs.[^284] Furthermore, Sprint estimates that it will
     build **\[REDACTED\]** new CDMA cell sites and incorporate
     **\[REDACTED\]** CDMA cell sites into Nextel iDEN cell sites by the
     end of 2008.[^285] Of these **\[REDACTED\]** cell sites, Sprint
     estimates that it will consolidate **\[REDACTED\]** current CDMA
     cell sites with Nextel sites and incorporate **\[REDACTED\]** new
     cell sites with existing or newly built iDEN cell sites.[^286] We
     find that successful implementation of these plans should result in
     improved service for existing Sprint and Nextel customers.
     Subscribers to both networks should benefit as cell site
     optimization leads to fewer coverage holes, improved building
     penetration, better audio quality and fewer dropped calls.[^287]

#### Next Generation Service

134. We also find that the Applicants' plan for the merged entity to
     implement its 3G technology, known as1xEV-DO, over much of its
     current network, and ultimately upgrade the entire combined Sprint
     Nextel network to 1xEV-DO Revision A, should create merger-specific
     benefits. Prior to the merger, Nextel had not selected a technology
     to bring next generation services to its subscribers. As a
     consequence of the merger, Nextel subscribers may be able to
     benefit from the next generation services that Sprint asserts that
     it will provide.[^288] By the end of 2006, Sprint claims that the
     technology will be available to the vast majority of its licensed
     markets.[^289] The Applicants assert that post-merger they will
     follow this deployment with the 1xEV-DO Revision A upgrade
     throughout their network.[^290] By early 2008, Sprint plans to
     complete the deployment of 1xEV-DO Revision A, which may enable
     high performance push-to-talk capabilities and peak downlink data
     rates of 3.1 Mbps with an anticipated average rate of 400 to 600
     kbps.[^291] Expected user average uplink data rates range from 300
     to 500 kbps.[^292]

135. Sprint Nextel will initially operate three radio access networks:
     iDEN and two CDMA variations − 1xRTT and 1xEV-DO.[^293] In order to
     provide access to broader services, the Applicants represent that
     they will investigate a multi-mode, multi-band handset that will
     support 1xRTT voice and data, 1xEV-DO data, and iDEN.[^294] In
     addition, the parties plan to deploy gateways to achieve
     interoperability between the CDMA and the iDEN networks.[^295]

136. If the Applicants implement the above measures and are able to
     overcome any integration challenges,[^296] iDEN subscribers should
     benefit from faster data rates and interoperability between CDMA
     and iDEN push-to-talk capabilities. Sprint subscribers can expect
     to benefit from faster access to the enhanced capabilities of the
     1xEV-DO Revision A network, including a significantly improved
     push-to-talk feature. Furthermore, should a multi-mode, multi-band
     handset become available, Sprint Nextel subscribers may have access
     to a broader array of network resources.

#### Economies of Scale and Operating Synergies

137. It is also likely that the transaction will result in scale
     economies and operating synergies that would not otherwise be
     available to the Applicants if each entity continued separate
     operations. Although it is difficult to verify the Applicants'
     dollar value estimates, there is ample evidence in the public
     domain that enables us to set reasonable bounds on the capital
     investment required for a wireless carrier to deploy a next
     generation network, a capital expense that Nextel will be able to
     avoid. In addition, we believe that it is likely that the
     Applicants will likely reap significant savings by merging their
     billing, customer care, sales, and marketing systems.

138. We find it plausible that Sprint Nextel will be able to improve the
     quality of CDMA service while reducing the number of its cell
     sites, capital expenditures, and operational costs. By adding CDMA
     equipment to Nextel's existing and future cell sites, Sprint Nextel
     will likely be able to co-locate a reasonable number of CDMA and
     iDEN cell sites while improving CDMA coverage.[^297] This approach
     should enhance CDMA quality of service, reduce the need to build
     additional cell sites, and reduce cell site operating costs.[^298]

139. We believe that it is also likely that Sprint Nextel will be able
     to reduce backhaul costs as a result of the merger. After the
     merger, a considerable proportion of Nextel's backhaul traffic may
     be shifted from facilities currently leased from other carriers to
     Sprint's wireline network.[^299] The use of the Sprint
     long-distance network and the metropolitan area networks may enable
     Sprint Nextel to bypass much of the ILEC transport facilities in
     several areas of the country.[^300] This may enable Sprint Nextel
     to reduce operating expenses.[^301]

140. It is also likely that Sprint Nextel will achieve merger specific
     efficiencies in information technology, billing, customer care,
     sales and marketing systems.[^302] The Applicants also note that
     the merger eliminates the need for Nextel to deploy its own
     advanced wireless service.[^303] Although the Applicants assert
     that cost avoidance is estimated at \$4.8 billion, it is not
     possible for us to verify the magnitude of the savings because this
     amount depends, in part, on the technology that Nextel would have
     selected to provide advanced services had it not merged with
     Sprint.[^304] The Applicants contend that Nextel had not yet
     decided on a technology for delivering advanced services to its
     customers.[^305] In addition, Sprint would necessarily have
     additional costs to replace its network, as well as to migrate
     Nextel customers to its new advanced technological standard.
     However, the scale economies associated with implementation of a
     larger network may enable Sprint Nextel to negotiate lower prices
     from suppliers. In addition, Nextel can benefit from the investment
     that Sprint has already made to upgrade its own CDMA network.[^306]

#### Intermodal Competition

141. We conclude that the proposed merger is likely to result in
     benefits to the nascent competition between wireless and wireline
     services for local telephony services provided to mass market
     consumers.[^307] As the Commission has noted in numerous
     proceedings, a limited but growing proportion of mass market
     consumers use wireless networks as their primary connection to the
     public switched telephone network or have chosen to "cut the cord"
     and use wireless services in lieu of wireline services for all of
     their local exchange services.[^308] The Commission has
     consistently sought to create the regulatory conditions for robust
     intermodal competition, and we remain strongly committed to
     achieving that important policy goal.[^309]

142. We find that the proposed acquisition is likely to result in
     greater intermodal competition based on the fact that the
     Applicants are independent wireless carriers.[^310] First, we agree
     with the Applicants that the lack of a wireline affiliation in the
     instant application is relevant to our determination of the
     likelihood of benefits to intermodal competition between mobile
     wireless and wireline services. Nextel is an independent wireless
     carrier, and we classified Sprint as an independent wireless
     carrier in the *Cingular-AT&T Wireless Order*.[^311] The Commission
     has found that an independent wireless carrier's incentives can
     differ significantly from those of a wireline-affiliated carrier.
     Specifically, the Commission determined in the *Cingular-AT&T
     Wireless Order* that a wireline-affiliated carrier would have an
     incentive to protect its wireline customer base from intermodal
     competition while an independent wireless carrier would not.[^312]
     The Applicants cite to service offerings and promotions their
     respective firms have undertaken that arguably have encouraged
     wireless substitution for wireline voice services.[^313] The
     Applicants present data that demonstrates that independent wireless
     carriers have a larger percentage of wireless-only customers than
     customers of ILEC-affiliated wireless carriers.[^314] Moreover,
     there is no evidence that Sprint's or Nextel's mobile wireless
     strategies are influenced by a concern over any detrimental impact
     on subscription to wireline local exchange service. Furthermore,
     information Sprint has provided about its pricing strategies
     indicates that the prices of its wireless offerings are not related
     to whether the service is being offered within or outside of its
     wireline company's footprint.[^315] Although the transaction will
     result in the loss of one independent mobile wireless competitor to
     wireline mass market services, we nevertheless conclude that
     post-acquisition the merged firm will act in a manner that is
     likely to increase intermodal competition between wireless and
     wireline services.

143. Second, we conclude that intermodal competition may benefit from
     the merger efficiencies discussed above.[^316] The Applicants have
     identified savings from lower development and deployment costs,
     information technology, billing, sales, and marketing expenses,
     which should permit the firm to charge lower prices and provide
     better services.[^317] Other sources of post-acquisition
     cost-savings include improved network coverage and utilization of
     Sprint's metropolitan area networks for Nextel's backhaul
     needs.[^318] To the extent that these and other possible
     efficiencies result in lower prices and/or quality of service
     improvements, intermodal competition is likely to increase as these
     benefits increase the attractiveness of mobile wireless service
     relative to wireline service.

#### Public Safety

144. We do not find that the merger will benefit public safety. The
     record does not clearly demonstrate significant merger-specific
     benefits in the near term with respect to E911 deployment,[^319]
     CALEA implementation,[^320] 800 MHz rebanding,[^321] or homeland
     security.[^322] We are particularly concerned about the merged
     entity's progress toward E911 compliance. The applicants are
     obligated by FCC rule to ensure that 95 percent of handsets are
     Phase II E911 compliant by December 31, 2005.  Nextel has admitted
     that it "anticipates that Sprint Nextel will likely not achieve the
     Commission's 95 percent A-GPS handset penetration requirement until
     December 31, 2007."[^323] The FCC has an obligation to promote
     "safety of life and property" and to "encourage and facilitate the
     prompt deployment throughout the United States of a seamless,
     ubiquitous, and reliable end-to-end infrastructure" for public
     safety.  The provision of 911 service is critical to our nation's
     ability to respond to a host of crises.  This Commission has a
     longstanding and continuing commitment to a nationwide
     communications system that promotes the safety and welfare of all
     Americans.  We believe that E911 deadlines are therefore critically
     important.  The fact that the applicants have indicated that they
     will likely fail to meet our E911 December 31, 2005 penetration
     requirement significantly undermines any public safety benefits
     they claim for this merger.  We confirm our commitment to the E911
     rules and remind the Applicants that they, like all carriers, are
     obligated to comply with our E911 rules, including the requirement
     that carriers electing a handset-based E911 solution achieve 95
     percent penetration by the end of this year.[^324] We will not
     hesitate to take enforcement action if this deadline is not met.

## 2.5 GHz Band

145. In this section, we analyze the potential for both competitive
     harms and public interest benefits arising from the proposed
     transaction's aggregation of Sprint and Nextel's spectrum holdings
     in the 2.5 GHz band. As explained below, we find that the record
     here supports neither the allegations of harms nor those of
     substantial anticipated benefits.

146. In 2003, the Commission, recognizing the lack of vigorous
     development and use of spectrum in this band, initiated a
     proceeding to realign the 2.5 GHz band plan[^325] and adopt more
     flexible technical rules to permit the provision of new and
     innovative wireless services.[^326] In July 2004,[^327] the
     Commission transformed the rules and policies governing the
     licensing of the Educational Broadband Service (EBS), formerly
     known as the Instructional Television Fixed Service (ITFS), and the
     Broadband Radio Service (BRS), formerly known as the Multipoint
     Distribution Service (MDS), and the Multichannel Multipoint
     Distribution Service (MMDS), in the 2.5 GHz band. Specifically, the
     Commission realigned the interleaved band plan into three spectrum
     blocks,[^328] and established a transition plan for relocating EBS
     and BRS licensees from their current channel locations to their new
     spectrum blocks.[^329] Under the new flexible rules, it has not yet
     become clear exactly what services and markets will develop
     following completion of the transition plan.

147. Sprint and Nextel are the two largest current holders of rights to
     spectrum in the 2.5 GHz band.[^330] Sprint holds spectrum rights in
     190 BTAs, on average 26.8 MHz licensed and 57.7 MHz leased in each
     BTA. Nextel holds rights in 281 BTAs, on average 35.7 MHz licensed
     and 53.7 MHz leased in each BTA. In most cases, these holdings do
     not significantly overlap, and the proposed merger will combine
     applicants' regional holdings into a virtually nationwide footprint
     in the 2.5 GHz band (nearly 85% of the pops in the top 100
     markets).[^331]

148. Applicants argue that this combination will produce public interest
     benefits, after transition of the 2.5 GHz band, by allowing Sprint
     Nextel to accelerate the deployment of "wireless interactive
     multimedia services" (WIMS).[^332] Although some new broadband uses
     in the 2.5 GHz band are still in the developmental stage,
     Applicants envision that WIMS will be a mobile and fixed,
     interactive service that will provide fast initial average downlink
     throughput rates per carrier of 2Mbps to 4Mbps.[^333] Applicants
     expect that these services will likely be data-centric and focused
     on stationary and portable consumer electronic and
     computing-oriented devices and hardware.

149. On the other hand, Petitioners and commenters argue that the
     proposed transaction would create excessive concentration in a
     unique spectrum resource that could allow Sprint Nextel to develop
     market power in yet to be developed markets, resulting in public
     interest harms such as higher prices, lower incentives to innovate,
     and warehousing.

150. As an initial matter, we reject Applicants' assertion that BRS is
     too nascent to be considered in our review process.[^334] We
     believe, as CFA/CU argues, that it is appropriate to consider the
     impact of the proposed merger on existing and developing uses of
     the BRS spectrum and leased EBS spectrum.[^335] Given the history
     of underutilization of this spectrum[^336] and the uncertainty
     concerning when and what types of new services will be provided
     using this spectrum (and what competing services there will be at
     the time), we find it neither prudent nor possible to define
     precise relevant product or geographic markets as we have above for
     Sprint and Nextel's other licenses supporting mobile
     telephony.[^337] Instead, we assess the potential effects of the
     BRS spectrum transfer on competition in the two existing relevant
     product markets where BRS seems most likely to be used: (1) the
     mobile data services market, and (2) the fixed broadband services
     market. We follow the Commission's decision in the *Cingular-AT&T
     Wireless Order* and do not count spectrum holdings in the 2.5 GHz
     band as potential spectrum for the provision of voice service for
     the purposes of our review.[^338]

151. Under this approach, considering the record before us, we conclude
     below that the merger of the Applicants' holdings in the 2.5 GHz
     band will not likely result in public interest harms and that the
     alleged benefits are insufficiently concrete. We find the harms of
     undue concentration alleged by Petitioners unlikely and/or not
     merger-specific for a number of reasons. The holdings of the
     applicants do not generally overlap, and the merger would thus not
     increase concentration in most local markets. Substantial amounts
     of 2.5 GHz spectrum remain for other competitors. Sprint Nextel
     will have strong, nationwide competitors with sufficient spectrum
     outside the 2.5 GHz band and powerful incentives to compete in all
     the potentially relevant product markets. The 2.5 GHz band does not
     appear to be a uniquely suitable input for any specific market. The
     degree and type of concentration resulting here is consistent with
     the policies reflected in the rules governing the auctioning and
     transfer of this particular spectrum. The onset of competitors'
     needs for additional spectrum generally will align with the arrival
     of suitable spectrum in future auctions, including those for
     Advanced Wireless Services (AWS). Given these factors, a nationwide
     footprint in the 2.5 GHz band does not bestow a unique or excessive
     competitive advantage. Furthermore, Applicants' commitment to
     develop the spectrum, which we make a condition to our approval of
     this merger, gives additional comfort against any potential for
     relaxed incentive. We therefore conclude that the petitions to deny
     the transfer application based on effects on BRS and EBS spectrum
     do not raise substantial and material questions of fact.[^339]
     Finally, we further conclude that, at this time, claims that the
     merger will result in specific public interest benefits, while
     promising and encouraging, remain too speculative to deserve
     significant weight.

### Potential Public Interest Harm 

#### Mobile Data Services Market

152. In our effort to discern the potential competitive impact of the
     proposed merger with regard to the 2.5 GHz band, we first consider
     the impact that the proposed merger may have on the mobile data
     services product market,[^340] which would include mobile WIMS
     services as described by the Applicants.

153. Several petitioners and commenters raise concerns about the amount
     of 2.5GHz spectrum Sprint Nextel would control, both in local
     markets and in the aggregate, and its unique position as a provider
     with a national footprint in this band.[^341] Alleged potential
     harms include: spectrum warehousing; delays in service launch; and
     a lack of service and competitive prices.[^342] Petitioners claim
     that the problems associated with the size of Sprint Nextel's BRS
     holdings are exacerbated by a lack of available spectrum suited to
     compete with the merged entity's BRS holdings.[^343] Petitioners
     assert that these circumstances would result in few firms being
     able to prevent Applicants from exercising market power, creating a
     high risk of unilateral effects.[^344] Based on their position that
     Sprint Nextel would hold too much spectrum in given markets and
     that the formation of a national BRS provider would give Sprint
     Nextel unchecked market power,[^345] petitioners contend that
     Commission consent to the merger should be conditioned by imposing
     various measures -- including spectrum divestiture,[^346] spectrum
     caps,[^347] specific roaming requirements,[^348] porting
     requirements for local markets,[^349] and other requirements -- on
     the merged entity.[^350] For a combination of reinforcing reasons
     we find the alleged potential harms unlikely and the proposed
     remedies unnecessary.

154. According to the Applicants, the majority of the 202
     megahertz[^351] of BRS/EBS spectrum in the 2.5 GHz band will remain
     available to rival competitors post-merger.[^352] Further,
     Applicants argue that competitors will have access to nearly 300
     megahertz of spectrum in other licensed bands that could be used to
     provide other innovative wireless services.[^353] Specifically,
     Applicants state that 130 megahertz of unassigned AWS spectrum will
     become available in the following bands with no limits on the total
     amount of spectrum licensees are permitted to hold: 90 megahertz at
     1710-1755/2110-2155 MHz; 10 megahertz at 1915-1920/1995-200 MHz; 10
     megahertz at 2020-2025/2175-2180 MHz; and 20 megahertz of currently
     unpaired spectrum at 2155-2175.[^354] Moreover, Applicants claim
     that additional spectrum is available for innovative wireless
     services including 78 megahertz of spectrum in the 700 MHz band and
     the portions of the 43 megahertz of Wireless Communications
     Services (WCS) spectrum to which Verizon Wireless and Cingular
     already have access.[^355]

155. Petitioners dispute the substitutability of alternative spectrum,
     claiming that broadband services in the 2.5 GHz band constitute a
     separate mobile, broadband data service. They argue that the
     alternative spectrum proposed by Sprint and Nextel is ill-suited
     for high-speed wireless multimedia service applications.[^356]
     Moreover, CTCNet and NY3G argue that the future spectrum offerings
     cited by Applicants will either be inappropriate for the provision
     of such services or unavailable in channel sizes that would allow a
     provider to compete with the Sprint Nextel holdings.[^357]

156. We do not find petitioners' claims persuasive. We believe that the
     interconnected mobile data services market will remain competitive
     post-transaction and that significant competition will continue to
     grow from existing CMRS providers. The record reflects that
     significant amounts of spectrum currently exist or are expected to
     become available that will be conducive to the provision of
     competitive interconnected mobile data services. Furthermore,
     although the Commission has recognized that broadband may be
     offered in the 2.5 GHz band,[^358] we believe that it is premature
     to conclude which spectrum bands will support the services desired
     in this rapidly evolving market. What is clear, at this point in
     the development of these nascent services, is that there is
     meaningful competition among current mobile data service providers
     and that substantial opportunities exist for service providers to
     develop and offer even higher speed services over numerous spectrum
     blocks that will become available in the future. Thus, we believe
     that the mobile data market that BRS licensees and entities leasing
     EBS spectrum may enter is competitive.

157. Furthermore, we are not persuaded by petitioners' arguments that
     the 2.5 GHz band is intrinsically superior to other spectrum for
     the provision of wireless services.[^359] As Applicants
     acknowledge, while there is great promise for the development of
     broadband services in the 2.5 GHz band, and indeed, high-speed
     wireless Internet access services have already been deployed
     therein notwithstanding the current interleaved band plan,[^360]
     each spectrum band has its own advantages and disadvantages for the
     provision of services.[^361] Finally, while we, at this time, are
     not certain as to the exact timing of availability of alternative
     spectrum, we anticipate that as the transition period for BRS/EBS
     expires, other "WIMS-capable" spectrum should become accessible to
     competitors. Therefore, we find that if the 2.5 GHz band is used
     for the provision of mobile data service, it will be one of many
     existing and potential inputs into the mobile data services market.
     Accordingly, we conclude that the proposed merger will not harm
     competition in the wireless interconnected mobile data services
     market.

158. We also conclude that the merger will not cause any competitive
     harm in the BRS band in any specific local market. Because the 2.5
     GHz band holdings of the Applicants do not significantly overlap,
     the merger itself will generally not increase concentration in
     local markets. Applicants have provided information concerning the
     areas and populations they currently cover in terms of
     MHz-Pops[^362] both for spectrum licensed to the Applicants and for
     spectrum that they lease from other entities.[^363] In response to
     a request for further information from Commission staff, Applicants
     also provided their estimate of the average bandwidth available to
     them in each BTA, both before and after the merger.[^364] The vast
     majority of BRS holdings of Sprint and Nextel are complementary,
     *i.e.* they generally do not overlap.[^365] Thus, for most of the
     markets where the merged entity will hold BRS licenses, the merger
     itself will have little impact**.** Notably, in only seventeen BTAs
     will the merger result in a ten percentage point or more increase
     in MHz-Pops covered by the merged company (whether by license or
     lease) over and above the MHz-Pops currently covered by the company
     with the larger spectrum holding in the market.[^366] In only four
     of those seventeen BTAs (Lewiston-Moscow, Idaho, Bellingham,
     Washington, Oklahoma City, Oklahoma, and Danville, Illinois) will
     the merger result in an increase of over twenty percentage points
     in licensed and leased MHz-Pops.[^367] We note that these four
     markets are relatively small in population size and that the
     combined entity would not hold forty percent of the combined
     MHz-Pops licensed in these four markets.[^368] The merged entity
     would hold more than fifty percent of the leased holdings in only
     Bellingham (fifty-eight percent).[^369] Therefore, in these
     markets, there will remain substantial amounts of spectrum that
     will not be under the control of Applicants. Furthermore, if
     examined in terms of average bandwidth available to the Applicants
     (whether licensed or leased), the merger will result in an increase
     in only 65 of 493 BTAs, and in the majority of those BTAs, the
     increase would be by less than one megahertz.[^370] Accordingly, we
     conclude that requiring divestiture for spectrum in the 2.5 GHz
     band is not in the public interest.

159. Furthermore, we reject the argument that there will be competitive
     harm from the formation of one provider with a national footprint,
     as opposed to two providers with regional footprints.[^371] Given
     the significant size of Sprint's and Nextel's respective current
     regional footprints in this band pre-merger, the petitioners have
     failed to identify any specific competitive harm that could be
     avoided by rejecting this merger and retaining these two large
     regional providers as separate entities. Further, based on the
     history of spectrum auctions and licensing in the 2.5 GHz band, we
     are not persuaded that rejecting the merger would ultimately result
     in the emergence of two national providers or two large providers
     that would more willingly negotiate with smaller providers than the
     single merged entity.[^372] Even if petitioners had identified a
     competitive harm, it is not clear that not allowing the companies
     to merge would avoid that potential competitive harm.

160. Based on the record before us,[^373] and in light of our conclusion
     that this merger will not result in competitive harm in the 2.5 GHz
     band, we are not persuaded that spectrum divestitures are warranted
     regarding the Applicants' spectrum holdings in the band.
     Furthermore, we emphasize that divesting licensees of 2.5 GHz band
     spectrum would be inconsistent with the Commission's long-standing
     regulatory policies regarding the 2.5 GHz band, including the
     encouragement of consolidation of spectrum in this band, due to its
     historical underutilization. In fact, in establishing the
     procedures for the MDS auction, the Commission placed no
     restriction on the number of BTA service areas for which any entity
     could apply or on the number of BTA authorizations that could be
     awarded to one entity.[^374] To further encourage and facilitate
     the accumulation of a full complement of channels necessary for
     viable systems, the Commission also granted BTA auction winners a
     right of first refusal with regard to the leasing of EBS spectrum
     within their BTA. Specifically, the BTA holder was afforded the
     right to match all final offers of any proposed lessee for EBS
     spectrum in their BTA.[^375]

161. Moreover, any divestiture action here would likewise contradict
     established Commission policy of furthering use of the 2.5 GHz band
     by educational licensees. Specifically, any divestiture of spectrum
     in this band could result in the termination of certain leases that
     Applicants have entered into with EBS licensees. Such termination
     of leases could significantly disrupt EBS operations. This is
     inconsistent with the Commission's long-established practice of
     structuring its rules to provide EBS licensees with flexibility to
     ensure that the very important educational mission it serves is not
     hampered.[^376] The Commission has repeatedly recognized that EBS
     provides critical educational services at a variety of locations
     where such instruction would generally be unavailable.[^377] Any
     disruption of such service could be greatly detrimental to the
     communities served by EBS.

162. Additionally, we believe that conditions proposed by petitioners,
     such as spectrum divestitures, spectrum caps, specific roaming
     requirements, and porting requirements would be premature, given
     the nascency of broadband uses and the on-going transition process
     in the 2.5 GHz band.[^378] Notably, in the BRS/EBS proceeding, the
     Commission specifically raised the issue of whether restrictions
     were necessary for the 2.5 GHz band[^379] and determined, after a
     notice and comment period, that such limits were not in the public
     interest.[^380] Significantly, none of the petitioners who
     recommend conditions in this proceeding submitted such proposals in
     the rulemaking proceeding, which would have been the appropriate
     vehicle to thoroughly consider such requests.[^381] While
     Petitioners counter that they had no notice in the BRS/EBS
     proceeding that one dominant carrier would emerge, both Sprint and
     Nextel held considerable regional footprints prior to the issuance
     of the *BRS/EBS R&O*.[^382] Moreover, we have independently
     analyzed the record and concluded that competitive harm is
     unlikely.

163. Although we decline to impose the conditions recommended by
     petitioners detailed above, we note that as part of the
     Application, the Applicants have made a voluntary commitment to
     observe two service implementation milestones in the 2.5 GHz band,
     unless circumstances beyond their control prevent them from
     achieving these milestones.[^383] Applicants committed themselves
     to this restriction without regard to any finding that the merger
     of Sprint and Nextel would result in competitive harm in the mobile
     data services market or in the fixed broadband services market in
     the 2.5 GHz band. We condition our grant of the Application on
     Sprint Nextel's commitment to meet these milestones, described
     below.

164. First, within four years from the effective date of this Order, the
     merged company will offer service in the 2.5 GHz band to a
     population of no less than 15 million Americans. This deployment
     will include areas within a minimum of nine of the nation's most
     populous 100 BTAs and at least one BTA less populous than the
     nation's 200^th^ most populous BTA. In these ten BTAs, the
     deployment will cover at least one-third of each BTA's population.

165. Second, within six years from the effective date of this Order, the
     merged company will offer service in the 2.5 GHz band to at least
     15 million more Americans in areas within a minimum of nine
     additional BTAs in the 100 most populous BTAs, and at least one
     additional BTA less populous than the nation's 200^th^ most
     populous BTA. In these additional ten BTAs, the deployment will
     cover at least one-third of each BTA's population. Accordingly,
     based on the four and six year commitments, within six years of the
     effective date of this Order applicants will offer service in the
     2.5 GHz band to at least 30 million American in at least 20 BTAs,
     at least two of which are rural communities outside of the nation's
     top 200 most populous BTAs. The deployment in each of the twenty
     BTAs will cover at least one-third of each BTA's population.

166. We note that, while the service implementation milestones set forth
     above apply to the Applicants in the context of this proceeding,
     the issue of what performance requirements should apply to
     licensees generally in the 2.5 GHz band is the subject of a pending
     rulemaking.[^384] Applicants will be subject to any performance
     requirements adopted by the Commission in that rulemaking, in
     addition to those set forth above.

#### Fixed Broadband Services Market

167. We next consider whether the merger will harm competition for
     last-mile, fixed broadband services. We define the fixed broadband
     services market as the market for fixed advanced telecommunications
     capability, *i.e.,* "high-speed, switched, broadband
     telecommunications capability that enables users to originate and
     receive high-quality voice, data, graphics, and video
     telecommunications capability using any technology."[^385] Although
     we are uncertain as to the exact nature of services that will be
     provided in the 2.5 GHz band post-transition, we expect that this
     spectrum may be used to provide fixed or portable wireless
     broadband services (*e.g.*, Wi-Max type services) that will provide
     alternative service platforms for last mile services to residences
     and businesses. Operators providing such services will likely
     compete with digital subscriber line (DSL) and cable modem service
     providers that already hold significant market share.[^386]
     Although, as petitioners argue, broadband services in the 2.5 GHz
     band will likely be different from DSL and cable modems in that it
     will be portable, this moderate differentiation does not undermine
     the substitutability of these products or the definition of a fixed
     broadband wireless market. Whereas operators in the 2.5 GHz band
     may be able to offer more portability than DSL or cable modem
     services, operators offering DSL or cable modem services will have
     "first mover" advantages such as a substantial customer base and
     established brands. We also note that WiFi and other services are,
     and will continue to be, available to DSL and cable modem
     subscribers to provide them with some of the portability
     characteristics that can be expected with the 2.5 GHz band. As a
     result of the entry of another competitor in this market, we expect
     that consumers will benefit from innovative services and lower
     prices. The Commission has noted that in the future, there will be
     a wide variety of technologies that will be available to provide
     broadband services to consumers and businesses, including fiber,
     broadband over power line, unlicensed wireless technologies, and
     satellite.[^387] Accordingly, we conclude that, to the extent that
     uses of the 2.5 GHz band evolve into a fixed broadband service, it
     will be just one of several broadband services and that no
     competitive harm is likely to result from the merger in this
     product market.

### Potential Public Interest Benefits

168. Because we conclude that any public benefits of this merger on the
     commercial development of the 2.5 GHz band are too speculative to
     assess at this time, we do not factor into our analysis any public
     interest benefits with regard to the 2.5 GHz band. We are unable on
     this record to give substantial weight to the Applicants' assertion
     that the merger will produce significant efficiencies in improved
     development of services in the 2.5 GHz band.[^388] Applicants
     contend that the merger will accelerate the deployment of WIMS in
     this band.[^389] Specifically, they indicate that they are
     well-positioned to meet the challenges of developing WIMS because
     of the amount of spectrum they license or lease in the 2.5 GHz
     band, their experience in developing new services, their existing
     portfolio of wireless products, and their financial strength.[^390]
     The Applicants further assert that the merger would provide them a
     national footprint in the 2.5 GHz band, which would justify the
     research, development, and operational costs required to make use
     of the band.[^391] A national footprint would also allow the
     Applicants to develop and deploy a common technology over a portion
     of the 2.5 GHz band that will provide customers with the same
     services in most areas of the country.[^392] Applicants indicate
     that their goal is to provide customers with integrated wireless
     solutions by incorporating devices, applications, and smart network
     technologies into an intuitive, easy-to-use service.[^393] The
     Applicants assert that this new service will generate economic
     growth and jobs in the U.S. by propelling the development of
     innovative applications and services.[^394]

169. Although the Commission has previously noted the consumer benefits
     that flow from expanded footprints for nationwide carriers,
     including the provision of enhanced services and/or lower prices to
     consumers across the country, we decline to attribute specific
     public interest benefits to the merger related to spectrum holdings
     in the 2.5 GHz band. The Applicants describe WIMS as their
     "currently envisioned" plans for the 2.5 GHz band.[^395] They also
     admit that technology is evolving and key standard-setting
     processes are underway.[^396] We agree that if the merger were to
     facilitate the national development of WIMS-type services, the
     ensuing opportunity for consumers to enjoy a new broadband service
     would amount to a significant public interest benefit. In the
     absence of concrete plans for the actual development and deployment
     of WIMS, however, any attribution of public interest benefits from
     this merger as it relates to the 2.5 GHz band would be theoretical
     and speculative. As CTC-Net notes, the parties have not set forth
     any concrete plans to rapidly deploy service in the band.[^397]
     Furthermore, we find it significant that the Applicants have not
     attempted to quantify the benefits of the proposed merger as it
     relates to the 2.5 GHz band. In light of these factors, we conclude
     that any public benefits of this merger on the commercial
     development of the 2.5 GHz band are too speculative to assess at
     this time. Although we are encouraged by Applicants' commitment to
     specific milestones regarding deployment, and make that commitment
     enforceable as part of this order, the caveats on that commitment
     reflect the uncertainties that make the anticipated benefits too
     contingent to receive significant weight in our analysis.
     Therefore, we do not factor into our analysis public interest
     benefits with regard to the 2.5 GHz band.

## Other Issues

### Petitions to Deny Based on the 800 MHz Rebanding Proceeding

170. In this section, we address petitions to deny filed by SMR
     licensees who believe that the proposed merger will exacerbate the
     alleged competitive advantage Nextel gained as a result of the
     Commission's 800 MHz Rebanding Proceeding.[^398] We reject these
     petitions to deny because the proposed merger did not create these
     alleged harms. Nor are we persuaded that the proposed merger would
     exacerbate the alleged harms.

171. In July 2004, the Commission adopted the *800 MHz Report and Order*
     to address the ongoing and growing problem of interference to
     public safety communications in the 800 MHz band.[^399] The
     Commission's plan was comprised of short-term and long-term
     components. The short-term component consisted of technical
     standards that defined unacceptable interference in the 800 MHz
     band and procedures to abate this interference.[^400] The long-term
     component reconfigured the 800 MHz band to separate generally
     incompatible technologies: cellular-architecture multi-cell systems
     used by cellular telephone and Enhanced Specialized Mobile Radio
     (ESMR) licensees and "high site" systems used by public safety,
     private wireless, and non-cellular SMR licensees.[^401] This
     reconfiguration will consolidate ESMR systems into a single
     continuous segment in the upper portion of the 800 MHz band (the
     ESMR Band).[^402]

172. The Commission also required Nextel to return all of its 800 MHz
     spectrum below 817/862 MHz as well as all of its existing
     authorizations in the 700 MHz band. Nextel was also required to pay
     for the cost of retuning all 800 MHz band public safety systems and
     other private wireless 800 MHz band incumbents to their new
     spectrum assignments. In return for accepting these obligations,
     the Commission modified certain Nextel licenses to provide Nextel a
     nationwide authority to operate in ten megahertz of contiguous
     spectrum at 1910-1915/1990-1995 MHz.[^403] In December 2004, the
     Commission issued the *Supplemental Order* that clarified and
     revised the reconfiguration plan.[^404]

173. A number of SMR licensees filed petitions for reconsideration of
     the *800 MHz Order* and the *Supplemental Order*. The SAFE
     Coalition, Coastal SMR, Scott MacIntyre, and Preferred
     Communications claimed that the Commission improperly: (a)
     eliminated the ability of incumbent SMR high-site licensees to
     convert their systems to ESMR architecture; and (b) denied
     licensees the right to relocate site-based licenses to the ESMR
     band.[^405] Coastal SMR Network, Duncan, and Preferred also
     contended that the Commission abused its discretion by authorizing
     Nextel to operate spectrum in the 1.9 GHz band,[^406] arguing that
     under Commission precedent, the Commission could only assign the
     1.9 GHz spectrum outside the auction process if the Commission made
     the spectrum available to all EA licensees.[^407]

174. Some of these same parties have also filed petitions to deny the
     license transfer application in this proceeding, reiterating their
     objections to the *800 MHz Order* and *Supplemental Order*,[^408]
     and further arguing that the proposed merger would increase the
     magnitude of the harm caused by the 800 MHz rebanding process and
     the determination to grant nationwide licenses to Nextel.[^409] For
     example, the SAFE Coalition contends that regional SMR licensees
     that provide unbundled dispatch services to small businesses
     compete with Nextel for these customers[^410] and the Commission
     should consider this market for unbundled dispatch services a
     separate product market.[^411] According to the SAFE Coalition,
     Nextel dominates the spectral resources in the upper portion of the
     800 MHz band, and the *800 MHz Order* and *Supplemental Order*
     unfairly impedes other SMR licensees from migrating their EA and
     site-based licenses to the upper portion of the 800 MHz band. The
     SAFE Coalition, therefore, argues that the merger with Sprint will
     lead to greater competitive imbalance in the market for unbundled
     dispatch services.[^412]

175. Preferred argues that the proposed merger would harm competition
     because it would reduce the number of nationwide mobile telephony
     providers from five to four, and because the merged entity would
     have significant holdings in the 2.5 GHz band as well as the
     competitive advantages that the Commission gave Nextel in the *800
     MHz* and *Supplemental Order*.[^413] According to Preferred, the
     Commission should either deny the license transfer application or
     impose conditions that would require the merged entity to divest
     spectrum in the 800 MHz and 1.9 GHz bands.[^414]

176. Duncan asserts that the Commission decision to award Nextel ten
     megahertz of spectrum in the 1.9 GHz band was
     "\[f\]undamental\[ly\]" premised upon the Commission's
     understanding that this spectrum was needed "to enable Nextel to
     migrate its iDEN technology to a frequency band where it would
     eliminate the interference" Nextel has caused to public safety
     communications.[^415] According to Duncan, the Commission never
     envisioned that Nextel would "flip" this spectrum to an existing
     nationwide PCS licensee before completing any of the proposed
     relocations.[^416] Therefore, Duncan argues that the Commission
     should defer approval of the transfer of control applications until
     it reconsiders the 800 MHz reconfiguration plan in light of the
     spectrum allocation implications of the proposed Sprint Nextel
     merger.[^417]

177. We deny these petitions. The harms SAFE Coalition and Preferred
     Communications allege were caused by the Commission's *800 MHz
     Order* and *Supplemental Order* predate Sprint and Nextel's license
     transfer application. The Commission will address the arguments
     about these alleged harms in an order resolving the petitions for
     reconsideration of the *800 MHz Order* and *Supplemental
     Order*.[^418]

178. We also find no merit to Duncan's contention that the Commission
     needs to reconsider the 800 MHz reconfiguration plan before
     granting consent to the proposed transfer of licenses because the
     Commission's reconfiguration plan was premised on its understanding
     that Nextel needed ten megahertz of spectrum to migrate its iDEN
     network to the 1.9 GHz band.[^419] Nothing in the *800 MHz Order*
     or the *Supplemental Order* supports Duncan's assertion that the
     reconfiguration plan was fundamentally based on Nextel migrating
     its iDEN network to the 1.9 GHz band. In support of this assertion,
     Duncan quotes from a section in the Commission's *800 MHz Order* in
     which the Commission was explaining that it was "redesignating five
     megahertz of spectrum in the 1910-1915 MHz band for licensed Fixed
     and Mobile services" because this redesignation "should promote
     efficient use of the spectrum, \[and\] allow for the rapid
     introduction of high-value services."[^420] The Applicants have
     stated that they intend to deploy advanced wireless services in the
     1.9 GHz band[^421] and we have found this to be one of the
     potential public interest benefits of the merger.[^422]
     Consequently, approving the proposed merger is wholly consistent
     with the Commission's purpose in redesignating the five megahertz
     of spectrum in the 1910-1915 MHz band. We further note that the
     Applicants have stated that, if the merger is approved, they intend
     to move expeditiously to implement the Commission's reconfiguration
     plan.[^423]

179. Nor are we persuaded by the SAFE Coalition's argument that the
     proposed merger between Sprint and Nextel would lead to competitive
     harm in a separate market for unbundled dispatch services. Even if
     we were to accept the SAFE Coalition's view that there is a
     separate unbundled dispatch service market, Sprint is not a
     competitor in the unbundled dispatch services market, as SAFE
     Coalition admits.[^424] Therefore, the proposed merger between
     Sprint and Nextel would not increase the magnitude of that alleged
     harm. For the foregoing reasons, we conclude that the petitions to
     deny of SAFE Coalition, Duncan, and Preferred do not raise
     substantial and material questions of fact.

### Sprint Contractual Dispute With US Unwired

180. Sprint's wireless footprint has been expanded through relationships
     with independent PCS "affiliates," typically in smaller
     markets.[^425] One of these affiliates, US Unwired,[^426] claims
     that in exchange for its agreement (made through subsidiaries) to
     construct, manage, and operate portions of the Sprint PCS wireless
     network, US Unwired was given exclusive rights to operate the
     Sprint PCS wireless network in certain geographic areas. US Unwired
     alleges that approval of the proposed merger would violate its
     exclusive rights and that the public interest would be disserved
     because Sprint would be forced to discontinue service to those
     customers after the merger is completed. In reply, Sprint claims
     that US Unwired's request constitutes a private contractual matter
     and should be denied.[^427]

181. We agree that US Unwired's request is a private contractual dispute
     that is not relevant to our public interest analysis and is best
     resolved by the parties, or in courts of competent
     jurisdiction.[^428] Accordingly, US Unwired's request is denied.

### CWA's Petition to Impose Conditions

182. Commenters suggest that, to the extent that our benefits analysis
     is predicated on the spin-off of Sprint's Local Division, we must
     also consider any potential harms to Sprint's wireline consumers
     that might result from the spin-off,[^429] and that the merger must
     be conditioned upon the approval of the Applicants' commitment to a
     "fair and equitable allocation" of corporate assets and debt at the
     time of the separation of the Sprint's Local Division, which is
     Sprint's local exchange business.[^430]

183. Even though our benefits analysis in this transaction is not
     dependent on the announced future spin-off of Sprint's Local
     Division, we note that Sprint and Nextel have submitted a letter in
     this proceeding specifically addressing CWA's comments.[^431]
     Gary D. Forsee, Sprint's Chairman and CEO, and Timothy M. Donahue,
     Nextel's President and CEO, submitted a letter to the Commission on
     August 2, 2005, stating that the new local company, LTD Holding
     Company, "will receive an equitable debt and asset allocation at
     the time of its proposed spin-off so that the company will be a
     financially secure, Fortune 500 company."[^432] They state that
     "\[i\]ts stock is expected to be traded on the New York Stock
     Exchange; and it anticipates having a level of equity, debt and
     other financial characteristics consistent with those of companies
     that have been rated \`investment grade' by major ratings
     agencies."[^433] Furthermore, Mr. Forsee and Mr. Donahue state
     that, as part of the state commission approval process for this
     spin-off and resulting change of control of its local telephone
     operations, Sprint Nextel "will demonstrate that the New Local
     Company will possess the requisite financial strength, in addition
     to managerial and technical capability, to fully perform its public
     service obligations."[^434] We find that these statements represent
     commitments by Sprint Nextel that the new local wireline company,
     LTD Holding Company, will receive an equitable debt and asset
     allocation at the time of its proposed spin-off so that the company
     will be a financially secure, Fortune 500 company, and that Sprint
     Nextel will demonstrate that the new local company will possess the
     requisite financial strength, in addition to managerial and
     technical capability, to fully perform its public service
     obligations. In addition, these statements are presumably made in
     accordance with the Commission's requirements of candor and
     truthfulness,[^435] and, for this reason, we award them substantial
     weight.

# Conclusion

184. As discussed above, we find that public interest harm is unlikely
     as a result of this transaction, primarily because of the presence
     of multiple other carriers who have the ability to act as effective
     competitive constraints on the behavior of the merged entity.
     Therefore, while the structure of markets will change as a result
     of the transaction, we find that carrier conduct will remain
     sufficiently competitive to ensure that market performance will not
     be impaired, and, given the expected benefits, the public interest
     will be enhanced on balance.

185. We emphasize that our judgment in this matter does not mean that
     our analysis would be the same if additional consolidation in this
     sector were to be proposed in the future. Clearly, there is a point
     beyond which further consolidation would not be in the public
     interest. As we have here, when reviewing any future applications
     of this nature we will look closely at the competitive
     circumstances pertaining at that time in the affected markets and
     will make a considered judgment based on careful weighing of all
     the relevant circumstances.

# ORDERING CLAUSES

186. Accordingly, having reviewed the applications, the petitions, and
     the record in this matter, IT IS ORDERED that, pursuant to sections
     4(i) and (j), 214, 309, 310(d) of the Communications Act of 1934,
     as amended, 47 U.S.C. §§ 154(i), (j), 214, 309, 310(d), the
     applications for the transfer of control of licenses and
     authorizations as discussed herein from Nextel to Sprint ARE
     GRANTED, to the extent specified in this order and subject to the
     condition specified below.

187. IT IS FURTHER ORDERED that, pursuant to section 1.9030 of the
     Commission's rules, 47 C.F.R. § 1.9030, the application for the
     transfer of control of de facto transfer lease authorizations from
     Nextel to S-N Merger Corporation is GRANTED, to the extent
     specified in this order and subject to the conditions specified
     below.

188. IT IS FURTHER ORDERED that the above grant shall include authority
     for Sprint to acquire control of: (a) any license or authorization
     issued to Nextel and its subsidiaries during the Commission's
     consideration of the transfer of control applications or the period
     required for consummation of the transaction following
     approval; (b) construction permits held by such licensees that
     mature into licensees after closing; and (c) applications filed by
     such licensees and that are pending at the time of consummation of
     the proposed transfer of control.

189. IT IS FURTHER ORDERED that, pursuant to section 214 of the
     Communications Act of 1934, as amended, 47 U.S.C. § 214, and
     section 63.24 of the Commission\'s rules, 47, C.F.R. § 63.24, the
     application to transfer control of Nextel's international Section
     214 authorization to Sprint IS GRANTED subject to the conditions
     applicable to international section 214 authorizations.

190. IT IS FURTHER ORDERED that, with respect to roaming, Sprint may not
     prevent its customers from completing calls in the manner
     contemplated in 47 C.F.R. § 20.12(c), unless specifically requested
     to do so by a subscriber.

191. IT IS FURTHER ORDERED that, 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), (j), 309, 310(d), the Petitions to Deny the transfer of
     control of licenses and authorizations from Nextel to Sprint filed
     by New Jersey Division of the Ratepayer Advocate; Richard W. Duncan
     d/b/a Anderson Communications; Consumer Federation of America and
     Consumers Union; Safety and Frequency Equity Competition Coalition;
     Community Technology Centers' Network; Preferred Communications
     Systems Inc.; and NY3G Partnership ARE DENIED for the reasons
     stated herein.

192. IT IS FURTHER ORDERED that the grant of the transfer of control of
     licenses from Nextel to Sprint in the 2150-2162 MHz band and the
     2500-2690 MHz band is conditioned on Sprint Nextel's commitment to
     meet two service milestones contained in the Buildout Commitment
     Letter filed by Sprint and Nextel on August 2, 2005, unless
     circumstances beyond their control prevent them from achieving
     these milestones.

193. IT IS FURTHER ORDERED that, 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), (j), 309, 310(d), the Informal Request for Commission
     Action filed by US Unwired Inc. IS DENIED for the reasons stated
     herein.

194. IT IS FURTHER ORDERED that this Memorandum Opinion and Order SHALL
     BE EFFECTIVE upon release. Petitions for reconsideration under
     section 1.106 of the Commission\'s rules, 47 C.F.R. § 1.106, may be
     filed within thirty days of the date of public notice of this
     Order.

     FEDERAL COMMUNICATIONS COMMISSION

     Marlene H. Dortch

     Secretary

     **APPENDIX A**

     **LIST OF COMMENTERS**

     **Comments Filed by:**

+-----------------------------------------------------------------------+
| 1.  American Council of the Blind (Melanie Brunson)                   |
+-----------------------------------------------------------------------+
| 2.  Clarendon Foundation                                              |
+-----------------------------------------------------------------------+
| 3.  Clearwire Corporation                                             |
+-----------------------------------------------------------------------+
| 4.  Communication Service for the Deaf (CSD)                          |
+-----------------------------------------------------------------------+
| 5.  Communications Workers of America                                 |
+-----------------------------------------------------------------------+
| 6.  Community Technology Centers' Network (CTCNet)                    |
+-----------------------------------------------------------------------+
| 7.  Consumer Federation of America                                    |
+-----------------------------------------------------------------------+
| 8.  Consumers Union                                                   |
+-----------------------------------------------------------------------+
| 9.  Easter Seals                                                      |
+-----------------------------------------------------------------------+
| 10. Fraternal Order of Police                                         |
+-----------------------------------------------------------------------+
| 11. Friends University                                                |
+-----------------------------------------------------------------------+
| 12. Greater Washington Board of Trade                                 |
+-----------------------------------------------------------------------+
| 13. Horizons for the Blind                                            |
+-----------------------------------------------------------------------+
| 14. Intel Corporation                                                 |
+-----------------------------------------------------------------------+
| 15. ITFS/2.5 GHz Mobile Wireless Engineering & Development Alliance,  |
|     Inc.                                                              |
+-----------------------------------------------------------------------+
| 16. KCPT- Public Television                                           |
+-----------------------------------------------------------------------+
| 17. Manatee Community College                                         |
+-----------------------------------------------------------------------+
| 18. National Association of the Deaf                                  |
+-----------------------------------------------------------------------+
| 19. National Black Chamber of Commerce                                |
+-----------------------------------------------------------------------+
| 20. National Emergency Number Association (NENA)                      |
+-----------------------------------------------------------------------+
| 21. National Puerto Rican Coalition, Inc. (NPRC)                      |
+-----------------------------------------------------------------------+
| 22. National Rural Telecommunications Cooperative                     |
+-----------------------------------------------------------------------+
| 23. National Urban League                                             |
+-----------------------------------------------------------------------+
| 24. New Jersey Division of Ratepayer Advocate                         |
+-----------------------------------------------------------------------+
| 25. Nex-Tech Wireless, LLC                                            |
+-----------------------------------------------------------------------+
| 26. Northern California Center on Deafness (NorCal)                   |
+-----------------------------------------------------------------------+
| 27. Northern Virginia Technology Council (NVTC)                       |
+-----------------------------------------------------------------------+
| 28. NY3G Partnership (NY3G)                                           |
+-----------------------------------------------------------------------+
| 29. Pioneer Telephone Cooperative, Inc.                               |
+-----------------------------------------------------------------------+
| 30. Poudre School District (Judy S. MacDonald)                        |
+-----------------------------------------------------------------------+
| 31. Private Networks, Inc.                                            |
+-----------------------------------------------------------------------+
| 32. Rural Cellular Association                                        |
+-----------------------------------------------------------------------+
| 33. Self Help for Hard of Hearing People (SHHH)                       |
+-----------------------------------------------------------------------+
| 34. SouthernLINC Wireless                                             |
+-----------------------------------------------------------------------+
| 35. SpeedNet, L.L.C.                                                  |
+-----------------------------------------------------------------------+
| 36. Sprint Corporation                                                |
+-----------------------------------------------------------------------+
| 37. Ted Roblick                                                       |
+-----------------------------------------------------------------------+
| 38. Telecommunication for the Deaf                                    |
+-----------------------------------------------------------------------+
| 39. United South and Eastern Tribes, Inc. (USET)                      |
+-----------------------------------------------------------------------+
| 40. United States Cellular Corporation                                |
+-----------------------------------------------------------------------+
| 41. United States Hispanic Chamber of Commerce                        |
+-----------------------------------------------------------------------+
| 42. United Wireless Corporation (a unit of United Telephone and       |
|     Communications Associations, Inc.)                                |
+-----------------------------------------------------------------------+
| 43. University of Arizona KUAT Communications Group                   |
+-----------------------------------------------------------------------+
| 44. University of South Florida                                       |
+-----------------------------------------------------------------------+
| 45. U.S. Senator Mike Dewine                                          |
+-----------------------------------------------------------------------+
| 46. U.S. Senator Herbert Kohl                                         |
+-----------------------------------------------------------------------+
| 47. US Unwired Inc.                                                   |
+-----------------------------------------------------------------------+
| 48. Via/Net Companies, Inc.                                           |
+-----------------------------------------------------------------------+

**Reply Comments Filed by:**

+-----------------------------------------------------------------------+
| 1.  Communications Workers of American (CWA) and International        |
|     Brotherhood of Electrical Workers (IBEW)                          |
+-----------------------------------------------------------------------+
| 2.  Via/Net Companies, Inc.                                           |
+-----------------------------------------------------------------------+

**Petitions to Deny Filed by:**

+-----------------------------------------------------------------------+
| 1.  Community Technology Centers' Network (CTCNet)                    |
+-----------------------------------------------------------------------+
| 2.  Consumer Federation of America and Consumers Union                |
+-----------------------------------------------------------------------+
| 3.  New Jersey Division of Ratepayer Advocate                         |
+-----------------------------------------------------------------------+
| 4.  NY3G Partnership                                                  |
+-----------------------------------------------------------------------+
| 5.  Preferred Communications Systems, Inc.                            |
+-----------------------------------------------------------------------+
| 6.  Richard W. Duncan d/b/a Anderson Communications                   |
+-----------------------------------------------------------------------+
| 7.  Safety and Frequency Equity (SAFE) Competition Coalition          |
+-----------------------------------------------------------------------+

**Joint Opposition to Petitions to Deny Filed by:**

+-----------------------------------------------------------------------+
| > Sprint Corporation and Nextel Communications, Inc.                  |
+-----------------------------------------------------------------------+

**Reply to Joint Opposition to Petitions to Deny Filed by:**

+-----------------------------------------------------------------------+
| 1.  Community Technology Centers' Network (CTCNet)                    |
+-----------------------------------------------------------------------+
| 2.  Consumer Federation of America and Consumers Union                |
+-----------------------------------------------------------------------+
| 3.  NY3G Partnership                                                  |
+-----------------------------------------------------------------------+
| 4.  Preferred Communications Systems, Inc.                            |
+-----------------------------------------------------------------------+
| 5.  Richard W. Duncan d/b/a Anderson Communications                   |
+-----------------------------------------------------------------------+
| 6.  Safety and Frequency Equity (SAFE) Competition Coalition          |
+-----------------------------------------------------------------------+
| 7.  SouthernLINC Wireless                                             |
+-----------------------------------------------------------------------+
| 8.  United States Cellular Corporation                                |
+-----------------------------------------------------------------------+

**APPENDIX B**

**LIST OF MARKETS IDENTIFIED FOR FURTHER ANALYSIS BY INITIAL SCREEN**

**CEAs:**

  -------------- --------------------------------------------------------
  **CEA**        **Name**

  CEA0160        Albany-Schenectady-Troy, NY

  CEA0240        Allentown-Bethlehem-Easton, PA

  CEA0440        Ann Arbor, MI

  CEA0560        Atlantic-Cape May, NJ

  CEA0640        Austin-San Marcos, TX

  CEA0680        Bakersfield, CA

  CEA0720        Baltimore, MD

  CEA0743        Barnstable-Yarmouth, MA

  CEA0760        Baton Rouge, LA-MS

  CEA0840        Beaumont-Port Arthur, TX

  CEA0860        Bellingham, WA

  CEA0870        Benton Harbor, MI

  CEA0875        Bergen-Passaic, NJ

  CEA0960        Binghamton, NY-PA

  CEA1040        Bloomington-Normal, IL

  CEA1123        Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH-R

  CEA1145        Brazoria, TX

  CEA1240        Brownsville-Harlingen-San Benito, TX

  CEA1400        Champaign-Urbana, IL

  CEA1520        Charlotte-Gastonia-Rock Hill, NC-SC

  CEA1540        Charlottesville, VA

  CEA1600        Chicago, IL

  CEA1620        Chico-Paradise, CA

  CEA1640        Cincinnati, OH-KY-IN

  CEA1840        Columbus, OH

  CEA1880        Corpus Christi, TX

  CEA1920        Dallas, TX-OK

  CEA2000        Dayton-Springfield, OH

  CEA2020        Daytona Beach, FL

  CEA2160        Detroit, MI

  CEA2190        Dover, DE

  CEA2281        Dutchess County, NY

  CEA2320        El Paso, TX

  CEA2330        Elkhart-Goshen, IN-MI

  CEA2640        Flint, MI

  CEA2680        Fort Lauderdale, FL

  CEA2700        Fort Myers-Cape Coral, FL

  CEA2710        Fort Pierce-Port St. Lucie, FL

  CEA2760        Fort Wayne, IN

  CEA2800        Fort Worth-Arlington, TX

  CEA2840        Fresno, CA

  CEA2900        Gainesville, FL

  CEA2960        Gary, IN

  CEA3000        Grand Rapids-Muskegon-Holland, MI

  CEA3180        Hagerstown, MD-PA

  CEA3200        Hamilton-Middletown, OH

  CEA3283        Hartford-New Britain-Middletown-Bristol, CT

  CEA3320        Honolulu, HI

  CEA3350        Houma, LA

  CEA3360        Houston, TX

  CEA3400        Huntington-Ashland, WV-KY-OH

  CEA3480        Indianapolis, IN

  CEA3500        Iowa City, IA

  CEA3520        Jackson, MI

  CEA3600        Jacksonville, FL-GA

  CEA3720        Kalamazoo-Battle Creek, MI

  CEA3760        Kansas City, MO-KS

  CEA3800        Kenosha, WI

  CEA3810        Killeen-Temple, TX

  CEA3880        Lafayette, LA

  CEA3920        Lafayette, IN

  CEA3960        Lake Charles, LA

  CEA3980        Lakeland-Winter Haven, FL

  CEA4040        Lansing-East Lansing, MI

  CEA4080        Laredo, TX

  CEA4120        Las Vegas, NV-AZ-UT

  CEA4480        Los Angeles-Long Beach, CA

  CEA4520        Louisville, KY-IN

  CEA4600        Lubbock, TX

  CEA4800        Mansfield, OH

  CEA4880        McAllen-Edinburg-Mission, TX

  CEA4900        Melbourne-Titusville-Palm Bay, FL

  CEA5000        Miami, FL

  CEA5190        Monmouth-Ocean, NJ

  CEA5330        Myrtle Beach, SC

  CEA5345        Naples, FL

  CEA5380        Nassau-Suffolk, NY

  CEA5483        New Haven-Bridgeport-Stamford-Danbury-Waterbury, C

  CEA5523        New London-Norwich, CT

  CEA5560        New Orleans, LA-MS

  CEA5600        New York, NY

  CEA5640        Newark, NJ-PA

  CEA5660        Newburgh, NY-PA

  CEA5775        Oakland, CA

  CEA5790        Ocala, FL

  CEA5945        Orange County, CA

  CEA5960        Orlando, FL

  CEA6015        Panama City, FL

  CEA6080        Pensacola, FL

  CEA6120        Peoria-Pekin, IL

  CEA6160        Philadelphia, PA-NJ

  CEA6483        Providence-Warwick-Pawtucket, RI

  CEA6580        Punta Gorda, FL

  CEA6640        Raleigh-Durham-Chapel Hill, NC

  CEA6680        Reading, PA

  CEA6780        Riverside-San Bernardino, CA-AZ

  CEA6840        Rochester, NY

  CEA6880        Rockford, IL

  CEA6895        Rocky Mount, NC

  CEA6960        Saginaw-Bay City-Midland, MI

  CEA7040        St. Louis, MO-IL

  CEA7240        San Antonio, TX

  CEA7320        San Diego, CA

  CEA7360        San Francisco, CA

  CEA7400        San Jose, CA

  CEA7500        Santa Rosa, CA

  CEA7510        Sarasota-Bradenton, FL

  CEA7560        Scranton-Wilkes-Barre-Hazleton, PA

  CEA8200        Tacoma, WA

  CEA8240        Tallahassee, FL-GA

  CEA8280        Tampa-St. Petersburg-Clearwater, FL

  CEA8320        Terre Haute, IN-IL

  CEA8480        Trenton, NJ

  CEA8720        Vallejo-Fairfield-Napa, CA

  CEA8735        Ventura, CA

  CEA8760        Vineland-Millville-Bridgeton, NJ

  CEA8800        Waco, TX

  CEA8840        Washington, DC-MD-VA-WV

  CEA8960        West Palm Beach-Boca Raton, FL

  CEA9160        Wilmington-Newark, DE-MD

  CEA9270        Yolo, CA

  CEA9280        York, PA

  CEA9340        Yuba City, CA

  CEA9360        Yuma, AZ
  -------------- --------------------------------------------------------

**CMAs:**

  -------------- --------------------------------------------------------
  **CMA**        **Name**

  CMA001         New York, NY-NJ/Nassau-Suffolk

  CMA002         Los Angeles-Long Beach/Anaheim

  CMA003         Chicago, IL

  CMA004         Philadelphia, PA

  CMA005         Detroit/Ann Arbor, MI

  CMA006         Boston-Lowell-Brockton-Lawrence-Haverhill, MA-NH

  CMA007         San Francisco-Oakland, CA

  CMA008         Washington, DC-MD-VA

  CMA009         Dallas-Fort Worth, TX

  CMA010         Houston, TX

  CMA011         St. Louis, MO-IL

  CMA012         Miami-Fort Lauderdale-Hollywood, FL

  CMA013         Pittsburgh, PA

  CMA014         Baltimore, MD

  CMA015         Minneapolis-St. Paul, MN-WI

  CMA017         Atlanta, GA

  CMA018         San Diego, CA

  CMA022         Tampa-St. Petersburg, FL

  CMA023         Cincinnati, OH-KY-IN

  CMA024         Kansas City, MO-KS

  CMA027         San Jose, CA

  CMA028         Indianapolis, IN

  CMA029         New Orleans, LA

  CMA031         Columbus, OH

  CMA032         Hartford-New Britain-Bristol, CT

  CMA033         San Antonio, TX

  CMA034         Rochester, NY

  CMA037         Louisville, KY-IN

  CMA038         Providence-Warwick-Pawtucket, RI

  CMA042         Bridgeport-Stamford-Norwalk-Danbury, CT

  CMA044         Albany-Schenectady-Troy, NY

  CMA046         Nashville-Davidson, TN

  CMA047         Greensboro-Winston-Salem-High Point, NC

  CMA048         Toledo, OH-MI

  CMA049         New Haven-West Haven-Waterbury-Meriden, CT

  CMA050         Honolulu, HI

  CMA051         Jacksonville, FL

  CMA053         Syracuse, NY

  CMA054         Gary-Hammond-East Chicago, IN

  CMA056         Northeast Pennsylvania, PA

  CMA058         Allentown-Bethlehem-Easton, PA

  CMA060         Orlando, FL

  CMA061         Charlotte-Gastonia, NC

  CMA064         Grand Rapids, MI

  CMA068         Flint, MI

  CMA069         Wilmington, DE-NJ-MD

  CMA070         Long Branch-Asbury Park, NJ

  CMA071         Raleigh-Durham, NC

  CMA072         West Palm Beach-Boca Raton, FL

  CMA073         Oxnard-Simi Valley-Ventura, CA

  CMA074         Fresno, CA

  CMA075         Austin, TX

  CMA076         New Bedford-Fall River, MA

  CMA078         Lansing-East Lansing, MI

  CMA080         Baton Rouge, LA

  CMA081         El Paso, TX

  CMA082         Tacoma, WA

  CMA084         Harrisburg, PA

  CMA088         Chattanooga, TN-GA

  CMA093         Las Vegas, NV

  CMA094         Saginaw-Bay City-Midland, MI

  CMA096         Fort Wayne, IN

  CMA097         Bakersfield, CA

  CMA099         York, PA

  CMA101         Beaumont-Port Arthur, TX

  CMA103         Peoria, IL

  CMA104         Newport News-Hampton, VA

  CMA107         Stockton, CA

  CMA110         Huntington-Ashland, WV/KY/OH

  CMA111         Vallejo-Fairfield-Napa, CA

  CMA112         Corpus Christi, TX

  CMA114         Lakeland-Winter Haven, FL

  CMA116         Lexington-Fayette, KY

  CMA117         Colorado Springs, CO

  CMA118         Reading, PA

  CMA121         Trenton, NJ

  CMA122         Binghamton, NY

  CMA123         Santa Rosa-Petaluma, CA

  CMA127         Pensacola, FL

  CMA128         McAllen-Edinburg-Mission, TX

  CMA129         South Bend-Mishawaka, IN

  CMA131         Rockford, IL

  CMA132         Kalamazoo, MI

  CMA133         Manchester-Nashua, NH

  CMA134         Atlantic City, NJ

  CMA137         Melbourne-Titusville-Palm Bay, FL

  CMA138         Macon-Warner Robins, GA

  CMA142         Modesto, CA

  CMA144         Orange County, NY

  CMA145         Hamilton-Middletown, OH

  CMA146         Daytona Beach, FL

  CMA149         Fayetteville, NC

  CMA151         Poughkeepsie, NY

  CMA154         New London-Norwich, CT

  CMA160         Killeen-Temple, TX

  CMA161         Lubbock, TX Counties - Lubbock

  CMA162         Brownsville-Harlingen, TX

  CMA164         Fort Myers, FL Counties - Lee

  CMA167         Sarasota, FL

  CMA168         Tallahassee, FL

  CMA171         Reno, NV

  CMA174         Lafayette, LA

  CMA177         Battle Creek, MI

  CMA180         Springfield, OH

  CMA181         Muskegon, MI

  CMA184         Houma-Thibodaux, LA

  CMA185         Terre Haute, IN

  CMA188         Amarillo, TX

  CMA191         Yakima, WA

  CMA192         Gainesville, FL

  CMA193         Benton Harbor, MI

  CMA196         Champaign-Urbana-Rantoul, IL

  CMA197         Lake Charles, LA

  CMA207         Jackson, MI

  CMA208         Fort Pierce, FL

  CMA209         Clarksville-Hopkinsville, TN/KY

  CMA211         Bradenton, FL

  CMA212         Bremerton, WA

  CMA214         Richland-Kennewick-Pasco, WA

  CMA215         Chico, CA

  CMA223         Elkhart-Goshen, IN

  CMA228         Vineland-Millville-Bridgeton, NJ

  CMA231         Mansfield, OH

  CMA241         Pueblo, CO

  CMA242         Olympia, WA

  CMA244         Kenosha, WI

  CMA245         Ocala, FL

  CMA247         Lafayette, IN

  CMA249         Anniston, AL

  CMA250         Bloomington-Normal, IL

  CMA256         Charlottesville, VA

  CMA257         Hagerstown, MD

  CMA270         Bellingham, WA

  CMA274         Yuba City, CA

  CMA278         Columbia, MO

  CMA281         Laredo, TX

  CMA283         Panama City, FL

  CMA287         Bryan-College Station, TX

  CMA294         San Angelo, TX

  CMA295         Midland, TX

  CMA296         Iowa City, IA

  CMA300         Victoria, TX

  CMA318         Arizona 1 - Mohave

  CMA321         Arizona 4 - Yuma

  CMA322         Arizona 5 - Gila

  CMA323         Arizona 6 - Graham

  CMA342         California 7 - Imperial

  CMA357         Connecticut 1 - Litchfield

  CMA359         Delaware 1 - Kent

  CMA360         Florida 1 - Collier

  CMA361         Florida 2 - Glades

  CMA362         Florida 3 - Hardee

  CMA363         Florida 4 - Citrus

  CMA364         Florida 5 - Putnam

  CMA366         Florida 7 - Hamilton

  CMA370         Florida 11 - Monroe

  CMA386         Hawai 2 - Maui

  CMA394         Illinois 1 - Jo Davie

  CMA449         Kentucky 7 - Trimble

  CMA459         Louisiana 6 - Iberville

  CMA460         Louisiana 7 - West Feliciana

  CMA468         Maryland 2 - Kent

  CMA469         Maryland 3 - Frederick

  CMA478         Michigan 7 - Newaygo

  CMA480         Michigan 9 - Cass

  CMA514         Missouri 11 - Moniteau

  CMA545         Nevada 3 - Storey

  CMA546         Nevada 4 - Mineral

  CMA572         North Carolina 8 - Northampton

  CMA579         North Carolina 15 - Cabarrus

  CMA585         Ohio 1 - Williams

  CMA586         Ohio 2 - Sandusky

  CMA588         Ohio 4 - Mercer

  CMA589         Ohio 5 - Hancock

  CMA590         Ohio 6 - Morrow

  CMA591         Ohio 7 - Tuscarawas

  CMA592         Ohio 8 - Clinton

  CMA593         Ohio 9 - Ross

  CMA621         Pennsylvania 10 - Bedford

  CMA629         South Carolina 5 - Georgetown

  CMA633         South Carolina 9 - Lancaster

  CMA651         Tennessee 9 - Maury

  CMA659         Texas 8 - Gaines

  CMA670         Texas 19 - Atascosa

  CMA671         Texas 20 - Wilson

  CMA676         Utah 4 - Beaver

  CMA690         Virginia 10 - Frederick

  CMA691         Virginia 11 - Madison

  CMA693         Washington 1 - Clallam

  CMA698         Washington 6 - Pacific
  -------------- --------------------------------------------------------

**APPENDIX C**

**MARKET-SPECIFIC ANALYSIS**

**EXAmination of Markets Identified by**

**Subscriber Absorption Capacity (SAC) Analysis**

As set forth in the Memorandum Opinion and Order,[^436] our in-depth
analysis of all mobile telephony markets flagged by our initial screen
for further review has three parts: a general examination of the
possibility of coordinated interaction; a general examination of the
possibility of unilateral effects; and, finally, a more granular
examination of individual local markets. In undertaking the in-depth
analysis, we have looked at data presented by CEA and by the smaller CMA
regions, and we have also considered how circumstances vary within these
regions.[^437] In our analysis of each of these markets, we have found
that competitive harm is unlikely, primarily because post-merger there
will be a continuing presence of multiple other carriers with the
capacity to add subscribers. In addition, we have found no local markets
that are exceptions to this general conclusion, and thus none for which
a localized divestiture condition would be appropriate. This is largely
a result of the fact that neither Sprint nor Nextel were among the early
A and B block cellular providers when mobile telephony was licensed on a
duopoly basis. Rather, in markets where Sprint and Nextel both are
substantially built-out, there are at least two other providers with a
significant presence (the original A and B block cellular providers or
their successors-in-interest), and often more than two other providers.

In this Appendix, we take the additional step of examining, in detail,
the seven specific markets of potential concern identified in the
Subscriber Absorption Capacity (SAC) analysis submitted by
Applicants.[^438] The SAC test examined BTA markets and identified seven
in which there might be the potential that competing firms might not be
able to absorb ten percent or more of the subscribers of the proposed
merged entity. We analyze these markets by BTAs because the SAC analysis
uses these markets; we also note that our conclusions would not be
altered if we instead had focused primarily on the CEA or CMA areas that
overlap these BTAs.[^439] Based on consideration of the same set of
variables we applied in examining CEAs and CMAs, plus discussion of the
SAC analysis, we determine that competitive harm is unlikely in any of
these BTAs.

The market share and HHI data are computed using two data sources: (1)
data compiled in our Numbering Resource Utilization / Forecast (NRUF)
database, which tracks phone number usage by all telecommunications
carriers, including wireless carriers, in the United States; and (2)
data submitted by certain carriers in response to our information
request in this proceeding. These sources yield two sets of market share
and HHI figures. We used the June 2004 NRUF data to compute "NRUF HHIs."
In addition, we computed "Blended HHIs" using December 2004 data
received in response to our request in this proceeding.[^440] Although
the figures derived from these sources give different results in some
cases (expressed in the ranges given below), our analysis does not rely
solely on market shares to determine which markets are likely to
experience competitive harm as a result of this transaction. We also
analyze carrier launch and coverage information available from a variety
of public sources which provide geographic service provision data, and
spectrum holdings, which we obtained from our licensing databases and
from the Applications. Our multi-factor, market-specific analysis
employs a combination of the information derived from all of the data
sources described above, and it provides a reliable basis for making our
determinations herein.

**Big Spring, TX (BTA 40)**

In the Big Spring, Texas BTA (which has a population of 40,000 and a
population density of about 13 POPs/sq. mile[^441]), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers while Nextel has between **\[REDACTED\]** and
**\[REDACTED\]** percent; combined, these two entities would have a
post-merger share of between **\[REDACTED\]** and **REDACTED\]**
percent. Even after the transaction, ALLTEL would continue to hold the
largest market share with between **\[REDACTED\]**and **\[REDACTED\]**
percent of the BTA's wireless subscribers. Also, Wes-Tex Telephone will
hold between **\[REDACTED\]** and **\[REDACTED\]** percent of the
wireless subscribers in this BTA.[^442]

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 58 MHz of spectrum throughout the BTA.
ALLTEL holds 30 MHz in two counties and 25 MHz in the third. Wes-Tex
holds 25 MHz where it offers service in the BTA. In addition, Cingular,
Poka Lambro, T-Mobile, Verizon Wireless, and West Central Wireless hold
spectrum in this BTA, although T-Mobile only has 5 MHz of spectrum in
two of the three counties.

Nextel has network coverage in most of Howard and Glasscock counties,
while Sprint has coverage in most of Howard County. Nextel's and
Sprint's network coverage overlap would be approximately 94 percent of
the BTA population; if combined, the merged entity would cover 97
percent of the population. ALLTEL covers 100 percent of the BTA
population, T-Mobile covers 94 percent, and Wes-Tex Cellular covers 98
percent.

*Conclusion.* Overall, it appears that the transaction is not likely to
result in competitive harm in the Big Spring, TX BTA. Although the
merged entity would have a **\[REDACTED\]** post-transaction market
share in this BTA, it would not **\[REDACTED\]**. ALLTEL would continue
to have the **\[REDACTED\]** market share, and West-Tex's market share
would be **\[REDACTED\]** with the merged entity's share. The reduction
from **\[REDACTED\]** to **\[REDACTED\]** carriers with market share
greater than **\[REDACTED\]** percent overstates the likely harm to
competition in this BTA. The network coverage overlap of Sprint and
Nextel is limited to one out of three counties, and the reduction in the
number of competitors with significant network coverage in this county
is from **\[REDACTED\]** to **\[REDACTED\]** . Further, it appears that
the merged entity's network coverage in BTA 40 would be just a small
part of a larger service area -- CEA 5800, Odessa-Midland, TX. If this
larger geographic market is used for the competitive analysis, the
potential harms are diminished. For example, the change in the HHI for
CEA 5800 is **\[REDACTED\]**. Therefore this CEA is not identified for
further review by the initial screen.

In addition, Cingular appears to be well positioned to expand service
into this BTA if the merged entity were to increase price or reduce
service. Cingular's **\[REDACTED\]** percent market share indicates that
it is a robust competitor in CEA 5800. In addition, Cingular has network
coverage in an adjacent BTA, and it holds sufficient spectrum in BTA 40
to provide mobile telephony service. Further, the ability of carriers
other than the merged entity to add customers in this BTA is likely to
be higher than indicated by the Applicants. Although the Applicants' SAC
test indicated that rivals may not be able to absorb **\[REDACTED\]**
percent of the merged entity's customers, it did not include T-Mobile in
the analysis of this BTA. Although the data does not indicate that
T-Mobile has subscribers in this BTA, T-Mobile's network covers over
**\[REDACTED\]** percent of the BTA population, and T-Mobile holds 10
MHz of spectrum in the one county for which Sprint and Nextel have
overlapping coverage (Howard County).

**Midland, TX (BTA 296)**

In the Midland, Texas, BTA (which has a population of 120,000 and a
population density of about 66 POPs/sq. mile), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers, while Nextel has between **\[REDACTED\]** and
**\[REDACTED\]** percent; if combined, these two entities would have a
post-merger share of between **\[REDACTED\]** and **\[REDACTED\]**
percent. There are two other carriers in this BTA with market share
greater than **\[REDACTED\]** percent. Post-transaction, ALLTEL would
continue to hold the largest market share with between **\[REDACTED\]**
and **\[REDACTED\]** percent of the BTA's subscribers. In addition,
Cingular will hold between **\[REDACTED\]** and **\[REDACTED\]** percent
of the wireless subscribers in this BTA.

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]** , with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 58 MHz throughout the two counties that
comprise this BTA. ALLTEL has 25 MHz of spectrum in Martin County and 35
in Midland County. Cingular has 25 MHz of spectrum in Martin County and
50 in Midland County. T-Mobile has 20 MHz of spectrum throughout the
BTA. In addition, Verizon Wireless holds spectrum throughout the BTA and
Poka Lambo and Wes-Tex hold spectrum in one county.

Sprint and Nextel each cover more than 98 percent of the population,
while ALLTEL covers 100 percent, Cingular covers 96 percent, and
T-Mobile covers 99 percent.

*Conclusion.* Overall, it appears that the transaction is not likely to
result in competitive harm in the Midland, TX BTA. Although the merged
entity would have a **\[REDACTED\]** post-transaction market share in
this BTA, it would not become the market leader. ALLTEL would continue
to have the highest market share and Cingular's market share would also
be greater than the merged entity's share. The reduction from
**\[REDACTED\]** to **\[REDACTED\]** carriers with market share greater
than **\[REDACTED\]** percent overstates the likely harm to competition
in this BTA. The number of competitors with significant network coverage
in this BTA will be reduced from **\[REDACTED\]** to **\[REDACTED\]**.
Further, it appears that the merged entity's network coverage in BTA 296
would be just a small part of a larger service area -- CEA 5800,
Odessa-Midland, TX. If this larger geographic market is used for the
competitive analysis, the potential harms are diminished. For example,
the change in the HHI for CEA 5800 is **\[REDACTED\]**. Therefore this
CEA is not identified for further review by the initial screen.

In addition, the ability of carriers other than the merged entity to add
customers in this BTA is likely to be higher than indicated by the
Applicants. Although the Applicants' SAC test indicated that rivals may
not be able to absorb **\[REDACTED\]** percent of the merged entity's
customers, it did not include T-Mobile in the analysis of this BTA.
Although the data does not indicate that T-Mobile has subscribers in
this BTA, T-Mobile's network covers over **\[REDACTED\]** percent of the
BTA population, and T-Mobile holds 20 MHz of spectrum throughout the
BTA.

**Charlottesville, VA (BTA 75)**

In the Charlottesville, VA BTA (which has a population of 230,000 and a
population density of about 79 POPs/sq. mile), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers, while Nextel has between **\[REDACTED\]** and
**\[REDACTED\]** percent; combined, these two entities would have a
post-merger share of **\[REDACTED\]** and **\[REDACTED\]** percent. The
other carriers with market share in this BTA are ALLTEL, with between
**\[REDACTED\]** and **\[REDACTED\]** percent of the subscribers, Triton
PCS[^443] with between **\[REDACTED\]** and **\[REDACTED\]** percent,
NTelos with between **\[REDACTED\]** and **\[REDACTED\]** percent, US
Cellular with between **\[REDACTED\]**and **\[REDACTED\]** percent,
Verizon Wireless with between **\[REDACTED\]** and **\[REDACTED\]**
percent, and T-Mobile with between **\[REDACTED\]** and **\[REDACTED\]**
percent.

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 60 MHz throughout the BTA. ALLTEL has 25
MHz of spectrum throughout the BTA. NTelos has 20 MHz of spectrum
throughout the BTA. US Cellular has 25 MHz of spectrum in Albemarle,
Buckingham, Fluvanna, and Greene counties, and the city of
Charlottesville. In addition, Cingular, T-Mobile, Triton PCS, Urban
Comm, Verizon Wireless, and Virginia Cellular hold spectrum in this BTA.

Sprint has network coverage in five out of seven counties and in
Charlottesville City, and Nextel has network coverage in five counties
and Charlottesville City. Nextel and Sprint have overlapping network
coverage in most of Albermarle and Greene and parts of Madison, Nelson,
and Fluvanna counties. The network coverage overlap is approximately 61
percent of the BTA population, and if combined, the merged entity would
cover 71 percent of the population. ALLTEL covers 100 percent, NTelos
covers 52 percent, and US Cellular covers 77 percent.

*Conclusion.* Overall, it appears that the transaction is not likely to
result in competitive harm in the Charlottesville, VA BTA. Although the
merged entity would have a **\[REDACTED\]** post-transaction market
share in this BTA, it would **\[REDACTED\]**. ALLTEL would
**\[REDACTED\]** market share. Also, the proposed transaction, which
would combine the **\[REDACTED\]** and **\[REDACTED\]** largest carriers
in terms of market share, would only decrease the number of carriers
with a greater than **\[REDACTED\]** percent share from **\[REDACTED\]**
to **\[REDACTED\]**. Further, three of these carriers, **\[REDACTED\]**,
either appear to cover more of the population than Sprint and Nextel
combined, or have coverage somewhat similar to Sprint and Nextel. These
carriers do appear to have sufficient capacity to absorb customers if
the merged entity were to raise price or reduce service following the
transaction.

**Detroit, MI (BTA 112)**

In the Detroit, Michigan BTA (which has a population of 4,970,000 and a
population density of about 793 POPs/sq. mile), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers and Nextel has between **\[REDACTED\]** and **\[REDACTED\]**
percent; combined, these two entities would have a post-merger share of
between **\[REDACTED\]** and **\[REDACTED\]** percent. There are three
other carriers in this BTA with market share greater than
**\[REDACTED\]** percent. The other carriers with market share are
Verizon Wireless, with between **\[REDACTED\]** and **\[REDACTED\]**
percent of the wireless subscribers, Cingular with between
**\[REDACTED\]** and **\[REDACTED\]** percent, T-Mobile with between
**\[REDACTED\]** and **\[REDACTED\]** percent, and ALLTEL, Dobson, and
Thumb Cellular with **\[REDACTED\]**.

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 56 MHz throughout the BTA. Cingular holds
65 MHz in Lapeer, Livingston, Macomb, Oakland, St Clair Washtenaw, and
Wayne counties, and 40 MHz in Monroe, and Sanilac counties. T-Mobile
holds 30 MHz throughout the BTA. Verizon Wireless holds 35 MHz in all
counties except Sanilac where it holds 10 MHz. In addition, Metro PCS
holds spectrum throughout the BTA, and ALLTEL, Dobson, and Thumb
Cellular hold spectrum in one county each in this BTA.

Sprint and Nextel have significant overlapping coverage in eight out of
nine counties in this BTA, all counties except Sanilac. The network
coverage overlap is approximately 98 percent of the BTA population, and
if combined the merged entity would cover 99 percent of the population.
Cingular covers 99 percent, T-Mobile covers 97 percent, and Verizon
Wireless covers 99 percent.

*Conclusion.* Overall, it appears that the transaction is unlikely to
result in competitive harm in the Detroit, MI BTA. Although the merged
entity would have a **\[REDACTED\]** post-transaction market share in
this BTA, there will be three other national carriers with significant
market share post-transaction. Also, the proposed transaction, which
would combine the **\[REDACTED\]** and **\[REDACTED\]** largest carriers
in terms of market share, would decrease the number of carriers with a
greater than **\[REDACTED\]** percent share from **\[REDACTED\]** to
**\[REDACTED\]** . Further, the other three national carriers cover more
than **\[REDACTED\]** percent of the BTA population. Therefore, these
carriers have sufficient network coverage to attract customers if the
merged entity were to raise price or reduce service following the
transaction.

In addition, as the Applicants acknowledge, their SAC test did not take
into account the 10 MHz of spectrum that Verizon Wireless acquired
earlier this year from NextWave. This additional spectrum will
substantially enhance the ability of Verizon Wireless to absorb
additional customers in this BTA.

**Mount Pleasant, MI (BTA 307)**

In the Mount Pleasant, Michigan, BTA (which has a population of 140,000
and a population density of only about 80 POPs/sq. mile), Sprint has
between **\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers while Nextel has between **\[REDACTED\]** and
**\[REDACTED\]** percent; combined, these two entities would have a
post-merger share of between **\[REDACTED\]** and **\[REDACTED\]**
percent. There are four other carriers in this BTA with market share
greater than **\[REDACTED\]** percent: ALLTEL with between
**\[REDACTED\]** and **\[REDACTED\]** percent of the subscribers,
Centennial Cellular with between **\[REDACTED\]** and **\[REDACTED\]**
percent, and Dobson with between **\[REDACTED\]** and **\[REDACTED\]**
percent.[^444]

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 58.5 MHz throughout the BTA. ALLTEL has 25
MHz of spectrum throughout the BTA, and Centennial Cellular has 25 MHz
of spectrum throughout the BTA. In addition, Cingular, Dobson,[^445]
Lite-Wave Communications, Salmon PCS, and Verizon Wireless[^446] hold
spectrum in this BTA.

Nextel has **\[REDACTED\]** network coverage throughout the BTA, while
Sprint has **\[REDACTED\]** coverage throughout the BTA. The coverage
overlap covers 65.9 percent of the BTA population, and if combined the
merged entity would cover 80 percent. ALLTEL covers 99.5 percent of the
population and Centennial Cellular covers 85.5 percent. Dobson and
Verizon Wireless cover small portions of the population.

*Conclusion.* Overall, it appears that the transaction is not likely to
result in competitive harm in the Mount Pleasant, MI BTA. Although the
merged entity would have a **\[REDACTED\]** post-transaction market
share in this BTA, it is unlikely that the merged firm would become the
market leader.[^447] ALLTEL likely would continue to have the highest
market share. Also, the proposed transaction would decrease the number
of carriers with a greater than **\[REDACTED\]** percent share from
**\[REDACTED\]** to **\[REDACTED\]**. Further, two of these carriers,
ALLTEL and Centennial Cellular, cover more than **\[REDACTED\]** percent
of the BTA population, and they appear to have sufficient capacity to
absorb customers if the merged entity were to raise price or reduce
service following the transaction.

**Washington DC (BTA 461)**

In the Washington DC BTA (which has a population of 4,770,000 and a
population density of about 795 POPs/sq mile), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers and Nextel has between **\[REDACTED\]** and **\[REDACTED\]**
percent; combined these two entities would have a post-merger share of
between **\[REDACTED\]** and **\[REDACTED\]** percent. There are three
other carriers in this BTA with market share greater than
**\[REDACTED\]** percent: Verizon Wireless, with between
**\[REDACTED\]** and **\[REDACTED\]** percent of the subscribers,
Cingular with between **\[REDACTED\]** and **\[REDACTED\]** percent, and
T-Mobile with between **\[REDACTED\]** and **\[REDACTED\]** percent.

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure. Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold 59 MHz throughout the BTA. Cingular holds
65 MHz in District of Columbia, Calvert, Charles, Montgomery, Prince
George's, St. Mary's, Arlington, Culpepper, Fairfax, Loudoun, Prince
William, Jefferson, Stafford counties, and Alexandria, Fairfax, Falls
Church, Manassas, and Manassas Park cities, and 40 MHz in Fauquier,
Frederick, and Rappahannock counties. T-Mobile holds 20 MHz throughout
the BTA. Verizon Wireless holds 55 MHz in District of Columbia, Calvert,
Charles, Frederick, Montgomery, Prince George's, St. Mary's, Arlington,
Culpepper, Fairfax, Fauquier, Loudoun, Prince William, Rappahannock, and
Stafford counties, and Alexandria, Fairfax, Falls Church, Manassas, and
Manassas Park cities, and 30 MHz in Jefferson County. In addition,
ALLTEL, Dobson, and US Cellular hold spectrum in this BTA.

Sprint and Nextel have significant overlapping coverage in all counties
except Jefferson, Rappahannock, and Culpepper. This overlap covers over
90 percent of the BTA's population, and if combined, the merged entity
would cover over 98 percent of the population. Cingular covers 99.6
percent, T-Mobile covers 93.2 percent, and Verizon Wireless covers 98.7
percent.

*Conclusion.* Overall, it appears that the transaction is not likely to
result in competitive harm in the Washington, DC BTA. The transaction
would lead to a **\[REDACTED\]** market share for the merged entity.
However, there will remain four national carriers with significant
market share post-transaction. The proposed merger would decrease the
number of carriers with greater than **\[REDACTED\]** percent of the
market from **\[REDACTED\]** to **\[REDACTED\]**. In addition, the three
other nationwide carriers cover more than **\[REDACTED\]** percent of
the BTA population. Therefore, these carriers have sufficient network
coverage to attract customers if the merged entity were to raise price
or reduce service following the transaction. Several other carriers also
have spectrum and these potential entrants may provide some added
constraint on the merged entity's behavior. In addition, as the
Applicants acknowledge, their SAC test did not take into account the 20
MHz of spectrum recently purchased by Verizon Wireless from NextWave.
This additional spectrum would substantially enhance the ability of
Verizon Wireless to absorb additional customers in this BTA.

**Los Angeles, CA (BTA 262)**

In the Los Angeles, California BTA (which has a population of 16,390,000
and a population density of about 369 POPs/sq mile), Sprint has between
**\[REDACTED\]** and **\[REDACTED\]** percent of the wireless
subscribers, while Nextel has between **\[REDACTED\]** and
**\[REDACTED\]** percent; combined, the merged entity would have a
post-merger share of between **\[REDACTED\]** and **\[REDACTED\]**
percent. The other carriers with market share in this BTA are Cingular,
with between **\[REDACTED\]** and **\[REDACTED\]** percent of the
wireless subscribers, Verizon Wireless with between **\[REDACTED\]** and
**\[REDACTED\]** percent, and T-Mobile with between **\[REDACTED\]** and
**\[REDACTED\]** percent.

The post-merger HHI in the BTA would be between **\[REDACTED\]** and
**\[REDACTED\]**, with an increase of between **\[REDACTED\]** and
**\[REDACTED\]** from the current figure.  Based on the additional
analysis below, however, we conclude that the level of competition in
this BTA, post-transaction would be more robust than the HHI figures
suggest for several reasons.

The merged entity would hold from 54.55 MHz to 57.25 MHz throughout the
BTA, with the variation depending on Nextel's spectrum holdings in
individual counties. Cingular holds 40 MHz in Inyo County and 65 MHz in
all the other counties[^448]. Verizon Wireless holds 55 MHz throughout
the BTA, and T-Mobile holds 20 MHz throughout the BTA. In addition,
ALLTEL holds spectrum in Inyo County (and has launched service there),
and Metro PCS was the winning bidder in Auction No. 58 for a 10 MHz
license in this BTA.

Sprint has network coverage in parts of five out of six counties in this
BTA (all but Inyo County) and Nextel has coverage in parts of all six
counties. The 5-county network coverage overlap covers approximately 95
percent of the BTA population. If combined, the merged entity would
cover 99.6 percent of the population. Cingular covers 99.9 percent,
Verizon Wireless covers 100 percent, and T-Mobile covers 89.8 percent.

*Conclusion**.* Overall, it appears that the transaction is not likely
to result in competitive harm in the Los Angeles, CA BTA. Although the
merged entity would have a **\[REDACTED\]** post-transaction market
share in this BTA, there will be three other national carriers in this
BTA with significant market share post-transaction, and the merged firm
would **\[REDACTED\]**. Also, the proposed transaction would combine
only the **\[REDACTED\]** and **\[REDACTED\]** largest carriers in terms
of market share. Further, there would remain four carriers with greater
than **\[REDACTED\]** percent of the market. In addition, the other
three national carriers cover more than **\[REDACTED\]** percent of the
BTA population and these carriers have sufficient network coverage to
attract customers if the merged entity were to raise price or reduce
service following the transaction. Finally, the Applicants' SAC analysis
did not take into account the 10 MHz of spectrum that Verizon Wireless
acquired earlier this year from NextWave, nor did it take into account
MetroPCS's winning bid for 10 MHz of spectrum in Auction No. 58. This
additional spectrum will enhance the ability of Verizon Wireless and
MetroPCS to absorb additional customers in this BTA.

**STATEMENT OF\
COMMISSIONER KATHLEEN Q. ABERNATHY**

***In the Matter of Applications of Nextel Communications, Inc. and
Sprint Corporation for Consent to Transfer Control of Licenses and
Authorizations, WT Docket No. 05-63.***

Today, we inject a healthy and strengthened dose of intermodal
competition into an already competitive U.S. communications market. By
approving this transaction, we allow the creation of the nation's
largest independent wireless carrier; one that will be a stronger and
more robust competitor to wireline and other nationwide wireless
carriers. While I have agreed to support the conditions mutually agreed
upon between the Applicants and some of my colleagues, I am pleased that
we do not impose extensive and unnecessary conditions on our approval.
It would be a mistake to hamstring the merged entity's ability to
provide the anticipated pro-competitive services to U.S. consumers.

**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

***In the Matter of Applications of Nextel Communications, Inc. and
Sprint Corporation for Consent to Transfer Control of Licenses and
Authorizations, WT Docket No. 05-63.***

Our data convinces me that this merger is not likely to reduce
competition to an unacceptable level in markets where the two companies
overlap.  In most markets Nextel and Sprint are not market share
leaders.  As a consequence, the merger of these companies does not give
the combined entity a dominant position or even the largest market share
in most markets.  Sprint Nextel, however, will be the market share
leader in a small number of markets.  But in most of these markets four
or more substantial competitors will continue to compete post-merger. 
In most of the rest of these markets, one or the other applicant has
little or no market share, so the merger does not significantly change
the competitive situation. 

 

As the Order notes, however, while this merger does not create market
dominance in any particular market, it is part of a trend that merits
close and continuing monitoring by the Commission.  In less than a year
mergers have reduced the number of national wireless competitors by one
third.  Only last year consumers could choose between six national
carriers.  There are now only four.  The average US market's HHI score
has grown from 2,900 (before the Cingular/AT&T merger) to 3,100 (after
the Cingular/AT&T merger) to 3,300 (after the Nextel/Sprint merger).
 That means that consumers in the average community now have the
equivalent of only 3.03 equal sized competitors---national, regional and
local combined.  While I am sensitive to the arguments that six national
competitors could not have been forever sustained in the wireless
market, I am also concerned about what this substantial reduction in the
number of competitors may mean for wireless consumers.  The FCC will
have to take a hard look at whether we have gone about as far as we can
go. 

                                     

Apart from our market-by-market analysis, the FCC must also judge
whether the merged entity will act in the public interest and whether
the applicants have the requisite "citizenship, character, financial,
technical, and other qualifications."  Measuring a company's compliance
with FCC public safety rules is, to my mind, central to this
determination.  Under our 911 public safety rules, ninety-five percent
of the applicants' customers must have handsets that can locate a caller
when they place a 911 call by the end of this year.  Nextel has admitted
that it will violate this rule and will miss the deadline by an alarming
two years. 

                                  

I believe we should have conditioned approval of this merger on Sprint
Nextel either meeting its 911 deadline, or having a waiver or consent
decree in place.  We should have insisted that Sprint Nextel immediately
get itself on a path to full public safety compliance.  I am
disappointed that we do not do more today to ensure compliance with our
public safety deadline.  I hope that we do not pay a price for this
decision, because Nextel's efforts to comply with our rules do not seem
to be working.  I am pleased, however, that the company is considering
stepping up its efforts to comply with our public safety rules by, for
example, offering cash incentives to spur necessary upgrades.  But
whatever efforts Sprint Nextel now takes, unless the company has a
waiver or consent decree approved by the FCC, it must still meet its
December 31, 2005 deadline.  If it does not do so, and if there is no
acceptable waiver or consent decree in place, today's Order states
explicitly that the Commission "will not hesitate to take enforcement
action."

 

Finally, I want to commend my colleague Commissioner Adelstein for his
hard work on this item, particularly on issues related to the 2.5 GHz
band and the wireline spin-off.  I was pleased to support his effort to
obtain a condition that the merged entity must meet wireless broadband
deployment milestones using its 2.5 GHz holdings.  This is vitally
important spectrum that needs to be utilized fully.  I hope that these
milestones will bring consumers some much needed broadband competition. 
I am also happy to support the condition related to the merged entity's
wireline spin-off.  This will help ensure that the spin-off company is
not weighted down by misallocations that could inhibit its ability to
compete.  The merged entity has committed that the "LTD Holding Company
will receive an equitable debt and asset allocation at the time of its
proposed spin-off so that the company will be a financially secure,
Fortune 500 company."  The continued strength of this company is
critically important to its workers and its customers.  The Commission
will monitor this commitment when we review the merged entity's
application to effectuate this spin-off.

 

Thanks to the merger team for all their hard work in bringing this
proceeding to us today.

**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

***In the Matter of Applications of Nextel Communications, Inc. and
Sprint Corporation For Consent to Transfer of Control of Licenses and
Authorizations, WT Docket No. 05-63.***

While I am somewhat troubled by the recent trend of consolidation among
mobile wireless carriers, I support this merger because it is critical
to have a strong independent carrier in the wireless industry to rival
those wireless providers that are predominantly controlled by regional
bell operating companies. Approving this merger will better balance the
competitive landscape by granting Sprint Nextel similar scale and scope
to the nation's largest nationwide carriers.

Compared to the original cellular providers, Sprint and Nextel are
relative newcomers to the mobile wireless industry, and they have taken
different paths to achieve their recent industry success. Sprint
aggressively rolled out the first digital Personal Communications
Service network, while Nextel transformed the 800 and 900 MHz
Specialized Mobile Radio bands with its own service offering, including
a well known push to talk feature. I am hopeful that this merger will
allow the companies to continue to develop together their unique product
offerings and services and build on their respective strengths for the
benefit of consumers. We want to see innovation like this succeed.
Indeed, it will be critical for telecommunications competition in the
future.

In this vein, I am very pleased that the companies have committed to
specific milestones in the deployment of services in the 2.5 GHz band. I
initially had concerns about Sprint Nextel amassing such a wide swath of
spectrum in this band without providing any clear plan for deployment. I
raised these issues with the companies, and have been encouraged by
their response. They met my concerns head on by providing a specific
schedule of implementation milestones that will ensure wireless
broadband services will be deployed to at least 30 million Americans
across a number of markets, both large and small. And, just as
important, they put their money where their mouth is by agreeing to be
subject to enforcement action in the event Sprint Nextel fails to meet
these commitments for reasons of circumstances within the company's
control.

This truly is a banner commitment for the wireless broadband industry.
It is said that a rising tide lifts all boats, and I believe that the
Sprint Nextel investment will help all providers in the 2.5 GHz band.
This level of effort will benefit to all stakeholders in the band,
particularly Education Broadband Services licensees and the equipment
and vendor communities. The infusion of capital into this market should
significantly stimulate product and service offerings that ultimately
will benefit both the commercial and educational segments of the 2.5 GHz
industry.

Finally, I also appreciate the company's efforts to address my concerns
about the financial health of the spin-off of the incumbent local
telephone operations. In a recent filing, the Chief Executive Officers
of both Sprint and Nextel indicated that the new local telephone company
"will receive an equitable debt and asset allocation at the time of its
proposed spin-off so that the company will be a financially secure,
Fortune 500 company." This positive step will protect Sprint\'s wireline
employees and ensure millions of primarily rural wireline customers
continue to see a high level of service and investment in advanced
services.

[^1]: Applications of Nextel Communications, Inc., and Sprint
    Corporation for Consent to Transfer Control of Licenses and
    Authorizations, ULS File No. 0002031766, *et al.* (filed February 8,
    2005) ("Applications").

[^2]: The term "2.5 GHz band" or "2500-2690 MHz" used throughout this
    Order includes both the 2150-2162 MHz band and 2500-2690 MHz band.

[^3]: Application, Public Interest Statement at 14-17.

[^4]: 47 U.S.C. §§ 214(a), 310(d).

[^5]: Nextel Communications, Inc., Form 10-K (filed Mar. 15, 2005)
    ("Nextel 10-K"), available at http://www.sec.gov/Archives/edgar/.

[^6]: *See* Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Third Report*, 13 FCC Rcd 19746, 19753 (1998) ("*Third
    Competition Report*"); Nextel 10-K at 1.

[^7]: *See* Applications to Assign Wireless Licenses from Chadmoore
    Wireless Group to Various Subsidiaries of Nextel Communications,
    Inc., WT Docket No. 01-193, *Memorandum Opinion and Order*, 16 FCC
    Rcd 21105 ¶ 2 (2001) ("*Nextel-Chadmoore Order*").

[^8]: Direct Connect^®^ provides trunked dispatch customers with an
    expanded dispatch service area and higher voice quality and extra
    security than analog trunked dispatch. *Id.* at 21106 & n.4.

[^9]: *See* *infra* Section V.B.1.a. In a small number of cases, Nextel
    is the licensee of EBS stations pursuant to the "wireless cable"
    exception to the EBS eligibility rules. *See* 47 C.F.R.
    27.1201(c)(1).

[^10]: Improving Public Safety Communications in the 800 MHz Band,
    *Report and Order, Fifth Report and Order, Fourth Memorandum Opinion
    and Order*, 19 FCC Rcd 14969 (2004) ("*800 MHz Report and Order*").

[^11]: *Id*.

[^12]: Nextel 10-K at 15; *Ninth Competition Report*, 19 FCC Rcd at
    20689 n.165.

[^13]: *See* Yahoo Finance, Quotes & Info, Nextel Communications, Inc.
    (NXTL) *at* http://finance.yahoo.com/q/mh?s=NXTL, (visited June 8,
    2005).

[^14]: *Ninth Competition Report*, Table 4 at Appendix A, A-8.

[^15]: Nextel 10-K at 1.

[^16]: *Id*.

[^17]: Sprint Corporation, Form 10-K, at 2 (filed Mar. 11, 2005)
    ("Sprint 10-K"), *available
    at*http://www.sec.gov/Archives/edgar/data.

[^18]: Application, Exhibit 1 at 13.

[^19]: Application, Public Interest Statement at 11.

[^20]: *Id*. at 26.

[^21]: *Sprint Begins Launch of EV-DO Wireless High-Speed Data Service*,
    News Release, Sprint, July 7, 2005.

[^22]: *Id*. at 12.

[^23]: *See infra* Section V.B.1.a. In a small number of cases, Sprint
    is the licensee of EBS stations pursuant to the "wireless cable"
    exception to the EBS eligibility rules. *See* 47 C.F.R.
    27.1201(c)(1).

[^24]: The Applicants stated that Sprint had relationships with twelve
    independent affiliates. *See* Application, Public Interest Statement
    at 17. An Informal Request for Commission Action by one of these
    affiliates, US Unwired, Inc., ("US Unwired") is addressed below.
    *See infra* Section V.C.2.

[^25]: Applications for Consent to Transfer of Control of Licenses and
    Section 214 Authorizations from Tele-communications, Inc. to AT&T
    Corp., CS Docket No. 98-178, *Order*, 17 FCC Rcd 8985 ¶ 2 (1998).

[^26]: *See* *Ninth Competition Report*, 19 FCC Rcd at 20629.

[^27]: *Id.*

[^28]: *Id*.

[^29]: *Id*.

[^30]: *Ninth Competition Report*, 19 FCC Rcd at 20630.

[^31]: *Id.*, Table 4 at Appendix A, A-8.

[^32]: Sprint 10-K at 34.

[^33]: *Id*. at 4.

[^34]: *Id*. at 32.

[^35]: *Id*. at 3.

[^36]: Application, Public Interest Statement at 1.

[^37]: Application, Attachment A to Public Interest Statement at 2.

[^38]: Application, Public Interest Statement at 10.

[^39]: *Id*.

[^40]: Application, Public Interest Statement at 1-2 & n.1; *see also*
    Application, Attachment A at 2, 6.

[^41]: *See* Application, Attachments E and J to Public Interest
    Statement.

[^42]: Basic Trading Areas ("BTAs") are Material Copyright (c) 1992 Rand
    McNally & Company. Rights granted pursuant to a license from Rand
    McNally & Company through an agreement with the Federal
    Communications Commission. BTAs are geographic areas drawn based on
    the counties in which residents of a given BTA make the bulk of
    their shopping goods purchases. Rand McNally\'s BTA specification
    contains 487 geographic areas covering the 50 states and the
    District of Columbia. For its spectrum auctions, the Commission
    added additional BTA-like areas for: American Samoa; Guam; Northern
    Mariana Islands; San Juan, Puerto Rico; Mayaguez/Aguadilla-Ponce,
    Puerto Rico; and the U.S. Virgin Islands. *See* *Ninth Competition
    Report*, 19 FCC Rcd at 20606 n.27.

[^43]: *See* Application, Attachment J to Public Interest Statement.

[^44]: *See* Improving Public Safety Communications in the 800 MHz Band,
    *Report and Order, Fifth Report and Order, Fourth Memorandum Opinion
    and Order*, 19 FCC Rcd 14969 (2004); Improving Public Safety
    Communications in the 800 MHz Band, *Supplemental Order and Order on
    Reconsideration*, 19 FCC Rcd 25120 (2004).

[^45]: All BTAs except Guam, American Samoa, and the Northern Mariana
    Islands. *See* Application, Attachment F to Public Interest
    Statement.

[^46]: *Id*.

[^47]: Application, Public Interest Statement at 47.

[^48]: *Id*.

[^49]: *Id*. at 48.

[^50]: 47 U.S.C. § 310(d).

[^51]: *See* Nextel Communications and Sprint Corporation Seek FCC
    Consent to Transfer Control of Licenses and Authorizations, *Public
    Notice*, 20 FCC Rcd 4119, 4120-4122 (2005) ("*Comment Public
    Notice*").

[^52]: Attachment, Public Interest Statement at 22-63.

[^53]: *Id*.

[^54]: *Id*.

[^55]: *Id*. at 57-64.

[^56]: Applications for the Transfer of Control of Licenses and
    Authorizations from Nextel Services, Inc. and Its Subsidiaries to
    Sprint Corporation; Protective Order, 20 FCC Rcd 3607 (2005).

[^57]: *Comment Public Notice*, 20 FCC Rcd at 4119. The Comment Public
    Notice set due dates of March 30, 2005 for Petitions to Deny, April
    11, 2005 for Oppositions, and April 18, 2005, for Replies. *See id*.
    at 4123.

[^58]: For the reasons we discuss, *infra*, we find that NY3G
    Partnership and the New Jersey Division of the Ratepayer Advocate
    pleadings did not comply with the requirements, under section
    309(d)(1) of the Communications Act, for the filing of a petition to
    deny. We nevertheless address those pleadings in the applicable
    sections of this Order. *See* Sections V.B.1.a. and V.A.6. The
    parties that filed formal pleadings in this proceeding are noted in
    Appendix A. In addition to those formal pleadings, we have received
    informal comments through *ex parte* submissions. *See* Appendix A.
    All pleadings and comments are available on the Commission's
    Electronic Comment Filing System ("ECFS") website at
    www.fcc.gov/cgb/ecfs/.

[^59]: CTC Net Petition to Deny at 7; CFA/CU Petition to Deny at 7; NY3G
    Partnership Petition to Deny at 3.

[^60]: Duncan Petition to Deny at 3; Preferred Communications Petition
    to Deny at 9; SAFE Coalition Petition to Deny at 5-9.

[^61]: Ratepayer Advocate Reply at 3-4.

[^62]: *Id*. at 5.

[^63]: Letter from Scott D. Delacourt, Deputy Chief, Wireless
    Telecommunications Bureau, Federal Communications Commission to
    Larry Krevor, Vice-President, Government Affairs, Nextel
    Communications, Inc. (April 29, 2005); Letter from Scott D.
    Delacourt, Deputy Chief, Wireless Telecommunications Bureau, Federal
    Communications Commission to Vonya McCann, Senior Vice-President,
    Federal External Affairs, Sprint Corporation (April 29, 2005).

[^64]: On May 20, 2005, after considering a joint written request from
    the Applicants, the Commission released another protective order to
    provide enhanced protection for a portion of the documents that the
    applicants believed to contain competitively sensitive business
    information and should not be shared with in-house counsel. *See*
    Applications for the Transfer of Control of Licenses and
    Authorizations from Nextel Services, Inc. and Its Subsidiaries to
    Sprint Corporation; Second Protective Order, WT Docket No. 05-63,
    Order (DA 05-423), 20 FCC Rcd \_\_ (2005); 2005 WL 516794. A number
    of the Applicants responses to the Initial Information Requests were
    filed subject to this Second Protective Order.

[^65]: Letter from Scott D. Delacourt, Deputy Chief, Wireless
    Telecommunications Bureau, Federal Communications Commission to
    Larry Krevor, Vice-President, Government Affairs, Nextel
    Communications, Inc. (May 6, 2005); Letter from Scott D. Delacourt,
    Deputy Chief, Wireless Telecommunications Bureau, Federal
    Communications Commission to Vonya McCann, Senior Vice-President,
    Federal External Affairs, Sprint Corporation (May 6, 2005); Letter
    from Scott D. Delacourt, Deputy Chief, Wireless Telecommunications
    Bureau, Federal Communications Commission to Don Manning,
    Vice-President, Nextel Partners (May 6, 2005); Letter from Scott D.
    Delacourt, Deputy Chief, Wireless Telecommunications Bureau, Federal
    Communications Commission to John T. Scott III, Deputy General
    Counsel, Regulatory Law, Verizon Wireless (May 6, 2005); Letter from
    Scott D. Delacourt, Deputy Chief, Wireless Telecommunications
    Bureau, Federal Communications Commission to Thomas J. Sugrue, Vice
    President, Federal Government Affairs, T-Mobile USA, Inc. (May 6,
    2005); Letter from Scott D. Delacourt, Deputy Chief, Wireless
    Telecommunications Bureau, Federal Communications Commission to
    Glenn S. Rabin, Vice President, Federal Communications Counsel,
    ALLTEL Corporation (May 6, 2005); Letter from Scott D. Delacourt,
    Deputy Chief, Wireless Telecommunications Bureau, Federal
    Communications Commission to Mark Rubin, Federal Government Affairs,
    Western Wireless Corporation (May 6, 2005); Letter from Scott D.
    Delacourt, Deputy Chief, Wireless Telecommunications Bureau, Federal
    Communications Commission to Michael Rosenthal, Director of
    Regulatory Affairs, Southern LINC Wireless (May 6, 2005); Letter
    from Scott D. Delacourt, Deputy Chief, Wireless Telecommunications
    Bureau, Federal Communications Commission to David G. Richards,
    Chief Counsel, Federal Regulatory, Cingular Wireless, LLC (May 6,
    2005).

[^66]: 15 U.S.C. § 18.

[^67]: DOJ, *Statement of the Department of Justice Antitrust Division
    on the Closing of the Investigation of Sprint Corporation\'s
    Acquisition of Nextel Communications Inc*. (press release) Aug. 3,
    2005.

[^68]: 47 U.S.C. §§ 214(a), 310(d).

[^69]: Section 310(d), 47 U.S.C. § 310(d), requires that we consider the
    applications as if the proposed transferee were applying for the
    licenses directly under section 308 of the Act, 47 U.S.C. § 308.
    *See* Applications of AT&T Wireless Services, Inc., Transferor, and
    Cingular Wireless, Corp., Transferee, *Memorandum Opinion and
    Order*, 19 FCC Rcd 21522, 21543 ¶ 40 (2004) ("*Cingular-AT&T
    Wireless Order*"); Applications of VoiceStream Wireless Corporation
    or Omnipoint Corporation, Transferors, and VoiceStream Wireless
    Holding Company, Cook Inlet/VS GSM II PCS, LLC, or Cook Inlet/VS GSM
    III PCS, LLC, Transferees, *Memorandum Opinion and Order*, 15 FCC
    Rcd 3341, 3345-46 ¶ 10 (2000) ("*VoiceStream-Omnipoint Order*");
    Application of WorldCom, Inc. and MCI Communications Corporation for
    Transfer of Control of MCI Communications Corporation to WorldCom,
    Inc., *Memorandum Opinion and Order*, 13 FCC Rcd 18025, 18030 ¶ 8
    (1998) ("*WorldCom-MCI Order*"); *SBC-BellSouth Order*, 15 FCC Rcd
    at 25464 ¶ 12; Vodafone AirTouch, PLC, and Bell Atlantic
    Corporation, *Memorandum Opinion and Order*, 15 FCC Rcd 16507,
    16511-12 ¶ 12 (WTB, IB 2000) ("*Bell Atlantic-Vodafone Order*").

[^70]: *See, e.g., Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21543 ¶
    40; Applications for Consent to the Assignment of Licenses Pursuant
    to section 310(d) of the Communications Act from NextWave Personal
    Communications, Inc., Debtor-in-Possession, and NextWave Power
    Partners, Inc., Debtor-in Possession, to Subsidiaries of Cingular
    Wireless LLC, *Memorandum Opinion and Order*, 19 FCC Rcd 2570,
    2580-81 ¶ 24 (2004) ("*Cingular-NextWave Order*"); General Motors
    Corporation and Hughes Electronics Corporation, Transferors, and The
    News Corporation Limited, Transferee, *Memorandum Opinion and
    Order*, 19 FCC Rcd 473, 484 ¶ 16 (2004) ("*GM-News Corp. Order*");
    Application of EchoStar Communications Corporation (A Nevada
    Corporation), General Motors Corporation, and Hughes Electronics
    Corporation (Transferors) and EchoStar Communications Corporation (A
    Delaware Corporation) (Transferee), *Hearing Designation Order*, 17
    FCC Rcd 20559, 20574 ¶ 25 (2002) ("*EchoStar-DirecTV HDO*"); AT&T
    Corp., British Telecommunications, PLC, VLT Co. L.L.C, Violet
    License Co. LLC, and TNV \[Bahamas\] Limited Applications,
    *Memorandum Opinion and Order*, 14 FCC Rcd 19140, 19150 ¶ 20 (1999)
    ("*AT&T Corp.-British Telecom. Order*"); Applications to Assign
    Wireless Licenses from WorldCom Inc. (Debtor-in-Possession) to
    Nextel Spectrum Acquisition Corp., *Memorandum Opinion and Order*,
    19 FCC Rcd 6232, 6241 ¶ 23 (WTB, MB 2004) ("*Nextel-WorldCom
    Order*"); Application of TeleCorp PCS, Inc., Tritel, Inc., and
    Indus, Inc. and 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, *Memorandum
    Opinion and Order*, 16 FCC Rcd 3716, 3721-22 ¶ 12 (WTB 2000); GTE
    Corporation, Transferor, and Bell Atlantic Corporation, Transferee,
    *Memorandum Opinion and Order*, 15 FCC Rcd 14032, 14045 ¶ 20, 14046
    ¶ 22 (2002) ("*Bell Atlantic-GTE Order*").

[^71]: *See, e.g., Cingular-NextWave Order*, 19 FCC Rcd at 2580-81 ¶ 24
    (2004); *GM-News Corp. Order*, 19 FCC Rcd at 483 ¶ 15; WorldCom,
    Inc. and Its Subsidiaries (Debtors-in-Possession), Transferor, and
    MCI, Inc., Transferee, *Memorandum Opinion and Order*, 18 FCC Rcd
    26484, 26492 ¶ 12 (2003) ("*WorldCom Order*"); Applications for
    Consent to the Transfer of Control of Licenses from Comcast
    Corporation and AT&T Corp., Transferors, to AT&T Comcast
    Corporation, Transferee, *Memorandum Opinion and Order*, 17 FCC Rcd
    23246, 23255 ¶ 26 (2002) ("*AT&T-Comcast Order*"); *EchoStar-DirecTV
    HDO*, 17 FCC Rcd at 20574 ¶ 25; VoiceStream Wireless Corporation,
    PowerTel, Inc., Transferors, and Deutsche Telekom AG, Transferee,
    *Memorandum Opinion and Order*, 16 FCC Rcd 9779, 9789 ¶ 17 (2001)
    ("*Deutsche Telekom-VoiceStream Order*"); *Bell Atlantic-GTE Order*,
    15 FCC Rcd at 14045 ¶ 20, 14046 ¶ 22; *VoiceStream-Omnipoint Order*,
    15 FCC Rcd at 3347 ¶ 12; *AT&T Corp.-British Telecom. Order*, 14 FCC
    Rcd at 19150 ¶ 20; *WorldCom-MCI Order*, 13 FCC Rcd at 18031 ¶ 10;
    *Nextel-WorldCom Order*, 19 FCC Rcd at 6241-42 ¶ 23; *SBC-BellSouth
    Order*, 15 FCC Rcd at 25464 ¶ 13, 25467 ¶ 18; *Bell
    Atlantic-Vodafone Order*, 15 FCC Rcd at 16512 ¶ 13, 16517 ¶ 25.

[^72]: *See, e.g., Cingular-NextWave Order*, 15 FCC Rcd at 2581 ¶ 24;
    *GM-News Corp. Order*, 19 FCC Rcd at 483 ¶ 15; *AT&T-Comcast Order*,
    17 FCC Rcd at 23255 ¶ 26; *EchoStar-DirecTV HDO*, 17 FCC Rcd at
    20574 ¶ 25; *Bell Atlantic-GTE Order*, 15 FCC Rcd at 14046 ¶ 22;
    *VoiceStream-Omnipoint Order*, 15 FCC Rcd at 3347 ¶ 11;
    *SBC-BellSouth Order*, 15 FCC Rcd at 25464 ¶ 13; *Bell
    Atlantic-Vodafone Order*, 15 FCC Rcd at 16512 ¶ 13; Applications for
    Consent to the Transfer of Control of Licenses and Section 214
    Authorizations from Tele-Communications, Inc., Transferor, to AT&T
    Corp., Transferee, *Memorandum Opinion and Order*, 14 FCC Rcd 3160,
    3169 ¶ 15 (1999) ("*AT&T-TCI Order*"); *WorldCom-MCI Order*, 13 FCC
    Rcd at 18,031-32 ¶ 10.

[^73]: 47 U.S.C. § 309(e). *See also* *GM-News Corp. Order*, 19 FCC Rcd
    at 483 n.49; *AT&T-Comcast Order*, 17 FCC Rcd at 23255 ¶ 26;
    *EchoStar-DirecTV HDO*, 17 FCC Rcd at 20574 ¶ 25; *Bell Atlantic-GTE
    Order*, 15 FCC Rcd at 14231 ¶ 435; *WorldCom-MCI Order*, 13 FCC Rcd
    at 18139-40 ¶ 202. Section 309(e)'s requirement applies only to
    those applications to which Title III of the Act applies, *i.e.*,
    radio station licenses. We are not required to designate for hearing
    applications for the transfer or assignment of Title II
    authorizations when we are unable to find that the public interest
    would be served by granting the applications, *see ITT World
    Communications, Inc. v. FCC*, 595 F.2d 897, 901 (2d Cir. 1979), but
    of course may do so if we find that a hearing would be in the public
    interest.

[^74]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 41;
    *GM-News Corp. Order*, 19 FCC Rcd at 483 ¶ 16; *AT&T-Comcast Order*,
    17 FCC Rcd at 23255 ¶ 27; *EchoStar-DirecTV HDO*, 17 FCC Rcd at
    20575 ¶ 26; Applications for Consent to the Transfer of Control of
    Licenses and Section 214 Authorizations from MediaOne Group, Inc.,
    Transferor, to AT&T Corp., Transferee, CS Docket No. 99-251,
    *Memorandum Opinion and Order*, 15 FCC Rcd 9816, 9821 ¶ 11 (2000)
    ("*AT&T-MediaOne Order*"); *VoiceStream-Omnipoint Order*, 15 FCC Rcd
    at 3346-47 ¶ 11; *AT&T Corp.-British Telecom. Order*, 14 FCC Rcd at
    19146 ¶ 14; *WorldCom-MCI Order*, 13 FCC Rcd at 18030 ¶ 9.

[^75]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 41;
    *AT&T-Comcast Order*, 17 FCC Rcd at 23,255 ¶ 27; *AT&T-MediaOne
    Order*, 15 FCC Rcd at 9821-22 ¶ 11; *WorldCom-MCI Order*, 13 FCC Rcd
    at 18031 ¶ 9.

[^76]: *See AT&T-Comcast Order*, 17 FCC Rcd at 23,255 ¶ 27;
    *AT&T-MediaOne Order*, 15 FCC Rcd at 9821-22 ¶ 11; *WorldCom-MCI
    Order*, 13 FCC Rcd at 18031 ¶ 9.

[^77]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 42;
    *GM-News Corp. Order*, 19 FCC Rcd at 484 ¶ 17; *EchoStar-DirecTV
    HDO*, 17 FCC Rcd at 20575 ¶ 26; *Bell Atlantic-GTE Order*, 15 FCC
    Rcd at 14046 ¶ 23; *AT&T-Comcast Order*, 17 FCC Rcd at 23256 ¶ 28;
    *AT&T-TCI Order*, 14 FCC Rcd at 3168-69 ¶ 14; *WorldCom-MCI Order*,
    13 FCC Rcd at 18033 ¶ 13. *See also Satellite Business Systems*, 62
    F.C.C.2d 997, 1088 (1977), *aff'd sub nom United States v. FCC*, 652
    F.2d 72 (DC Cir. 1980) (*en banc*); *Northern Utilities Service Co.
    v. FERC*, 993 F.2d 937, 947-48 (1^st^ Cir. 1993) (public interest
    standard does not require agencies "to analyze proposed mergers
    under the same standards that the Department of Justice . . . must
    apply").

[^78]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 42;
    *GM-News Corp. Order*, 19 FCC Rcd at 484 ¶ 17; *EchoStar-DirecTV
    HDO*, 17 FCC Rcd at 20575 ¶ 26; *Bell Atlantic-GTE Order*, 15 FCC
    Rcd at 14046 ¶ 23; *AT&T-Comcast Order*, 17 FCC Rcd at 23256 ¶ 28;
    *AT&T-TCI Order*, 14 FCC Rcd at 3169 ¶ 14; *WorldCom-MCI Order*, 13
    FCC Rcd at 18033 ¶ 12.

[^79]: 15 U.S.C. § 18.

[^80]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 42;
    *AT&T-Comcast Order*, 17 FCC Rcd at 23256 ¶ 28; *AT&T-MediaOne
    Order*, 15 FCC Rcd at 9821 ¶ 10.

[^81]: *Bell Atlantic-GTE Order*, 15 FCC Rcd at 14047 ¶ 23; *AT&T
    Corp.-British Telecom. Order*, 14 FCC Rcd at 19,150 ¶ 15;
    *AT&T-Comcast Order*, 17 FCC Rcd at 23256 ¶ 28.

[^82]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 42;
    Applications for Consent to the Transfer of Control of Licenses and
    Section 214 Authorizations by Time Warner, Inc. and American Online,
    Inc. Transferors, to AOL Time Warner Inc., Transferee, *Memorandum
    Opinion and Order*, 16 FCC Rcd 6547, 6550 ¶ 5, 6553 ¶ 15 (2001)
    ("*AOL-Time Warner Order*").

[^83]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 43; *Bell
    Atlantic-GTE Order*, 15 FCC Rcd at 14047 ¶ 24; *AT&T Corp.-British
    Telecom. Order*, 14 FCC Rcd at 19150 ¶ 15. S*ee also* *WorldCom-MCI
    Order*, 13 FCC Rcd at 18032 ¶ 10 (conditioning approval on the
    divesture of MCI's Internet assets); *Deutsche Telekom-VoiceStream
    Wireless Order*, 16 FCC Rcd 9779 (2001) (conditioning approval on
    compliance with agreements with Department of Justice and Federal
    Bureau of Investigation addressing national security, law
    enforcement, and public safety concerns).

[^84]: 47 U.S.C. § 303(r). *See Cingular-AT&T Wireless Order*, 19 FCC
    Rcd at 21543 ¶ 43; *Bell Atlantic-GTE Order*, 15 FCC Rcd at 14047 ¶
    24; *WorldCom-MCI Order*, 13 FCC Rcd at 18032 ¶ 10 (*citing FCC v.
    Nat'l Citizens Comm. for Broadcasting*, 436 U.S. 775 (1978)
    (upholding broadcast-newspaper cross-ownership rules adopted
    pursuant to section 303(r)); *U.S. v. Southwestern Cable Co.,* 392
    U.S. 157, 178 (1968) (section 303(r) powers permit Commission to
    order cable company not to carry broadcast signal beyond station's
    primary market); *United Video, Inc. v. FCC,* 890 F.2d 1173, 1182-83
    (D.C. Cir. 1989) (syndicated exclusivity rules adopted pursuant to
    section 303(r) authority).

[^85]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 43; *Bell
    Atlantic-GTE Order*, 15 FCC Rcd at 14047 ¶ 24; *AT&T Corp.-British
    Telecom. Order*, 14 FCC Rcd at 19150 ¶ 15.

[^86]: *See*, *e.g.*, *Cingular-AT&T Wireless Order* , 19 FCC Rcd at
    21543 ¶ 43; *GM-News Corp. Order*, 19 FCC Rcd at 477 ¶ 5; *Bell
    Atlantic-GTE Order*, 15 FCC Rcd at 14047-48 ¶ 24; *WorldCom-MCI
    Order*, 13 FCC Rcd at 18034-35 ¶ 14. *See* *also* *Schurz
    Communications, Inc. v. FCC*, 982 F.2d 1043, 1049 (7^th^ Cir. 1992)
    (discussing Commission's authority to trade off reduction in
    competition for increase in diversity in enforcing public interest
    standard).

[^87]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 43;
    *GM-News Corp. Order*, 19 FCC Rcd at 534 ¶ 131; *AT&T-Comcast
    Order*, 17 FCC Rcd at 23302 ¶ 140; *AOL-Time Warner Order*, 16 FCC
    Rcd at 6550 ¶ 5-6.

[^88]: *See* *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 43;
    *AOL-Time Warner Order*, 16 FCC Rcd at 6610 ¶¶ 146-47.

[^89]: *See* 47 U.S.C. §§ 308, 310(d); *Cingular-AT&T Wireless Order* 19
    FCC Rcd at 21543 ¶ 44; *GM-News Corp. Order*, 19 FCC Rcd at 485 ¶
    18.

[^90]: *See* 47 U.S.C. § 310(d); 47 C.F.R. § 1.948; *see, e.g.,*
    *Cingular-AT&T Wireless Order* 19 FCC Rcd at 21543 ¶ 44; *GM-News
    Corp. Order*, 19 FCC Rcd at 485 ¶ 18; *WorldCom Order*, 18 FCC Rcd
    at 26493 ¶ 13; *Deutsche Telekom-VoiceStream Order*, 16 FCC Rcd at
    9790 ¶ 19.

[^91]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21543 ¶ 44;
    *Deutsche Telekom-VoiceStream Order*, 16 FCC Rcd at 9790 ¶ 19;
    *SBC-BellSouth Order*, 15 FCC Rcd at 25465 ¶ 14.

[^92]: *See* Applications to Assign Wireless Licenses from WorldCom,
    Inc. (Debtor-In-Possession) to Nextel Spectrum Acquisition Corp.,
    *Memorandum Opinion and Order*, 19 FCC Rcd 6232, 6242 ¶ 26 (2004);
    Wireless Telecommunications Bureau Assignment of Authorization and
    Transfer of Control Applications, Report No. 1729 (Jan. 28, 2004)
    (consenting to the assignment of call sign WPZU405 (formerly
    KNLF206) to Wireless Co. L.P., a wholly owned subsidiary of Sprint).

[^93]: *See, e.g., Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21556 ¶
    68; Regulatory Treatment of LEC Provision of Interexchange Services
    Originating in the LEC's Local Exchange Area and Policy and Rules
    Concerning the Interstate, Interexchange Marketplace, *Second Report
    and Order in CC Docket No. 96-149 and* *Third Report and Order in CC
    Docket No. 96-61,* 12 FCC Rcd. 15756, 15802-03 ¶ 83 (1997) ("*LEC
    Classification Order*"); Policy and Rules Concerning Rates for
    Competitive Common Carrier Services and Facilities Authorizations,
    *Fourth Report and Order,* 95 FCC 2d 554, 558 ¶ 7-8 (1983)
    ("*Competitive Carrier Fourth Report and Order*"), *vacated on other
    grounds,* AT&T v. FCC, F.2d 727 (D.C. Cir. 1992), *cert. denied,*
    MCI Telecommunications Corp. v. AT&T, 113 S. Ct. 3020 (1993);
    *DOJ/FTC Merger Guidelines* § 0.1.

[^94]: *Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21556 ¶ 68;
    *DOJ/FTC Merger Guidelines* § 0.1, n.6.

[^95]: *Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21556 ¶ 68.

[^96]: *Id.* at *21556* ¶ 69; *DOJ/FTC Merger Guidelines* § 1.0.

[^97]: *Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21556 ¶ 69.

[^98]: *Id*. at 21557 ¶ 70.

[^99]: The HHI is the sum of the squares of the market shares of each
    firm participating in the market. The HHI can range from nearly zero
    in an atomistic market to 10,000 in the case of monopoly. Since the
    HHI is based on squared market shares, it gives proportionally
    greater weight to carrier with large market shares. *See* Horizontal
    Merger Guidelines, issued by the U.S. Department of Justice and the
    Federal Trade Commission, at § 1.5 (Apr. 2, 1992, revised Apr. 8,
    1997) ("DOJ/FTC Merger Guidelines"); *Cingular-AT&T Wireless Order*,
    19 FCC Rcd at 21564 n.306.

[^100]: The CMAs identified by the screen overlap to a very large extent
    with the CEAs identified. *Cingular/AT&T Wireless Order*, 19 FCC Rcd
    at 21564 ¶ 104. CEAs, which are defined by the Bureau of Economic
    Analysis, are composed of a single economic node and surrounding
    counties that are economically related to the node. There are 348
    CEAs in the 50 States and the District of Columbia. Of the 3,141
    U.S. counties, 2,267 are non-nodal counties assigned to a CEA based
    first on county-to-county commuting flows from the 1990 Census and
    second on locations of the most widely read regional newspapers.
    Three quarters of non-nodal counties were assigned based on
    commuting patterns. *See* Kenneth P. Johnson, *Redefinition of the
    BEA Economic Areas*, [Survey of Current Business]{.smallcaps}, Feb.
    1995, at 75-81. In November 2004, the Bureau of Economic Analysis
    updated definitions for CEAs. The total number of CEAs decreased
    from 348 to 344. Non-nodal county assignment continued to be based
    on county-to-county commuting flows and locations of the most widely
    read regional newspapers. *See* Kenneth P. Johnson & John R. Kort,
    *2004 Redefinition of the BEA Economic Areas*, [Survey of Current
    Business]{.smallcaps}, Nov. 2004, at 68-71. For purposes of this
    transaction, we did not adopt the new CEA definitions. CMAs are the
    regions originally used by the Commission in issuing licenses for
    cellular service. There are 734 CMAs, made up of 305 Metropolitan
    Statistical Areas ("MSAs"), 428 Rural Service Areas ("RSAs"), and a
    market for the Gulf of Mexico. *See* *Ninth Competition Report*, 19
    FCC Rcd at 20632 ¶ 87. RSAs are regions defined by the Commission
    for the purpose of issuing spectrum licenses. *See* *Ninth
    Competition Report*, 19 FCC Rcd at 20632 ¶ 87.

[^101]: **\[REDACTED\]** In this Order, "REDACTED" indicates
    confidential or proprietary information subject to the Protective
    Order in this proceeding. Applications for the Transfer of Control
    of Licenses and Authorizations from Nextel Services, Inc. and Its
    Subsidiaries to Sprint Corporation; *Protective Order*, 20 FCC Rcd
    3607 (2005). The unredacted text is included in the confidential
    version of this Order, which is available upon request only to those
    parties who have executed and filed with the Commission signed
    acknowledgments of the protective order. Qualified persons who have
    not yet signed the required acknowledgment may do so in order to
    obtain the confidential version of this Order.

[^102]: *United States v. E.I. du Pont de Nemours & Co.,* 351 U.S. 377,
    395 (1956); *see also United States v. Microsoft*, 253 F.3d 34, 52
    (D.C. Cir. 2001), *cert. denied*, 534 U.S. 952 (2001) (discussing
    non-interchangeability among products); *Wireless Telephone Services
    Antitrust Litigation*, No. 02 Civ. 2637(DLC), 2003 WL 21912603 at 9
    (S.D.N.Y. Aug. 12, 2003) (relevant product market "consists of
    products that have reasonable interchangeability for the purposes
    for which they are produced -- price, use and qualities
    considered").

[^103]: The Commission has considered whether one product is a
    reasonable substitute for another product. *See* *Cingular-AT&T
    Wireless Order*, 19 FCC Rcd at 21557 ¶ 71; Applications of Western
    Wireless Corp. and ALLTEL Corp., WT Docket No. 05-50, *Memorandum
    Opinion and Order*, FCC 05-138, 2005 WL 1693557, ¶¶ 60-64 (rel. July
    19, 2005) ("*ALLTEL-Western Wireless Order*").

[^104]: *See* *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21557 ¶ 71 &
    n.259 (citing *DOJ/FTC Merger Guidelines* §§ 1.11, 1.12 and Gregory
    Werden, *The 1982 Merger Guidelines and the Ascent of the
    Hypothetical Monopolist Paradigm*, 71 [Antitrust L.J.]{.smallcaps}
    253 (2003)).

[^105]: *See* *Cingular-AT&T Wireless* *Order*, 19 FCC Rcd at 21558 ¶
    73; *DOJ/FTC Merger Guidelines* §§ 1.11.

[^106]: Application, Public Interest Statement at 68.

[^107]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21558 ¶ 74.

[^108]: *See id.* at 21588, 21559-60, 21560 ¶¶ 74, 77, 79.

[^109]: Interconnected mobile voice consists of all commercially
    available two-way mobile voice services, providing access to the
    public switched telephone network via mobile communications devices
    employing radiowave technology to transmit calls. *See Ninth
    Competition Report*, 19 FCC Rcd at 20611-12 ¶ 32.

[^110]: Mobile data service is considered to be the delivery of
    non-voice information to a mobile device. Two-way mobile data
    services include the ability not only to receive non-voice
    information on an end-user device, but also to send it from an
    end-user device to another mobile or landline device using wireless
    technology. Data services available today include, but are not
    limited to, short messaging service, e-mail, and access to the
    Internet. *See Ninth Competition Report*, 19 FCC Rcd at 20612 ¶ 33.

[^111]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21558 ¶ 74;
    *ALLTEL-Western Wireless Order,* 2005 WL 1693557, ¶¶ 25-31.

[^112]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21558 ¶ 75.

[^113]: *See Ninth Competition Report*, 19 FCC Rcd at 20659 ¶ 153
    (citing Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Eighth Report*, 18 FCC Rcd 14783, 14846-14855 ¶¶ 143-166
    (2003) ("*Eighth Competition Report"*)).

[^114]: Simon Flannery *et al*., *1Q05 Trend Tracker: The Telecom
    Conundrum*, Morgan Stanley, Equity Research, June 8, 2005, at 25
    ("*1Q05 Trend Tracker: The Telecom Conundrum*"). *See also* Daniel
    Henriques *et al*., *The Quarter in Pictures, 1Q05 U.S. Telecom
    Services Review*, Goldman Sachs, Global Investment Research, May
    2005, at 24 ("*The Quarter in Pictures, 1Q05 U.S. Telecom Services
    Review*"); John Byrne *et al*., *Wireless Telecom Investor*, Kagan
    Research, LLC, June 6, 2005, at 5 ("*Wireless Telecom Investor*").

[^115]: *1Q05 Trend Tracker: The Telecom Conundrum* at 25. *See also*
    *The Quarter in Pictures, 1Q05 U.S. Telecom Services Review* at 24;
    *Wireless Telecom Investor* at 5.

[^116]: We find that our reasoning here does not conflict with the
    *Cingular-AT&T Wireless* *Order* where the Commission addressed
    Sprint's role in the mobile data services market relative to the
    mobile voice services market. *See Cingular-AT&T Wireless Order*, 19
    FCC Rcd at 21558-60 ¶¶ 75-77. Indeed, that decision recognized
    Sprint's position in the mobile data market, and a major reason for
    the proposed Sprint Nextel transaction is the potential for improved
    access by Nextel's customers to data services.

[^117]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21558, 21560
    ¶¶ 74, 79.

[^118]: One analyst estimated that, in 2004, only 25 percent of wireless
    users were business customers, with the remaining 75 percent being
    consumers. *10-Year Wireless Projections*, [Kagan Wireless Telecom
    Investor]{.smallcaps}, June 6, 2005, at 2. **\[REDACTED\]**

[^119]: IDC recently projected U.S. consumer wireless ARPU to increase
    to \$48 in 2009, and U.S. business wireless ARPU to increase to \$74
    in 2009. Press Release, IDC, "IDC Forecasts Both U.S. Consumer and
    Business Wireless Subscriber ARPU to Trend Upward Through 2009,"
    (April 14, 2005) *at*
    http://www.idc.com/getdoc.jsp?containerId=prUS00125505 (last visited
    July 28, 2005). *See also* Ric Prentiss, *et al*., *Nextel
    Communications, Inc.: Initiation of Coverage,* [Raymond James,
    Equity Research]{.smallcaps}, Feb. 9, 2004, at 6 (stating that
    business customers generally spend more than consumers) ("*Nextel:
    Initiation of Coverage*"); *Wireless Services, Characteristics of
    Wireless Subscribers and Non-Users*, [Bear Stearns, Equity
    Research]{.smallcaps}, Feb. 2005, at 6, Ex. 9 (comparison of
    "Average Monthly Expenditure Across Motivations for Adopting
    Wireless" shows highest expenditure is for business purposes);
    **\[REDACTED\]**

[^120]: *See*, e.g., Application, Attachment B, Charles River Associates
    Analysis ("CRA Analysis") at 49 ¶ 133 (stating that "high degree of
    competition for enterprise customers" constrains certain prices);
    **\[REDACTED\]** Holly Wade, *Telecommunications*, [Nat'l Small
    Business Poll]{.smallcaps}, Issue 8, at 6 (2004) (discussing
    competition among cell phone service providers; fifty-four percent
    of owners of small businesses polled believed there was more
    competition for their business among cell phone providers at time of
    poll than three years before; on average small business owners were
    aware of 5 cell phone service providers in their area).

[^121]: In addition, we note that Nextel's focus has been on business
    customers whereas Sprint's focus has traditionally been on
    consumers. *See* CRA Analysis at 33-34 ¶ 88 (Nextel's focus more
    toward business, while Sprint's offerings are designed to appeal
    toward non-enterprise customers); *Nextel Initiation of Coverage* at
    14 ("Nextel's main focus is business customers, which represent
    approximately 70 percent of the total customer base.");
    **\[REDACTED\]**Therefore, it is unlikely that the combined Sprint
    Nextel will gain a disproportionate share of either residential
    customers or enterprise customers as a result of the merger. This in
    turn implies that an analysis based on Sprint Nextel's share of
    mobile telephony subscribers would not miss any potential
    competitive harms to both the residential market and the enterprise
    market as a result of the transaction.

[^122]: *Local Telephone Competition: Status as of December 31, 2004*,
    Federal Communications Commission, July 2005, Table 13: Mobile
    Wireless Telephone Subscribers.

[^123]: CRA Analysis at 19-20 ¶¶ 49-54.

[^124]: *Id.* at 20 ¶ 52.

[^125]: *See id.* at 19-20 ¶ 51-52.

[^126]: *See*, *e.g.*, Commerce Times, "Push-to-Talk Might Evolve as
    Standard Cellular Feature," ecommercetimes.com *at*
    http://www.technewsworld.com/story/43225.html (visited July 13,
    2005).

[^127]: Applications of Motorola Inc., *Order*, 16 FCC Rcd 8451, 8457 ¶
    13 (WTB) *recon. denied*, 16 FCC Rcd 15235 (WTB 2001)
    ("*Motorola"*).

[^128]: *Id.* *See* *also* *Ninth Competition Report,* 19 FCC Rcd at
    20633-34 ¶¶ 89. *See also*; 47 C.F.R. § 22.99 (defining dispatch for
    purposes of Part 22 as certain communications that are "transmitted
    directly through a base station, without passing through mobile
    telephone switching facilities.").

[^129]: *Motorola*, 16 FCC Rcd at 8457 ¶ 13.

[^130]: In contrast, unbundled offerings may be made, for instance, by
    small, independent, regional providers of unbundled dispatch. *See*
    SAFE Petition to Deny at 5.

[^131]: The Safety and Frequency Equity Competition Coalition ("SAFE")
    alleges that Applicant's proposed license assignments do not
    adequately address the recognition of SMR dispatch as a
    differentiated service. *See* SAFE Petition to Deny at 5; SAFE Reply
    to Joint Opposition at iii, 4-6. SouthernLINC Wireless raises issues
    concerning the impact of the proposed merger on roaming, and avers
    that the merger involves a distinct customer segment of
    interconnected voice and PTT digital dispatch services on the iDEN
    network. SouthernLINC Wireless Comments at 4.

[^132]: Also, as discussed below, we find that Sprint does not currently
    offer a PTT service that is a close enough substitute for Nextel's
    offering that this proposed merger would increase the probability of
    adverse unilateral harm to consumers interested in PTT. *See infra*
    Section V.A.4.b.

[^133]: SAFE Coalition Petition to Deny at 6.

[^134]: *See* SAFE Reply to Joint Opposition at 4-8.

[^135]: *See* Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Sixth Report*, 16 FCC Rcd 13350, 13353 (2001) ("*Sixth
    Competition Report*") (noting recognition of increasing convergence
    of services provided by dispatch and other mobile telephony
    services); *Ninth Competition Report*, 19 FCC Rcd at 20634 ¶ 89
    (discussing development of dispatch functionality by carriers).

[^136]: *See, e.g., Sixth Competition Report*, 16 FCC Rcd at 13353 n.11;
    *Ninth Competition Report*, 19 FCC Rcd at 20608 n.32.

[^137]: Valente and West Decl. at 2 ¶ 2; Application, Public Interest
    Statement at 24 (Direct Connect "enables customers to quickly
    establish private, one-to-one conferences nationwide or within a
    group, or local one-to-many conferences.").

[^138]: *See* *Ninth Competition Report,* 19 FCC Rcd at 20634 ¶ 89.

[^139]: *See* Sprint Voice Features *at*
    http://www.sprint.com/business/products/categories/voiceFeatures.jsp
    (last visited July 27, 2005) ("Sprint Voice Features website"). *See
    also* Valente and West Decl., Attachment 1 at 3 ¶ 7.

[^140]: *See Ninth Competition Report*, 19 FCC Rcd at 20644-45 ¶ 114
    (discussing pricing plans of various firms, including Verizon
    Wireless, Cingular, and Sprint).

[^141]: *See infra* Section V.A.4.

[^142]: *Tampa Electric Co. v. Nashville Coal Co.*, 365 U.S. 320, 327
    (1961); *accord United States v. Philadelphia Nat'l Bank*, 374 U.S.
    321, 359 (1963).

[^143]: The relevant geographic market selected for analysis must also
    reflect "the commercial realities of the industry." *See Arthur S.
    Langenderfer, Inc. v. S.E. Johnson Co.*, 917 F.2d 1413, 1421 (6th
    Cir. 1991) (quoting *Brown Shoe Co. v. United States*, 370 U.S. 294,
    336-37 (1962)); *RSR Corp. v. FTC*, 602 F.2d 1317, 1323 (9th Cir.
    1979) (same).

[^144]: Although carriers currently set uniform prices for monthly
    service across large regions or the entire country, nothing prevents
    them from doing otherwise. Without evidence regarding constraints on
    the carriers' ability to set different prices, for example, the cost
    of advertising, we would not rely on their current practices to
    define a geographic market so broadly.

[^145]: By local number, we mean one for which a user does not incur a
    toll-charge for calling from a given location. Although, a non-local
    telephone number does not affect the cost of wireless service of the
    wireless subscriber, because most carriers offer long-distance
    service at no additional charge, having a non-local number does
    affect the cost of landline users calling that subscriber.

[^146]: We assume that, although the hypothetical monopolist is the only
    seller of service in the county, customers can still receive service
    in the county if they purchase their service elsewhere, because
    there are other carriers who serve the county but do not have stores
    there, or because other carriers have roaming agreements with the
    hypothetical monopolist at prices that are not passed on to the
    customer, or because the customer can purchase service from the
    hypothetical monopolist itself in a different county at a lower
    price. As to the last point, we note that wireless carriers do not
    charge their customers different prices for service on different
    portions of their own network.

[^147]: *See* Preferred Communications Petition to Deny at 8.

[^148]: *See* *infra* Section V.A.2.

[^149]: Today, resellers are often referred to as MVNOs. MVNOs are
    distinguished from "traditional" resellers by a variety of factors
    including brand appeal, distribution channels, bundling wireless and
    non-wireless products, and value added services. *See Ninth
    Competition Report*, 19 FCC Rcd at 20614 n.71. We have declined to
    find that a separate product market exists for resell/wholesale
    services. The resale sector accounts for approximately 9 percent of
    all mobile telephony subscribers. *Local Telephone Competition:
    Status as of December 31, 2004*, Federal Communications Commission,
    July 2005, Table 13: Mobile Wireless Telephone Subscribers.

[^150]: *See* Global Com, Iridium Satellite Phone Service Plans, *at*
    http://www.globalcomsatphone.com/satellite/
    services/iridium_service_plans.html (last visited July 27, 2005);
    GlobalStar, Airtime Pricing, Voice Pricing, *at*
    http://www.globalstarusa.com/en/airtime/voicepricing/ (last visited
    July 27, 2005)).

[^151]: Wireless VoIP services are nomadic in the sense that one can use
    them from a number of different locations (for example, by using a
    laptop at different internet cafes all over a town).

[^152]: The number of subscribers for Dobson more than doubled from
    year-end 2002 (approximately 768,000) to year-end 2003
    (approximately 1,552,000). *See Ninth Competition Report*, 19 FCC
    Rcd at 20697, tbl. 4 & n.2. In addition, Dobson has announced launch
    of its Enhanced Date for GSM Evolution ("EDGE") service. *See*
    *Dobson launches EDGE services in 16-state service area*, [RCR
    Wireless News]{.smallcaps}, Oct. 18, 2004, at 22.

[^153]: Other smaller regional carriers, such as Southern LINC Wireless,
    may provide competitive PTT options in certain local markets.

[^154]: *See* Sprint Voice Features website.

[^155]: The approximately 200 MHz of spectrum includes 50 MHz for
    cellular services, 120 MHz for Broadband PCS, *see Ninth Competition
    Report,* 19 FCC Rcd at 20632-3 ¶¶ 86-88, and additional spectrum for
    SMR. *See id*. at 20633-34 ¶ 89 & n.197*.*

[^156]: In *Cingular-AT&T Wireless*, we noted that Advanced Wireless
    Service ("AWS") and Broadband Radio Service ("BRS") spectrum does
    not currently meet our criteria because it is committed to
    non-mobile telephony uses currently and for the near-term future.
    *Cingular-AT&T Wireless Order*, 19 FCC Rcd. at 21561 n. 283.
    Subsequent to the adoption of the *Cingular-AT&T Wireless Order*,
    Congress adopted the Commercial Spectrum Enhancement Act, Public Law
    No. 108-494 (2004), enabling the Commission to announce its intent
    to auction AWS licenses as early as June 2006. FCC to Commence
    Spectrum Auction that Will Provide American Consumers New Wireless
    Broadband Services, News Release (rel. Dec. 29, 2004). Accordingly,
    some portion of the AWS spectrum may well be licensed in the
    near-term future. Nevertheless, given the federal and non-federal
    encumbrance of the 1710-1755 MHz and 2110-2155 MHz bands in many
    markets, we conclude that it is still premature to classify the AWS
    spectrum as suitable for the provision of mobile telephony services
    for purposes of our analysis here. Moreover, we observe that the
    Commission's *Rebanding Orders* will alter the bandwith held by
    Sprint Nextel and which will be made available to the market. This
    will result in less available total bandwith but will provide more
    contiguous spectrum suitable for the provision of advanced mobile
    services. We anticipate that in the future, as more spectrum becomes
    available, technological developments lead to performance advances,
    and allocations are revised, the Commission may from time to time
    need to re-evaluate whether additional spectrum should be viewed as
    suitable for the provision of mobile telephony services.

[^157]: An initial screen is only the beginning of our competitive
    analysis. Subsequent sections examine the other factors in a
    case-by-case analysis of whether there will be potential competitive
    harms in certain geographic markets if the transaction were to be
    approved without conditions.

[^158]: *See Cingular/AT&T Wireless Order*, 19 FCC Rcd at 21564 ¶ 107.

[^159]: We chose initial thresholds of 2800 for the HHI and 100 for the
    change in HHI because a mobile telephony market that does not
    exhibit at least this combined post-merger level of concentration
    will be no more concentrated than at the time the Commission's last
    congressionally mandated review which concluded the market was
    effectively competitive. *See Ninth Competition Report*, 19 FCC Rcd
    at 20600 ¶ 2. Our analysis indicates that the current average HHI in
    markets across the country has increased to slightly over 3100 as a
    result of the Cingular-AT&T Wireless merger. Nevertheless, we have
    maintained an HHI score of 2800 as the trigger for the initial
    screen. A slightly more rigorous review is consistent with the
    analytical purpose of the initial screen -- to eliminate from review
    markets where there is no competitive harm rather than identifying
    markets where competitive harm may exist. Although applying a
    criterion of 250 or greater resulted in the review of markets in
    which the concentration levels are below that of the average market
    today, we chose to apply this criterion to be confident that we
    fully evaluated any market in which the merger may adversely affect
    competition.

[^160]: *Cingular/AT&T Wireless Order*, 19 FCC Rcd at 21564 ¶ 104. CEAs,
    which are defined by the Bureau of Economic Analysis, are composed
    of a single economic node and surrounding counties that are
    economically related to the node. There are 348 CEAs in the 50
    States and the District of Columbia. Of the 3,141 U.S. counties,
    2,267 are non-nodal counties which are assigned to a CEA based first
    on county-to-county commuting flows from the 1990 Census and second
    on locations of the most widely read regional newspapers. Three
    quarters of non-nodal counties were assigned based on commuting
    patterns. *See* Kenneth P. Johnson, *Redefinition of the BEA
    Economic Areas*, [Survey. of Current Business.]{.smallcaps},
    February 1995, at 75-81. In November 2004, the Bureau of Economic
    Analysis updated definitions for CEAs. *See* Kenneth P. Johnson and
    John R. Kort, *2004 Redefinition of the BEA Economic Areas*,
    [Survey. of Current Business.]{.smallcaps}, November 2004, at 68-71.
    Although the total number of CEAs decreased from 348 to 344, we did
    not adopt the new CEA definitions for purposes of this transaction
    and relied on the 348 previously defined CEAs. CMAs are the regions
    originally used by the Commission in issuing licenses for cellular
    service. There are 734 CMAs, made up of 305 Metropolitan Statistical
    Areas ("MSAs"), 428 Rural Service Areas ("RSAs"), and a market for
    the Gulf of Mexico. *See* *Ninth Competition Report*, 19 FCC Rcd at
    20632 ¶ 87. RSAs are regions defined by the Commission for the
    purpose of issuing spectrum licenses. *See* *Ninth Competition
    Report*, 19 FCC Rcd at 20632 ¶ 87.

[^161]: Billing data was submitted by Cingular, Nextel, T-Mobile,
    Sprint, Verizon Wireless, ALLTEL, Western Wireless, and Southern
    Linc Wireless in response to a staff data request. *See*, *supra*,
    at Section II.C.1. These data include information on all service
    plans for which the carrier currently has subscribers, including the
    number of subscribers taking a particular plan, broken down by
    county. From this data set, we calculate the number of subscribers
    per county for each carrier. This data set also can be aggregated up
    to larger geographic areas and can be used to calculate market
    shares for all mobile wireless carriers. Using two sets of data to
    cross-check against each other gives us confidence that any
    shortcomings in either data set will not lead to inappropriate
    analytical conclusions.

[^162]: The CEAs and CMAs are listed in Appendix B.

[^163]: With 130 megahertz of spectrum available to other carriers,
    there could, for instance, be as many as four carriers with at least
    30 megahertz of spectrum for the provision of mobile telephony
    services. Many carriers are competing successfully with far less
    bandwidth today. *See, e.g.*, *Cingular-AT&T Wireless Order*, 19 FCC
    Rcd at 21568-69 & nn.334-35 (discussing services of Verizon Wireless
    and Dobson)

[^164]: *See* Application, Public Interest Statement at 73-74.

[^165]: CRA Analysis at 24-25.

[^166]: *DOJ/FTC Merger Guidelines* § 0.1.

[^167]: *Id*. § 2.1. The *DOJ/FTC Merger Guidelines* define coordinated
    interaction as comprising actions by a group of firms that are
    profitable for each of the firms involved only because the other
    firms react by accommodating these actions rather than by attempting
    to undercut them. *Id.*

[^168]: *Id.* at § 2.11.

[^169]: *Cingular-AT&T* Wireless *Order*, 19 FCC Rcd at 21580-21586 ¶¶
    150-164.

[^170]: Application, Public Interest Statement at 80-83; CRA Analysis at
    47-51 ¶¶ 127-140.

[^171]: Application, Public Interest Statement at 83-86; CRA Analysis at
    51-56 ¶¶ 141-151.

[^172]: *Cingular-AT&T* Wireless *Order*, 19 FCC Rcd at 21580 ¶ 150.

[^173]: CRA Analysis at 48 ¶ 131.

[^174]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21580 ¶150.

[^175]: *DOJ/FTC Merge*r *Guidelines* § 2.11-2.12.

[^176]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21581 ¶154;
    **\[REDACTED\]**

[^177]: CRA Analysis at 49 ¶ 133.

[^178]: *DOJ/FTC Merger Guidelines* § 2.11.

[^179]: CRA Analysis at 49 ¶ 134.

[^180]: *DOJ/FTC* *Merger Guidelines* § 2.12.

[^181]: *See* CRA Analysis at 50 ¶ 137.

[^182]: Cingular*-AT&T Wireless Order*, 19 FCC Rcd at 21584 ¶160.

[^183]: **\[REDACTED\]**

[^184]: Application, Public Interest Statement at 82; CRA Analysis at 49
    ¶ 135.

[^185]: CRA Analysis at 49-50 ¶ 135.

[^186]: CRA Analysis at 49 ¶ 135.

[^187]: Simon Flannery *et. al.*, *3G Economics a Cause for Concern*,
    Morgan Stanley, Equity Research, Feb. 1, 2005, at 11 ("*3G Economics
    a Cause for Concern*"); *Market Analysis -- Wholesale Mobile Access
    and Call Origination*, Document No. 04/118 and 04/118a, Response to
    Consultation & Notification to European Commission, Commission for
    Communications Regulation, Dec. 9, 2004, at 44-45 ("*ComReg Document
    No. 04/118*").

[^188]: Neil Gandal, David Salant, and Leonard Waverman, *Standards in
    Wireless Telephone Networks*, Telecommunications Policy, 2003, at
    329 ("*Standards in Wireless Telephone Networks*").

[^189]: Standards *in Wireless Telephone Networks*, at 330.

[^190]: *3G Economics a Cause for Concern*, at 11. For a general
    discussion of standards wars in network industries, with digital
    wireless technologies cited as a case study, *see* Carl Shapiro &
    Hal R. Varian, INFORMATION RULES, at 261-296 (Harvard Business
    School Press 1999) ("*Information Rules*").

[^191]: *3G Economics a Cause for Concern*, at 10-11; *Information
    Rules*, at 273.

[^192]: *Standards in Wireless Telephone Networks*, at 328; Frank J.
    Governali, *et al*., *Wireless Data Prospects Brightening*, Goldman
    Sachs, Global Investment Research, Apr. 16, 2004, at 6.

[^193]: Terence Sinclair, *et al*., *European Mobile (2) -- Swimming
    with the Sharks: Competitor Review*, Schroeder Salomon Smith Barney,
    Equity Research: Europe, Sept. 10, 2002, at 10 and 15; Timothy Horan
    *et al*., *International Wireless Trends Reinforce Our Bullish View
    On U.S. Wireless*, CIBC World Markets, Equity Research, June 6,
    2005, at 8; *ComReg Document No. 04/118*, at 40-43, 55-59.

[^194]: CRA Analysis at 51-56 ¶¶ 140-151.

[^195]: CRA Analysis at 51 ¶ 141.

[^196]: CRA Analysis at 51-52 ¶ 142.

[^197]: CRA Analysis at 52 ¶ 144.

[^198]: CRA Analysis at 53-55 ¶¶ 145-150.

[^199]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21570 ¶ 115.
    The term "unilateral" refers to the method used by firms to
    determine strategy, not to the fact that the merged entity would be
    the only firm to change its strategy. The term unilateral is used to
    indicate that strategies are determined unilaterally by each of the
    firms in the market and not by explicit or tacit collusion. Other
    firms in the market may find it profitable to alter their behavior
    as a result of the merger-induced change in market structure by, for
    example, repositioning their products, changing capacity, or
    changing their own prices. These reactions may alter the total
    effect on the market and must be taken into account when evaluating
    potential unilateral effects. In the mobile telephony industry,
    changes in behavior may include delays in service quality
    improvements or adverse adjustments to plan features without
    corresponding decreases in plan prices.

[^200]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21570-571 ¶
    117.

[^201]: CRA Analysis at 32-33 ¶ 85.

[^202]: **\[REDACTED\]**

[^203]: We note that we do find that Nextel is somewhat differentiated
    from the other mobile telephony carriers by its PTT service and
    focus on business customers. But we do not find that Sprint and
    Nextel are significantly worse substitutes for one another than they
    are for the other mobile telephony carriers.

[^204]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21570 ¶ 116.

[^205]: There are several service quality dimensions including the
    probability of blocked and dropped calls, and the quality of the
    connection. In addition, customer support is an important dimension
    of service quality. A carrier's coverage includes locations where
    the service is available either on the carrier's own network, or on
    the network of one of its roaming partners. Plan features include
    various dimensions of subscriber usage such as the number of voice
    or data minutes provided by the plan Types of usage are typically
    defined by "buckets" of minutes and are differentiated by the time
    at which a call is placed, the location from which it is placed, and
    the destination to which it is directed. *See Cingular-AT&T Wireless
    Order*, 19 FCC Rcd at 21572-73 ¶¶ 123-126.

[^206]: *Antitrust Law Developments (Fifth)*, ABA Section of Antitrust
    Law at 344 (2002).

[^207]: That is, Sprint's presence in a market may have been a
    constraint on Nextel's prices, and Nextel's presence in a market may
    have been a constraint on Sprint's prices. However, it is not
    necessary for the products to be the next best substitutes for there
    to be competitive harm arising from unilateral effects, although it
    makes the harm more likely. *See* Gregory Werden, *Demand
    Elasticities in Antitrust Analysis*, 66 Antitrust L.J. 408 (1998).

[^208]: CRA Analysis at 33-39 ¶¶ 88-106.

[^209]: **\[REDACTED\]**

[^210]: **\[REDACTED\]**

[^211]: **\[REDACTED\]**

[^212]: *See* *The New Push Behind P2T*, *Wireless Review*, May 1, 2005.

[^213]: **\[REDACTED\]**

[^214]: CRA Filing at 33-39 ¶¶ 88-106. A diversion ratio is the fraction
    of sales lost by carrier A that are captured by carrier B (for
    example, in the event of a price increase by carrier A). If carrier
    A and carrier B are close substitutes, then we would expect that
    many customers would switch to carrier B in the event of a price
    increase by carrier A. The higher the diversion ratio between the
    merging carriers, the greater is the incentive of the merged firm to
    raise price. This is due to the fact that as the diversion ratio
    between the merging parties increases, the amount of sales that
    would be 'recaptured' by the merged firm, in the event of a price
    increase for the products and services of either of the merging
    parties, increases.

[^215]: The exit surveys were conducted on subscribers when they
    switched away from Sprint or Nextel. These customers were asked
    which carrier they were switching to.

[^216]: WLNP was required in the 100 largest markets on November 24,
    2003, and required nationwide on May 24, 2004. The WLNP data include
    each instance of a customer porting a phone number from one mobile
    carrier to another, and indicates both the origin and destination
    carrier. The WLNP data is provided to the Commission by NeuStar,
    Inc.

[^217]: We note that this suggests that on a continuum of product
    characteristics, Cingular Wireless and Verizon Wireless lie between
    Sprint and Nextel.

[^218]: Using WLNP data, we were able to gauge movements of customers
    among the mobile telephony firms, and determine the aggregate
    customers flows between firms for 2004. This analysis was limited to
    markets in which all of the nationwide carriers were serving
    customers. *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21574 ¶
    130.

[^219]: *See Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21574-575 ¶
    131. The Applicants discuss four limitations to the usefulness of
    the WLNP data. First, WLNP data involve all switches, not just those
    that are a response to a price increase. Second, because customers
    often delay switching until their two-year contracts have expired,
    the act of switching may substantially lag the decision to switch.
    Therefore, while it is reasonable to assume that the carrier being
    ported to is the customer's current first choice provider, it may
    not be reasonable to assume that the carrier being ported from is
    any longer the customer's second choice. Third, there are two
    measures of switching, customers that are porting in and those that
    are porting out, and there may be substantial differences between
    the two. Fourth, WLNP data do not identify customers that either
    decrease wireless usage or drop wireless services. See CRA Analysis
    at 35-36 ¶¶ 94-97. In addition, we note that the porting data
    represent a small sample of the population of subscribers. It is not
    clear whether this sample of the population would be representative
    of the population as a whole. If the population of subscribers who
    port their numbers have different preferences on average than the
    population of subscribers who would likely switch carriers in the
    event of an adverse change to either Sprint or Nextel's service
    offerings (*e.g.*, a decrease in service quality), then the porting
    data would result in misleading estimates of diversion ratios. In
    addition, any price change or decrease in the numbers of minutes
    offered by a combined Sprint Nextel would likely affect customers
    who are not currently customers of either Sprint or Nextel. Current
    customers would not be affected as much by price changes (although
    they would be affected by service quality changes), especially those
    who are currently on contract. When carriers change their prices,
    they don't generally change prices for current customers who do not
    choose to switch plans, although we realize that may not be the case
    in the future.

[^220]: The surveys are conducted over a sample of all customers who
    leave either Sprint or Nextel, and are not restricted to customers
    who port their numbers. In addition, the customers who leave for
    price reasons are more likely to be relatively satisfied with their
    current service, and are more likely to be reacting to price
    decreases or promotions by other carriers. In most cases, the
    customers who switch would not be reacting to price increases by
    their current carrier, as carriers generally do not increase price
    for current customers, and definitely would not increase price for
    customers who are on contract. Therefore, the main harm of a price
    increase by Sprint or Nextel may be to customers who are not
    currently Sprint or Nextel customers. Thus, the survey data would be
    useful to predict the risk of adverse unilateral effects only if the
    population leaving Sprint or Nextel for price reasons have the same
    distribution of preferences on average as the populations of
    customers who do not currently subscribe to a mobile plan, who
    subscribe to one of Sprint or Nextel's rivals and are considering
    switching, or current Sprint or Nextel customers who would like to
    switch to another plan or purchase a new phone while remaining with
    the same carrier.

[^221]: *See* Cingular Individual Rate Plans, *at*
    http://onlinestorez.cingular.com/cell-phone-service/wireless-phone-plans/cell-phone-plans.jsp?source=INC230064
    (last visited July 28, 2005); Nextel Individual Rate Plans, *at*
    http://nextelonline.nextel.com/NASApp/onlinestore/en/Action/DisplayPlans?id4=left_nav;rateplans
    (last visited July 28, 2005); T-Mobile Individual Rate Plans, *at*
    http://www.t-mobile.com/plans/Default.asp?tab=national; Sprint PCS
    Individual Rate Plans, *at*
    http://www1.sprintpcs.com/explore/servicePlansOptionsV2/FreeClearFairFlexiblePlans.jsp?FOLDER%3C%3Efolder_id=1661521&CURRENT_USER%3C%3EATR_SCID=ECOMM&CURRENT_USER%3C%3EATR_PCode=None&CURRENT_USER%3C%3EATR_cartState=group&bmUID=1122581488597
    (last visited July 28, 2005).

[^222]: *See* Application Transferring Control of Licenses Held by WWC
    Holding Co., Inc. to Widgeon Acquisition LLC, File No. 0002016468
    (filed Jan. 24, 2005) ("Application").

[^223]: *See* *ALLTEL-Western Wireless Order*, 2005 WL 1693557 ¶ 11.

[^224]: Bear Stearns, Equity Research, *U.S. Wireless Services*, June
    2005, p. 60. The contract goes through 2010.

[^225]: SAFE Petition to Deny, Affadavit of John Komorowski, at 5.

[^226]: **\[REDACTED\]**

[^227]: Nextel offers its Direct Connect service for \$0.10 per minute,
    while ALLTEL offers Touch2Talk at \$15 per month national unlimited,
    Sprint offers Ready Link at \$10 per month, and Verizon Wireless
    offers One-to-One Push to Talk at \$1.99 per month. Wireless Review,
    *The new push behind P2T*, May 1, 2005.

[^228]: It appears that Sprint offers a slightly closer substitute for
    Nextel's PTT service than Verizon Wireless.

[^229]: **\[REDACTED\]**

[^230]: **\[REDACTED\]**

[^231]: *See* US Cellular SpeedTalk website, *at*
    http://mrtmag.com/news/intheworks/us_cellular_adds_walkie-talkie_service/
    (last visited July 27, 2005); USCC Comments at 11(commenting that
    its push-to-talk capability was being developed with rollout
    anticipated in 2005).

[^232]: Wireless Week, *Battling PTT's Lackluster Performance. Limited
    handset models, performance issues and Nextel's competitor fervor
    have kept alternative PTT offerings from living up to expectations*,
    Vol. 11; Issue 7, March 15, 2005.

[^233]: *See* <http://rcrnews.com/news.cms?newsId=23023> (accessed June
    16, 2005). In addition, the Open Mobile Alliance held an event in
    June 2005 in which executives from Cingular participated in a panel
    discussion on the importance of PoC standardization and their
    commitment to the new spec. *See OMA announces PoC 1.0 spec*,
    Telephony Online, June 14, 2005. The PoC standard supports
    one-to-one and one-to-many PoC sessions and will eventually allow
    interoperability between PTT services provided by different network
    operators. *Id.*

[^234]: *DOJ/FTC Merger Guidelines § 2.212.* We note that capacity is
    relevant in both differentiated products markets and homogeneous
    products markets. In the case of differentiated products markets,
    the firms must not only have the capacity to serve new customers,
    but must also have the incentive and ability to reposition its
    product lines in response to a price increase by the merged firm.

[^235]: Adequate spectrum is a necessary, but not sufficient, condition
    for the mitigation of potential harm from unilateral effects.

[^236]: One recent example of repositioning is the evolution of Nextel,
    moving from a firm solely focused on business workgroup customers,
    to advertising for (post-paid) residential customers, to launching a
    pre-paid service, to its current sponsorship of NASCAR.

[^237]: For example, 10 percent of Sprint and Nextel's combined national
    subscriber base as of the first quarter of 2005 is only about 21
    percent of the total 2004 net adds for carriers other than Sprint
    and Nextel. In addition, Verizon Wireless, Cingular Wireless, and
    T-Mobile individually had more net adds in 2004 than 10 percent of
    Sprint and Nextel's combined national subscriber base as of the
    first quarter of 2005. Glen Campbell et al., *Global Wireless Matrix
    1Q05*, Merrill Lynch, Global Securities Research and Economics
    Group, June 27, 2005, at 148-149. Further, the amount of advertising
    expenditures for the five nationwide operators indicates that all of
    the carriers are vigorously attempting to increase their subscriber
    base. Therefore, in general carriers are likely to have capacity to
    absorb additional subscribers. The five nationwide carriers spent a
    total of \$3.9 billion on advertising in 2004, up 9 percent from
    2003, and up 24 percent from 2002. *See* Simon Flannery, et al.,
    *Wireless Carrier Advertising Remains Intense*, Morgan Stanley,
    Equity Research, May 18, 2005, at 2.

[^238]: CRA Analysis at 42-47 ¶¶ 113-126; *see also Cingular-AT&T
    Wireless Order*, 19 FCC Rcd at 21584 ¶¶ 95-112.

[^239]: We also examine these seven BTAs as part of our market-specific
    review in Appendix C.

[^240]: None of the petitions to deny or comments challenged this study.

[^241]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd. at 21584 ¶ 136.

[^242]: *Id*.

[^243]: Although the relevant markets in this instance may differ from
    the markets analyzed in the Cingular-AT&T Wireless Order, we believe
    that the results provide some evidence supporting the conclusion
    that Sprint's and Nextel's rivals may have the capacity to absorb
    subscribers.

[^244]: Sprint and Nextel will have more than 60 MHz in only one market,
    and in most markets they will hold well below that amount. CRA
    Filing, at 28. Sprint and Nextel will have 67.5 MHz of spectrum in
    Honolulu, HI.

[^245]: *See supra* Section V.B.2.b.ii.

[^246]: Marginal costs that will potentially be reduced include costs
    for backhaul traffic, costs for IT, billing, customer care, sales,
    marketing costs, and roaming expenses.

[^247]: Carlton, Dennis W. and Jeffrey M. Perloff, *Modern Industrial
    Organization,* third edition*,* 2000*,* p.29*.*

[^248]: *See Merger Guidelines § 4.*

[^249]: These cost reductions are discussed in depth in the Public
    Interest Benefits section. *See infra* Section V.A.7.

[^250]: We do not find here that any hypothetical five to four
    consolidation would be competitively innocuous. Rather, we find this
    is so only for the actual situations that arise as a result of this
    transaction, based on our review of the other relevant circumstances
    such as the merged entity's market share.

[^251]: Letter from Michael K. Powell, Chairman, FCC to Michael D.
    Gallagher, Assistant Secretary for Communications and Information,
    U.S. Department of Commerce, dated December 29, 2004.

[^252]: **\[REDACTED\]**

[^253]: Sprint and Nextel Joint Opposition to Petition to Deny and Reply
    to Comments at 9.

[^254]: *Id*.

[^255]: They also contend that the proposed merger will benefit industry
    and customers through greater technological innovation. Nex-Tech
    Wireless Comments at 1, 2; Pioneer Comments at 1; United Wireless
    Corporation Comments at 1.

[^256]: New Jersey Division of the Ratepayer Advocate filed a pleading
    entitled "Petition to Deny" in which it argues that the proposed
    merger poses significant adverse effects upon all wireless services
    customers. Ratepayer Advocate Petition to Deny at 2. In its Reply to
    Sprint and Nextel's Joint Opposition to the Petitions to Deny, New
    Jersey Division of the Ratepayer Advocate further contends that the
    merged entity will have the market power to refuse to enter into
    roaming agreements with small carriers. Ratepayer Advocate Reply at
    4. Therefore, it urges the Commission to condition approval of the
    merger on Sprint and Nextel fully explaining their plans for
    developing roaming agreements with fair and reasonable rates and
    conditions. *Id*. at 4. As an initial matter, New Jersey Division of
    the Ratepayer Advocate has not complied with the statutory
    requirements for the filing of a petition to deny because it has not
    attached an affidavit as required under Section 309(d) of the
    Communications Act. *See* 47 U.S.C. 309(d)(1). In any event, to the
    extent the New Jersey Division of the Ratepayer Advocate's filing
    can be considered a petition to deny, we reject it as not raising
    substantial and material questions of fact for the reasons set forth
    in this section on roaming. NY3G Partnership, an MMDS licensee,
    filed a petition to deny in which it contends that, if the
    Commission otherwise finds the proposed merger in the public
    interest, then the Commission should impose conditions on the merged
    entity that would require the merged entity to engage in good faith
    negotiations towards entering into automatic roaming agreements with
    other BRS/EBS providers. NY3G Partnership Comments at 3. We address
    NY3G's petition *infra* Section V.B.1.a.

[^257]: USCC and Rural Cellular Association ("RCA") urge the Commission
    to use this merger review proceeding to adopt policies requiring
    large nationwide carriers to enter into reasonable, reciprocal,
    roaming agreements with small, mid-size, regional carriers. USCC
    Comments at 1, 2, 5; RCA Comments at 2-5. They also argue that a
    policy is needed to support interoperability between the networks of
    national and regional carriers for data-based services including
    Push-To-Talk. USCC Comments at 11-12.

[^258]: SouthernLINC Wireless Reply Comments at 1, 6, 8.

[^259]: Joint Opposition at 11-12.

[^260]: USCC Comments at 1, 2, 5; RCA Comments at 2-5.

[^261]: RCA Comments at 3-4; USCC Comments at 2.

[^262]: *See* 47 C.F.R. § 20.12; *see also* *ALLTEL-Western Wireless*
    Order, 2005 WL 1693557 ¶ 108; *Cingular-AT&T Wireless Order*, 19 FCC
    Rcd at 21592 ¶ 182.

[^263]: 47 U.S.C. § 208. *See also* *Cingular-AT&T Wireless Order*, 19
    FCC Rcd at 21592 ¶ 182.

[^264]: *See ALLTEL-Western Wireless Order,* 2005 WL 1693557, ¶¶
    108-109.

[^265]: *See EchoStar-DirecTV Order*, 17 FCC Rcd at 20630 ¶ 188;
    Applications of NYNEX Corporation, Transferor, and Bell Atlantic
    Corporation, Transferee, for Consent to Transfer Control, 12 FCC Rcd
    19885, 20063 ¶ 158 (1997) ("*Bell Atlantic-NYNEX Order*"); *see
    also* *DOJ/FTC Merger Guidelines* § 4.

[^266]: *See, e.g.*, *EchoStar-DirecTV Order*, 17 FCC Rcd at 20630 ¶
    188; *see also* *Bell Atlantic-NYNEX Order*, 12 FCC Rcd at 20063 ¶
    157; Applications of Ameritech Corp., Transferor, and SBC
    Communications Inc., Transferee, For Consent to Transfer of Control,
    *Memorandum Opinion and Order*, 14 FCC Rcd 14712, 14825 ¶ 256 (1999)
    ("*SBC-Ameritech Order*").

[^267]: *Bell Atlantic-GTE Order*, 15 FCC Rcd at 14130 ¶ 209;
    *SBC/Ameritech Order*, 14 FCC Rcd at 14825 ¶ 255; *WorldCom/MCI
    Order*, 13 FCC Rcd at 18134-35 ¶ 194.

[^268]: The Applicants claim that the proposed merger will result in
    total net synergies of approximately \$12.1 billion on an after tax,
    net present value basis. Application, Public Interest Statement at
    32. **\[REDACTED\]**

[^269]: *EchoStar-DirecTV Order*, 17 FCC Rcd at 20630 ¶ 189; *see also*
    *Bell Atlantic-NYNEX Order*, 12 FCC Rcd. at 20063 ¶ 158
    ("Pro-competitive efficiencies include only those efficiencies that
    are merger-specific, *i.e.*, that would not be achievable but for
    the proposed merger. Efficiencies that can be achieved through means
    less harmful to competition than the proposed merger . . . cannot be
    considered to be true pro-competitive benefits of the merger.");
    *SBC-Ameritech Order*, 14 FCC Rcd at 14825 ¶ 255 ("Public interest
    benefits also include any cost saving efficiencies arising from the
    merger if such efficiencies are achievable only as a result of the
    merger \...."); *Comcast-AT&T Order*, 17 FCC Rcd. 23246, 23313 ¶ 173
    (Commission considers whether benefits are "merger-specific"). *Cf.*
    *DOJ/FTC Merger Guidelines* § 4.

[^270]: *EchoStar-DirecTV Order*, 17 FCC Rcd at 20630 ¶ 190; *see also*
    *Bell Atlantic-NYNEX Order*, 12 FCC Rcd. at 20063 ¶ 157 ("These
    pro-competitive benefits include any efficiencies arising from the
    transaction if such efficiencies \... are sufficiently likely and
    verifiable \...."); *AT&T-Comcast Order*, 17 FCC Rcd at 23313 ¶ 173
    (Commission considers whether benefits are "verifiable");
    *SBC-Ameritech Order*, 14 FCC Rcd at 14825 ¶ 255; *DOJ/FTC Merger
    Guidelines* § 4 ("\[T\]he merging firms must substantiate efficiency
    claims so that the Agency can verify by reasonable means the
    likelihood and magnitude of each asserted efficiency, how and when
    each would be achieved (and any costs of doing so), \[and\] how each
    would enhance the merged firm\'s ability to compete \....").

[^271]: *EchoStar-DirecTV Order*, 17 FCC Rcd at 20630 ¶ 190.

[^272]: *Id.*

[^273]: *Id.*; *see also* *DOJ/FTC Merger Guidelines* § 4.

[^274]: *See* *EchoStar-DirecTV Order*, 17 FCC Rcd. at 20630 ¶ 191; *see
    also* *DOJ/FTC Merger Guidelines* § 4.

[^275]: Application, Public Interest Statement at 7.

[^276]: *Id.* at 7, 39.

[^277]: *Id.* at 34.

[^278]: *Id.* at 7.

[^279]: *Id.* at 35.

[^280]: *Id.* at 28-31.

[^281]: Nextel reports that more than one-third of the former customers
    that it surveyed indicated that they dropped Nextel service because
    of network performance issues, including dropped calls, coverage
    holes, in-building coverage, system outages, and lack of expanded
    coverage. Similarly, Sprint reports that approximately 36 percent of
    the former customers it surveyed cited network performance as a main
    reason for seeking an alternative service provider. CRA Analysis at
    11 ¶ 27.

[^282]: Public Interest Statement at 6 and 37. Valente and West Decl. at
    ¶¶ 34-36, 52, and 53. **\[REDACTED\]**

[^283]: *Id*.

[^284]: Valente and West Decl. at ¶¶ 35-36. Of the 43,000 cell sites,
    Sprint now holds 24,000 and Nextel holds 19,700. *Id.*

[^285]: **\[REDACTED\]**

[^286]: **\[REDACTED\]**

[^287]: Valente and West Decl. at ¶ 52.

[^288]: Application, Public Interest Statement at 26-27. Specifically,
    in June 2004, Sprint announced adoption of CDMA 1xEV-DO as a 3G
    platform to enhance PCS Vision networks' data rate and capacity.
    Sprint represents that it will make the service available to 129
    million people in 39 major markets this year. *Id.*

[^289]: *Id.*

[^290]: *Id.*

[^291]: *Id.*

[^292]: *Id.* Sprint also states that the 1x EV-DO Revision A wireless
    modem card provides (downlink) data rates of 300 to 500 kbps with
    peak data bursts of up to 2450 kbps. In contrast, the 1xRTT network
    provides an average data rate of 50 to 70 kbps with peak bursts of
    144 kbps. *See* Valente and West Decl. Attachment 1 at ¶ 9.

[^293]: Valente and West Decl. at ¶¶ 8, 33.

[^294]: Valente and West Decl. at ¶ 45. Nextel has begun a dual-mode,
    iDEN and CDMA, phone development effort. **\[REDACTED\]**

[^295]: Application, Public Interest Statement at 25. Nextel states that
    it has developed an IP gateway that will facilitate interoperability
    between iDEN and other PTT technologies. *See* Valente and West
    Decl. Attachment 2 at ¶ 11.

[^296]: Nextel expects that the greatest challenge will be to support
    dual-mode handsets due to implementation differences between GSM and
    CDMA networks. **\[REDACTED\]**

[^297]: Application, Public Interest Statement at 37-38. *See also*
    Valente and West Decl. at ¶¶ 7, 35-36, and 52.

[^298]: *Id*.; CRA Analysis at 10-12 ¶¶ 26, 28-30. Montagner and Neilsen
    Decl. at ¶¶ 3, 5, 7, 12, and 19. **\[REDACTED\]**

[^299]: Application, Public Interest Statement at 41. Note that Sprint's
    wireline network includes the Sprint-owned long-distance network and
    metropolitan area networks in 30 markets across the U.S. *Id*.

[^300]: *Id*.

[^301]: CRA Analysis at 15-16 ¶¶ 39, 40. Montagner and Neilsen Decl. at
    ¶¶ 3, 5, 18 and 21. **\[REDACTED\]**

[^302]: Application, Public Interest Statement at 36.

[^303]: *Id.* at 34-35.

[^304]: *Id.* at 35.

[^305]: *Id.* at 34-35.

[^306]: *Id.* at 36.

[^307]: The mass market consists of residential customers and very small
    business customers. *See, e.g.,* Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers*, Report
    and Order and Order on Remand*, 18 FCC Rcd 16978, 17063 ¶ 127
    (2003); *Bell Atlantic-GTE Order*, 15 FCC Rcd at 14088-89 ¶ 102;
    *WorldCom-MCI Order*, 13 FCC Rcd at 18040-41 ¶¶ 25-26.

[^308]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21611 ¶¶ 237-242
    (citing prior orders).

[^309]: *Id.* at 21619 ¶ 250.

[^310]: We use the term independent wireless carrier to mean a wireless
    carrier that is not owned or controlled by an incumbent LEC, or, if
    owned or controlled by an incumbent LEC, one that has wireline
    operations significantly smaller than its wireless business. *Id.*
    at 21612 ¶ 237 & n.556.

[^311]: The Commission considered Sprint as an independent wireless
    carrier given the small size of its wireline operations relative to
    its wireless operations. *See id.* We note also, as stated above,
    that Sprint has expressed its intention to spin off its ILEC
    business to its shareholders sometime after the closing of the
    proposed merger. *See supra* Section II.B.

[^312]: *Id*. at 21615 ¶ 243 ("Thus, unlike Cingular whose strategies
    are influenced by SBC's and BellSouth's concerns about wireline
    revenues and access lines, AT&T Wireless is not likely to be
    concerned with the impact of its strategies on wireline revenues or
    access lines, except to the extent that they represent a potential
    source of new wireless customers.").

[^313]: Nextel Response to FCC Information Request No. 1 at 1 (*e.g*.,
    Nextel's Campus Unlimited Program, which permits customers to
    receive unlimited cellular service within a "virtual" calling area
    covering a corporate or institutional campus, and Nextel's testing
    of advanced broadband services which will lead a substantial portion
    of Nextel's customers to cancel their DSL subscription); Nextel
    Response to FCC Information Request No. 3 (*e.g*., first wireless
    carrier to offer free incoming minutes); Sprint Response to FCC
    Information Request No. 3 (*e.g*., first carrier to offer E911 Phase
    II services with a handset-based location technology, first carrier
    to offer unlimited Nights and Weekends to wireless customers, and
    offering of Fair and Flexible pricing plans to reduce overage
    charges).

[^314]: **\[REDACTED\]**

[^315]: **\[REDACTED\]** *See also* Application for Authority to
    Transfer Control of Licenses and Authorization Held by AT&T Wireless
    Services, Inc. to Cingular Wireless Corporation, Attach. Decl. of
    Richard Gilbert, Tables A-1-A-3.

[^316]: *See* s*upra* Section V.A.7.(iii).

[^317]: *Id. See also* CRA Analysis at 5-10 ¶¶ 13-25; Montagner and
    Nielsen Joint Decl. at ¶¶ 8-12.

[^318]: *See also* CRA Analysis at 10-16 ¶¶ 26-40; Valente and West
    Joint Decl. at ¶¶ 11-13 **\[REDACTED\]**

[^319]: Although NENA supports the proposed merger, noting that Sprint
    and Nextel have demonstrated a commitment to making E911 services
    available throughout the nation, it does not elaborate on its
    reasons for believing that the capabilities of each company to
    implement and improve E911 services will be strengthened by the
    merger, nor does it predict that such enhanced capabilities would
    necessarily result in faster or more widespread deployment of E911
    service than would otherwise be the case. *See* Letter dated May 4,
    2005, from Bill McMurray, ENP, President, NENA, to Marlene Dortch,
    Secretary, FCC. While we attach significant weight to NENA's views
    on this subject by virtue of its critical and unique role in E911
    deployment efforts, we believe, as discussed *infra*, that the
    overall record does not support a positive appraisal of the merger's
    effect on E911 deployment. On the other hand, we do not believe that
    the record raises such significant concerns that the proposed merger
    may hinder or retard E911 implementation efforts that would warrant
    adoption of any special E911-related conditions. *See* SAFE
    Competition Coalition Petition to Deny at 10; New Jersey Division of
    the Ratepayer Advocate Reply at 7. The Commission retains ample
    enforcement sanctions at its disposal if Sprint Nextel fails to meet
    its E911 obligations.

[^320]: With respect to CALEA obligations, the Applicants state that
    their ongoing compliance efforts will continue unabated, but do not
    claim that the merger will further their efforts in that area. *See,
    e.g.*, Application, Public Interest Statement at 61 n.156
    (indicating that the proposed merger "*may* further the applicants'
    efforts to meet their CALEA obligations) (emphasis added);
    **\[REDACTED\]**

[^321]: The Applicants have stated their intent to have Sprint Nextel
    step into the shoes of Nextel with respect to its 800 MHz re-banding
    commitments. Application, Public Interest Statement at 61-63. This
    merely reaffirms commitments that Nextel has already made and would
    be obligated to meet in the absence of the merger. Therefore, while
    we regard the Applicants' commitment as vitally important to
    fulfillment of the objectives of the 800 MHz proceeding, we do not
    regard it as a merger-specific benefit. *See* Improving Public
    Safety Communications in the 800 MHz Band, WT Docket 02-55, *Report
    and Order, Fifth Report and Order, Fourth Memorandum Opinion and
    Order*, 19 FCC Rcd 14969, 15128-15129 ¶ 342 (2004) ("*800 MHz Report
    and Order*") and Improving Public Safety Communications in the 800
    MHz Band, WT Docket 02-55, *Supplemental Order and Order on
    Reconsideration*, 19 FCC Rcd 25120 (2004) ("*Supplemental Order*").

[^322]: The Applicants represent that the merger would enhance network
    diversity and redundancy, and hence network reliability. *See,
    e.g*., Application, Public Interest Statement at 60. We discount the
    significance of this factor for the same reason we did so in the
    Cingular-AT&T Wireless Order. *See Cingular-AT&T Wireless Order*, 19
    FCC Rcd at 21609 ¶ 229 (observing that "any benefits for homeland
    security and public safety will not be realized overnight -- they
    depend on the successful integration of the two existing networks,
    with all of the difficulties entailed in that effort ....").

[^323]: Letter from Larry Krevor, Sr. Vice President -- Regulatory
    Affairs, Nextel to Marlene H. Dortch, Secretary, Federal
    Communications Commission (July 26, 2005) (Nextel has committed to
    file, no later than September 30, 2005, a request for a waiver of
    the December 31, 2007, deadline).

[^324]: 47 C.F.R. 20.18.

[^325]: As noted above, the term 2.5 GHz band includes the 2150-2162 MHz
    band as well as the 2500-2690 MHz band. *See* note 3 *supra*.

[^326]: *See BRS/EBS NPRM,* 19 FCC Rcd at 6722.

[^327]: Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's
    Rules to Facilitate the Provision of Fixed and Mobile Broadband
    Access, Educational and Other Advanced Services in the 2150-2162 and
    2500-2690 MHz Bands, *et al.*; *Report and Order and Further Notice
    of Proposed Rulemaking*, 19 FCC Rcd 14165 (2004), *modified*, 19 FCC
    Rcd 22284 (2004) *(BRS/EBS R&O & FNPRM* as appropriate).

[^328]: *BRS/EBS R&O*, 19 FCC Rcd at 14184 ¶ 38.

[^329]: *Id.* at 14194-14208 ¶¶ 68-103. Under the timeline adopted by
    the Commission, the transition should be completed by October 2009,
    although it may be longer in some cases if dispute resolution
    procedures are used. Also, some areas of the country will not be
    transitioned according to the transition rules adopted by the
    Commission in the *BRS/EBS R&O*. The Commission has sought comment
    in the *BRS/EBS FNPRM* on what to do in markets that do not
    transition pursuant to the rules it adopted. *Id.* at 14265 ¶ 265.
    The Commission is currently reviewing petitions for reconsideration
    or clarification and comments on the *BRS/EBS R&O*.

[^330]: We also note that his transaction also involves 13 Cable
    Television Relay Services (CARS) licenses.  CARS is an auxiliary
    service principally limited to the transmission of video signals.^?^
    The licenses are held by Nextel in support of wireless cable
    operations of the former MMDS licenses.  The principal uses of these
    licenses must continue to be video operations and, should that
    operation cease, the licenses must be surrendered.  These licenses,
    therefore, have no impact on our analysis.

[^331]: Application, Public Interest Statement, at 47.

[^332]: Application, Public Interest Statement at 42. Applicants also
    state that they plan to use their spectrum in the 2.5 GHz band to
    provide high-bandwidth backhaul connections. Applicants Reply at 21,
    n.63.

[^333]: Rowley/Finch Decl. at 3.

[^334]: Application, Public Interest Statement at 52.

[^335]: CFA/CU Reply at 6. We are not convinced that all of the
    Petitioners have adequately demonstrated that they have standing.
    *See* *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21522 n. 196.
    For example, the declaration submitted by CFA/CU in support of its
    standing is deficient because the declarant failed to make any
    specific claims regarding his current ownership or use of a wireless
    phone that would demonstrate that he would be directly affected by
    the order. *See* CFA/CU Reply at 8, Declaration of Mark Cooper;
    *Compare* *Consumer Federation of America v. FCC*, 348 F.3d 1009,
    1012 (D.C. Cir. 2003). However, we need not decide the standing
    issue because we do not, in any case, find petitioners' arguments
    for denial of the applications persuasive. In addition, even absent
    standing, we still have discretion to consider their pleadings as
    informal objections. S*ee Nextel License Holdings 4, Inc.*, 17 FCC
    Rcd 7028, 7033 ¶ 16 (2002). We also note Applicants' argument that
    petitioners did not include proof of service. Joint Opposition to
    Petitions at 6, n.14.

[^336]: For a detailed discussion of the history of the 2500-2690 MHz
    band, see Amendment of Parts 1, 21, 73, 74 and 101 of the
    Commission's Rules to Facilitate the Provision of Fixed and Mobile
    Broadband Access, Educational and Other Advanced Services in the
    2150-2162 and 2500-2690 MHz Bands, et al.; *Notice of Proposed
    Rulemaking*, 19 FCC Rcd 6722, 6726-44 (2003) (*BRS/EBS NPRM).*

[^337]: *See supra* Section V.A.

[^338]: *Cingular-AT&T Wireless Order*, 19 FCC Rcd at 21560 ¶ 81. CFA/CU
    argues that the merger could affect the pricing of or demand for
    voice services, and we must therefore consider concentration of
    cellular, PCS, SMR and other spectrum suitable for mobile telephony,
    in assessing the impact of the merger. CFA/CU Petition at 8-9.
    Preferred asserts that the Commission's view of 2.5 GHz spectrum in
    the Cingular-ATT Wireless merger must be changed here to reflect
    that it can and may be used to provide mobile telephony services.
    Preferred Pet. at 11. We note that the *BRS/EBS R&O* which
    designated the band to permit mobile service, which includes CMRS
    service, was released on July 29, 2004, before the *Cingular-AT&T
    Wireless Order* which was released on January 10, 2005. *See*
    *BRS/EBS R&O*, 19 FCC Rcd at 14165; *Cingular-AT&T Wireless Order*,
    19 FCC Rcd at 21522. We continue to believe that, in light of the
    nascency of interconnected services in the 2.5 GHz band and the
    challenges associated with providing such services in this band, it
    remains premature, and imprudent at such an early juncture in the
    transition of the band, to consider spectrum in the 2.5 GHz band for
    the purposes of voice service. Significantly, less than four months
    passed between the release of the *BRS Report and Order* and the
    filing of the instant merger application. We see little evidence in
    the mobile market of a shift from the market environment that
    existed at the time of our decision in the *Cingular-AT&T Wireless*
    proceeding. Applicants maintain that the technical and operational
    characteristics of the 2.5 GHz band, including the spectrum
    isolation of the band, the lack of equipment or standards, and the
    band's inferior propagation characteristics, make it currently
    ill-suited for providing voice services. Joint Opposition to
    Petitions at 30. The record supports our view that BRS is more
    likely to be one of many inputs into a mobile market for data or
    broadband access that may have some characteristics of traditional
    voice service applications. *See* CFA/CU Reply at 4.

[^339]: It is not entirely clear that NY3G Partnership has filed a
    petition to deny. *See* NY3G Petition to Deny. As an initial matter,
    NY3G Partnership has not complied with the statutory requirements
    for the filing of a petition to deny because it has not attached an
    affidavit as required under Section 309(d) of the Communications
    Act. See 47 U.S.C. 309(d). Also, NY3G Partnership argues that, if
    the Commission otherwise finds the proposed merger is in the public
    interest, the Commission should impose roaming conditions. NY3G
    Petition to Deny at 4. It does not appear to argue that the proposed
    merger should be denied because it will lead to anticompetitive
    effects with respect to roaming. *Id*. at 4-8. In any event, to the
    extent NY3G Partnership's filing can be considered a petition to
    deny, we reject it as not raising substantial and material questions
    of fact for the reasons set forth in this Section.

[^340]: Mobile data service is considered to be the delivery of
    non-voice information to a mobile device. Two-way mobile data
    services include the ability not only to receive non-voice
    information on an end-user device, but also to send it from an
    end-user device to another mobile or landline device using wireless
    technology. Data services available today include, but are not
    limited to, short messaging service, email, and access to the
    internet. *See Ninth Competition Report*, 19 FCC Rcd at 20612 ¶ 33.

[^341]: We believe this issue is properly considered in the context of
    the mobile data services market because most of the parties'
    discussions refer to mobile services. To the extent the parties
    argue that the Applicants will hold too much spectrum independent of
    the product market, we summarily reject that argument. There is no
    spectrum cap applicable to BRS, and it is impossible to make a
    finding of competitive harm without reference to a product market.

[^342]: CTCNet Pet. at 4, 7; CU/CFA Pet. at 8; NRTC at 1-3; NY3G Reply
    at 3-4. More specifically, CTCNet contends that the Applicants would
    be in a position to use their market power to effectively deny any
    competitor access to any significant amount of the 2.5 GHz spectrum
    in 62 percent of the top 50 markets and any access whatsoever in
    seven of those markets. CTCNet Pet. at 15-16; *see also* CFA/CU Pet.
    at 8; NY3G Reply at 3. CTCNet and NY3G argue that the merger would
    create a dominant carrier with a national footprint in the 2.5 GHz
    band, which will wield disproportionate market power due to the
    mobile nature of BRS and customer demand for services with
    nationwide interoperability. CTCNet Pet. at 18; NY3G Pet. at 3.

[^343]: CTCNet at 14-15; CTCNet Reply at 31-35.

[^344]: CFA/CU at 8; Preferred Petition at 14.

[^345]: CTCNet Reply at 4-7; NY3G Reply at 13-14.

[^346]: CFA/CU Pet. at 11; CTCNet at 21; CTCNet Reply at 37; NY3G at
    8-9; Preferred Petition at 15-16. NY3G maintains that the asserted
    benefits of the proposed merger, absent conditions, do not outweigh
    the significant harms. NY3G Reply at 16.

[^347]: CTCNet Pet. at 21; CFA/CU Pet. at 6, 11-12; NY3G Pet. at 8-9.

[^348]: NY3G Reply at 7-8; United States Cellular Corporation (USCC) at
    4; Southern LINC at 2.

[^349]: NY3G Pet. at 6.

[^350]: The ITFS/2.5 GHz Mobile Wireless Engineering & Development
    Alliance, Inc. (IMWED) also seeks conditions on the combined entity.
    IMWED asserts that it should not be able to hold EBS leases for
    longer than fifteen years and should be barred from having the
    option to purchase the EBS frequencies in the event that FCC rules
    are amended to allow such commercial purchases of EBS licenses.
    IMWED Comments at 6-7. In addition, IMWED argues that EBS licensees
    should have to file unredacted copies of leases they sign with
    Sprint-Nextel and any other commercial entities. *Id*. at 7. We note
    that IMWED has raised these arguments in a Petition for
    Reconsideration of the *BRS/EBS Order*, and argues that these
    conditions should apply to all EBS leases. *See* IMWED Petition for
    Reconsideration of the BRS/EBS Order at 9-10. We believe these
    arguments, which have an impact on all EBS leases and licensees, are
    more appropriately addressed in the context of the pending BRS/EBS
    proceeding and we will accordingly rule on those issues in the
    upcoming BRS/EBS Second Report and Order and Order on
    Reconsideration. Similarly, Community Technology Centers Network
    (CTCNet) has filed a Petition for Reconsideration regarding the
    assignment of a BRS license from Champion to Nextel Spectrum
    Acquisition Corp., a subsidiary of Nextel.  The Petition was filed
    under both the file for that assignment (File No. 9650667) and in
    the instant merger proceeding.  Additionally, CTCNet has filed a
    Consolidated Petition to deny an assignment that includes BRS
    authorizations from Digital and Wireless Television, LLC (DWT), to a
    subsidiary of Sprint.  This petition was filed both with respect to
    the assignment by DWT, and in the instant merger proceeding. Because
    we believe the referenced Petitions are more appropriately dealt
    with in the context of the actual assignment proceedings, we will
    not rule on such Petitions in this proceeding, and will instead rule
    on those Petitions in the respective assignment proceedings.

[^351]: In the pre-transition band plan, BRS spectrum is located at
    2150-2160 (2162 in certain markets) MHz and 2500-2690 MHz. *See* 47
    C.F.R. § 27.5(i)(1).

[^352]: Joint Opposition to Petitions at 25.

[^353]: *Id*. at 23.

[^354]: *Id*. at 23-4.

[^355]: *Id*. at 24.

[^356]: NY3G Reply 8-10.

[^357]: CTCNet Reply at 31-35; NY3G Reply at 6-11.

[^358]: *BRS/EBS R&O*, 19 FCC Rcd at 14165 ¶ 1.

[^359]: *See* NY3G Reply at 6-7.

[^360]: *See* Clearwire Corporation Comments at 1. Clearwire is
    operating high-speed wireless nomadic Internet access services for
    residential customers in several states using the 2.5 GHz band, and
    asserts that it has embarked on an aggressive roll out schedule and
    has plans to launch broadband systems in a number of additional
    markets in the coming months, utilizing the current interleaved band
    plan. *Id.* Similarly, Evertek, Inc. asserts it is providing
    broadband service to a number of rural customers using the 2.5 GHz
    band. *See* BRS Rural Advocacy Group and Central Texas
    Communications, Inc., Ex Parte Presentation to BRS/EBS proceeding,
    WT Docket No. 03-66, June 29, 2005.

[^361]: For example, while the 2.5 GHz band offers spectrum in larger
    blocks than some other bands, the propagation characteristics of the
    2.5 GHz band are not as robust as those in lower frequency bands.

[^362]: The number of "MHZ-pops" is calculated by multiplying the
    population of the license service area by the amount of spectrum (in
    megahertz) authorized by the license. Implementation of Section
    309(j) of the Communications Act -- Competitive Bidding, *Second
    Order on Reconsideration and Seventh Report and Order*, 11 FCC Rcd
    2639, 2672 (para. 80 n.159)(1995) (*Competitive Bidding Seventh
    Report and Order*).

[^363]: Application, Attach. 1 to Attach. E.

[^364]: *See* Nextel Response to Information Request No. 25.

[^365]: Application Rowley Finch Decl. at 5-7.

[^366]: Application, Attach. 1 to Attach E.

[^367]: *Id. Twenty-eight* percentage points is the highest incremental
    MHz-Pops increase for any market. We are not persuaded by assertions
    set forth by petitioners that the Applicants have not disclosed
    their lease holdings because Sprint Nextel attribute all licenses in
    MHz-Pops analysis. CTCN Reply at 16. We are also are not persuaded
    by petitioner claims that the Applicants' data is unreliable based
    on the inclusion of EBS and white space. We agree with Applicants
    that the inclusion or exclusion of this spectrum does not have a
    significant effect on the overall analysis of the merged entity
    holding in the 2.5 GHz band. Joint Opposition to Petitions at 33-34,
    n.90. Unlicensed white space may become available in the future and
    EBS licensees routinely lease excess capacity. *See* *BRS/EBS R&O*,
    19 FCC Rcd at 14226 ¶¶ 160-162.

[^368]: Application Attach. 1 to Attach. E.

[^369]: *Id*.

[^370]: *See* Nextel Response to Information Request No. 25 at 3.

[^371]: CTCNet Reply at 6-8.

[^372]: CTCNet Supplement to Reply at 4.

[^373]: Many commenters contend that the merger is in the public
    interest and that it will not result in competitive harms. *See,
    e.g.,* Intel at 3-4; Northern Virginia Technology Council USF at 1;
    Clarendon Foundation at 1; United Wireless Corp. at 1-2; Nex-Tech at
    1; Pioneer Telephone Cooperative at 1; Telecommunications for the
    Deaf, Inc. (TDI) at 1; ViaNet Opposition to Petitions at 3-5.

[^374]: *See* Amendment of Parts 21 and 74 of the Commission's Rules
    with Regard to Filing Procedures in the Multipoint Distribution
    Service and in the Instructional Television Fixed Service, *Report
    and Order,* 10 FCC Rcd 9589, 9609 ¶ 37 (1995) (*BTA Auction Order)*.

[^375]: *Id.* at 9621¶ 41.

[^376]: *See BRS/EBS R&O*, 19 FCC Rcd at 14222 ¶ 150.

[^377]: *Id.* at 14222-223 ¶ 52.

[^378]: CTCNet argues that the Applicants' past record of usage of BRS
    spectrum is inadequate because only 28% of Nextel's commercial BRS
    authorizations are constructed. CTCNet Pet. at 20. Petitioner's
    argument only goes to further emphasize our point that, based on the
    widespread underutilization of spectrum in the 2.5 GHz band,
    significant steps are needed to encourage deployment of BRS,
    including ensuring that operators are able to provide service with
    as few regulatory encumbrances as possible. Further, we disagree
    with NY3G which asserts that the Commission has regulated nascent
    services. NY3G Reply at 11-12. In contrast, the Commission has
    demonstrated a preference to allow broadband markets to develop with
    fewer levels of regulatory burden than traditional voice service.
    *See, e.g.,* Appropriate Framework for Broadband Access to the
    Internet over Wireline Facilities, Universal Service Obligations of
    Broadband Providers, *Notice of Proposed Rulemaking,* 17 FCC Rcd
    3019 (2002); Review of Regulatory Requirements for Incumbent LEC
    Broadband Telecommunications Services, *Notice of Proposed
    Rulemaking*, 16 FCC Rcd 22745, 22747 ¶4 (2001). Regardless,
    Commission precedent in regulating the 2.5 GHz band clearly guides
    use to permit a primary licensee in a given BTA.

[^379]: *BRS/EBS NPRM*, 18 FCC Rcd at 6771¶ 117, 6776-77 ¶¶ 127-28,
    6781-82 ¶ 142. We also note that in the BRS Order the Commission
    discussed proposals for substantial service standards to limit
    warehousing. *BRS/EBS R&O,* 19 FCC Rcd at 14285 ¶ 325.

[^380]: *BRS/EBS R&O,* 19 FCC Rcd at 14216 ¶ 132, 14233-34 ¶¶ 179-181.
    No spectrum caps were imposed on licensees.

[^381]: *Comcast AT&T Order*, 17 FCC Rcd at 23246 ¶ 30 (issues related
    to industry-wide trends are more appropriately considered in
    rulemaking proceedings, rather than in our merger review processes).

[^382]: CTCNet Reply at 9.

[^383]: *See* *Ex parte* Letter from Lawrence R. Krevor, Vice President,
    Government Affairs, Nextel Communications Inc. and Vonya B. McCann,
    Senior Vice President, Federal External Affairs, Sprint Corporation
    to Marlene H. Dortch, Secretary, Federal Communications Commission
    (August 2, 2005)(Applicant's Buildout Commitment Letter).

[^384]: *See* *BRS/EBS R&O & FNPRM.*

[^385]: *See* 47 U.S.C. § 706; Availability of Advanced
    Telecommunications Capability in the United States, *Fourth Report
    to Congress*, 19 FCC Rcd 20540, 20551 (2004) (("Section 706 Fourth
    Annual Report to Congress").04-208 (rel. Sep. 9, 2004) at 12.

[^386]: *See* Intel Comments at 4. *See also* Federal Communications
    Commission Releases Data on High-Speed Services, December 22, 2004
    (announcing continued growth in broadband services for July 2004
    reporting period).

[^387]: *Section 706 Fourth Annual Report to Congress*, 19 FCC Rcd at
    20553-20562, 20583.

[^388]: Application, Public Interest Statement at 32.

[^389]: *Id.* at 42.

[^390]: *Id*.

[^391]: Rowley-Finch Decl. at 8.

[^392]: *Id*.

[^393]: Application, Public Interest Statement at 43.

[^394]: *Id.* Several commenters agree with Applicants that the merger
    would result in public interest benefits. *See* Private Networks,
    Inc. at 1; Clarendon Foundation at 2; Intel Corporation at 1;
    SpeedNet, L.L.C. at 1; Communications Group of the University of
    Arizona at 1; University of South Florida at 1-2; Via/Net Companies
    at 1, 5.

[^395]: Rowley-Finch Decl. at 3.

[^396]: Rowley-Finch Decl. at 13.

[^397]: CTC-Net Further Comments at 5.

[^398]: *See 800 MHz Report and Order, supra note* 10, *Supplemental
    Order, supra note* 44.

[^399]: *See* *800 MHz Report and Order*, 19 FCC Rcd 14969.

[^400]: *Id.* at 14973 ¶ 3, 15021-15045 ¶ 88-141.

[^401]: *Id*. at 15045-15079 ¶¶ 142-207.

[^402]: *Id*. at 15046 ¶¶ 144-145.

[^403]: *Id.* at 14978 ¶ 12, 15080-15085 ¶¶ 210-222.

[^404]: *See* *Supplemental Order*,19 FCC Rcd 25120.

[^405]: *See* WT Docket No. 02-55 (Preferred Petition for
    Reconsideration of 800 MHz Order at 2-3, 12-28; SAFE Coalition
    Petition for Partial Reconsideration of Supplemental Order at 3-4;
    Coastal SMR and Scott MacIntyre Joint Petition for Partial
    Reconsideration of 800 MHz Order at 7-9).

[^406]: *See* WT Docket No. 02-55 (Preferred Petition for
    Reconsideration of 800 MHz Order at 5, 42-45; Coastal SMR and Scott
    MacIntyre Joint Petition for Partial Reconsideration of 800 MHz
    Order at 12-15, 17; Duncan Petition for Reconsideration of 800 MHz
    Order at 5-9).

[^407]: *See* WT Docket No. 02-55 (Coastal SMR and Scott MacIntyre Joint
    Petition for Partial Reconsideration of 800 MHz Order at 12-15, 17).

[^408]: *See* Preferred Petition to Deny at 9; SAFE Coalition Petition
    to Deny at 5-9.

[^409]: *See, e.g.,* SAFE Coalition Petition to Deny at 8 & n.16.

[^410]: *Id*. at 5-7.

[^411]: *Id*. at 5-6.

[^412]: *Id*. at 5-9.

[^413]: Preferred Petition to Deny at 3, 9, 11-13; Preferred Reply at 3,
    8.

[^414]: Preferred Petition to Deny at 2, 10, 15, 16; Preferred Reply at
    6-8.

[^415]: *See* Duncan Petition to Deny at 3.

[^416]: *See* *id*. at 4.

[^417]: *See id*. at 5, 7-9.

[^418]: In our analysis of competition in the mobile telephony and the
    2.5 GHz band, we address Preferred's concerns about consolidation
    and explain why the proposed merger would not lead to
    anticompetitive effects. *See supra* Sections V.A. and V.B.1.a.

[^419]: Duncan Petition to Deny at 3.

[^420]: *800 MHz Report and Order*, 19 FCC Rcd 15804 ¶ 227-228.

[^421]: *See* Application, Public Interest Statement at 23, 25-27.

[^422]: *See* *supra* Section V.A.7.

[^423]: *See* Application, Public Interest Statement at 63.

[^424]: SAFE Coalition Petition to Deny at 6.

[^425]: Application, Public Interest Statement at 16-18. Generally, such
    affiliates construct PCS networks and provide service over licenses
    held and controlled by Sprint, and Sprint does not have ownership
    interest in these affiliates.

[^426]: US Unwired Inc. Informal Request for Commission Action (June 2,
    2005).

[^427]: Sprint Reply to Informal Request at 1 (June 10, 2005).

[^428]: *See* Applications of Vodafone Airtouch, PLC and Bell Atlantic
    Corp., Order on Further Reconsideration, 17 FCC Rcd 10998, 11000 ¶ 6
    (WTB 2002), *reconsideration dismissed* 18 FCC Rcd 1861 (WTB 2003),
    *review denied in part, dismissed in part* 20 FCC Rcd 6439 (2005).
    *See also Cingular-AT&T Wireless Order,* 19 FCC Rcd at 21552 n.222
    (citing Vodafone AirTouch, PLC, and Bell Atlantic Corp., *Memorandum
    Opinion and Order*, 15 FCC Rcd 16507, 16511-12 ¶ 12 (WTB, IB 2000)
    ("*Bell Atlantic-Vodaphone Order*") and Applications of Centel Corp.
    and Sprint Corp*.*, *Memorandum Opinion and Order*, 8 FCC Rcd 1829,
    1831 ¶ 10 (CCB 1993)). The Commission has refused to interject
    itself into private matters, finding that a court, and not the
    Commission, is the proper forum to resolve such disputes. *Bell
    Atlantic-Vodaphone Order*, 15 FCC Rcd at 16514 n.37 (citing
    Applications of WorldCom and MCI Communications Corp., *Memorandum
    Opinion and Order*, 13 FCC Rcd 18025, 18148 ¶ 214 (1998); PCS 2000,
    L.P., 12 FCC Rcd 1681, 1691 ¶ 93 (1997)). We note that since US
    Unwired filed its informal request in this proceeding, it has been
    reported that Sprint has agreed to acquire US Unwired. Sprint to Buy
    US Unwired Affiliate, *Wall St. J.*, July 12, 2005, at B3. It is
    further reported that among other matters, as part of that
    agreement, Sprint and US Unwired would seek a stay of certain court
    litigation between those two parties. *Id*.

[^429]: CWA Petition at 2, 4-5; s*ee also* New Jersey Ratepayer Reply
    6-7.

[^430]: CWA Petition at 6-9.

[^431]: Letter from Gary D. Forsee, Chairman and CEO, Sprint Corp., and
    Timothy M. Donahue, President and CEO, Nextel Communications, Inc.,
    to Ms. Marlene H. Dortch, Secretary, FCC, WT Docket No. 05-63 (filed
    Aug. 2, 2005).

[^432]: *Id.* at 1.

[^433]: *Id.* Sprint and Nextel note that the planned spin-off of
    Sprint's local telephone operations will be the largest independent
    local exchange carrier in the nation, with 2004 annual revenues
    exceeding \$6 billion, and serving more than 7.5 million switched
    access lines in 18 states as of the end of June 2005.

[^434]: *Id.* at 2 n.2.

[^435]: *See* 47 CFR §1.17.

[^436]: See *infra* Section V.B.2(a)-(c).

[^437]: In undertaking this analysis, we considered variables that the
    general analyses indicate are important for predicting the
    incentives of the merged entity and potential responses of rivals.
    These included: the number and identity of rival carriers; the
    number of firms that can offer competitive nationwide service plans;
    the coverage of the firms' respective networks; the market's
    concentration and change in concentration; the merged entity's
    post-transaction market share; the share of spectrum suitable for
    the provision of mobile telephony services controlled by the
    combined entity; and the spectrum holdings of each of the rival
    carriers identified. In reaching determinations on specific markets,
    we balanced these factors on a market-specific basis, and considered
    the totality of the circumstances in each market. *See id.*

[^438]: We use the Applicants' revised SAC analysis, which is contained
    in the Applicants' response to Information Request Sprint 13/Nextel
    12.

[^439]: Note that had we run our initial screen using BTAs instead of
    CEAs or CMAs, these seven BTAs would have been included among the
    markets identified by our initial screen criteria as requiring
    further analysis.

[^440]: We combined the data received in response to our request with
    December 2004 NRUF data for carriers that were not subject to that
    request.

[^441]: Population and population density figures are based on 2000
    Census data.

[^442]: In addition, although our NRUF data indicates that
    **\[REDACTED\].**

[^443]: Triton PCS has filed an application to assign its spectrum in
    BTA075 to Cingular. Further, Triton has sold its network and
    subscriber contracts to Cingular in this BTA. *See* ULS File No.
    0001963918.

[^444]: In addition, although our NRUF data indicates that Verizon
    Wireless does not have subscribers in this BTA, the billing data
    indicates that Verizon Wireless has **\[REDACTED\]** percent of the
    market.

[^445]: Alpine PCS Debtor in Possession filed an application to assign
    its license in BTA 307 to Dobson. The Commission consented to this
    application on May 25, 2005. A consummation notification has not
    been filed for this license. *See* ULS File No. 0001885064. Also,
    Lite Wave Communications, LLC filed an application to assign its
    license in BTA 307 to Dobson. The Commission consented to this
    application on July 5, 2005. A consummation notification has not
    been filed for this license. See ULS File No. 0002182069.

[^446]: Leap filed an application to assign its license in BTA 307 to
    Verizon Wireless. The Commission consented to this application on
    June 22, 2005. A consummation notification has not been filed for
    this license. See ULS File No. 0002099501.

[^447]: The market share numbers obtained from the different data
    sources indicate that there is some potential for the merged entity
    to have the highest market share in this BTA, although it appears
    more likely that ALLTEL would hold the largest post-transaction
    market share.

[^448]: Cingular is leasing 20 MHz of spectrum to T-Mobile in Inyo,
    L.A., Orange, Riverside, San Bernadino, and Ventura Counties. This
    lease is a long-term, de facto lease.