Before the

Federal Communications Commission

Washington, D.C. 20554

In re Applications of )

)

Various Subsidiaries and Affiliates of ) File Nos. 0000013318

GEOTEK COMMUNICATIONS, INC., ) 0000013319

Debtor-In-Possession, ) 0000013321

Assignors, ) 0000013499

) 0000013499

and ) 0000013504

) 0000014139

WILMINGTON TRUST COMPANY or ) 911823

HUGHES ELECTRONICS CORPORATION, ) 911825

Assignees, ) 911827

)

)

In re Applications of )

)

WILMINGTON TRUST COMPANY or ) File Nos. 911830

HUGHES ELECTRONICS CORPORATION, ) 911831

Assignors, ) 911832

) 911833

and )

)

FCI 900, INC. )

Assignee, )

)

)

For Consent to Assignment of 900 MHz )

Specialized Mobile Radio Licenses )

**MEMORANDUM OPINION AND ORDER**

Adopted: January 14, 2000 Released: January 14, 2000

By the Chief, Wireless Telecommunications Bureau:

TABLE OF CONTENTS

Para.

I. INTRODUCTION 1

II\. BACKGROUND 2

III\. Discussion 6

A. Statutory Authority 7

B. Qualifications 10

1\. Qualifications of Geotek to Assign the Licenses to the Creditors 11

2\. Qualification of the Creditors to Hold the Licenses 16

3\. Qualifications of Nextel to Hold the Licenses 19

C. Public Interest Impacts [12](#public-interest-impacts)

1\. Analysis of Potential Public Interest Harms
[12](#analysis-of-potential-public-interest-harms)

a\. Competitive Assessment -- Consent Decree Markets
[12](#competitive-assessment-consent-decree-markets)

b\. Competitive Assessment -- Non-Consent Decree Markets 23

i\. Relevant Markets 25

ii\. CMRS Spectrum Cap 29

iii\. Mobile Voice Services 30

iv\. Trunked Dispatch Services 31

v\. Efficient Spectrum Use 43

2\. Analysis of Public Interest Benefits 44

D. Conclusion 49

IV\. Ordering clauses 51

#  INTRODUCTION

1 We have before us two related sets of applications from Geotek
Communications, Inc. ("Geotek"), Wilmington Trust Company
("Wilmington"), Hughes Electronics Corporation ("Hughes") and FCI 900,
Inc. ("FCI 900") seeking: (1) our consent to assign the 900 MHz licenses
currently held by affiliates or subsidiaries of Geotek to Wilmington or
Hughes, and (2) our consent to assign these licenses from Wilmington or
Hughes to FCI 900, a subsidiary of Nextel Communications, Inc.
("Nextel"). Also, as discussed in greater detail below, we have Nextel's
recent request to withdraw certain of the second set of applications,
specifically those involving markets covered by a Consent Decree between
it and the U.S. Department of Justice ("Nextel Consent Decree"), which
prohibits Nextel from acquiring licenses in certain markets until
October 2000. In this Order, we (1) grant all of the applications for
consent to assign licenses to Wilmington or Hughes; (2) grant the
applications for consent further to assign to FCI 900 those licenses in
markets not covered by the Nextel Consent Decree; and (3) accept the
withdrawal of the applications seeking consent to assign to FCI 900
those licenses in markets covered by the Nextel Consent Decree.

#  BACKGROUND

2 Geotek holds 191 900 MHz Specialized Mobile Radio ("SMR") licenses,
which it obtained in Auction No. 7 in 1996.[^1] On June 29, 1998, Geotek
filed a voluntary petition for reorganization under Chapter 11, Title 11
of the United States Code.[^2] In formulating a plan of reorganization,
Geotek conducted an auction process to determine the party, or parties,
to which it would seek to assign its licenses. In early February, 1999,
Geotek's creditors selected Nextel from among the bidders, and, on
February 16, 1999, the Bankruptcy Court entered an order authorizing the
sale of Geotek's 900 MHz SMR licenses to Nextel. Geotek, the primary
secured creditors (Wilmington and Hughes, collectively the "Creditors"),
and Nextel entered into agreements providing, *inter alia*, that, after
Commission approval, Geotek would assign the licenses to the Creditors,
and the Creditors would then assign the licenses to Nextel.[^3]

3 On March 5, 1999, pursuant to section 310(d) of the Communications Act
of 1934, as amended ("the Communications Act"),[^4] Geotek, through
various subsidiaries and affiliates, filed applications jointly with the
Creditors seeking Commission consent to assign 133 of Geotek's licenses
to Wilmington and fifty-eight licenses to Hughes. On March 9, 1999, the
Creditors and FCI 900 filed applications with the Commission seeking
consent to assign all of these licenses to FCI 900, a wholly owned
subsidiary of Nextel. Nextel operates a digital, wide-area SMR network,
providing bundled digital SMR services, including dispatch
communications services, interconnected mobile voice service, and short
messaging service.[^5] Nextel operates in more than 400 U.S. cities via
its 800 MHz licenses; it also holds licenses in the 900 MHz and 220 MHz
bands.[^6]

4 On May 28, 1999, by delegated authority,[^7] the Wireless
Telecommunications Bureau ("Bureau") issued a Public Notice to announce
that all the applications had been accepted for filing and to establish
a pleading cycle to enable interested parties to comment on the proposed
transaction.[^8] In response to this Public Notice, five petitions to
deny and one set of comments were filed (*see* Appendix A). Three of the
parties argue that we should deny the assignment of the licenses from
Geotek to the Creditors,[^9] and four of the Petitioners and the one
commenting party argue that we should deny the ultimate assignment of
the licenses to Nextel.[^10]

5 The Nextel Consent Decree, a 1995 agreement among Nextel, Motorola,
Inc., and the Department of Justice ("DOJ") settling an antitrust
lawsuit, prohibits Nextel from acquiring 900 MHz licenses in fifteen
major markets.[^11] In June 1999, Nextel and DOJ reached a settlement
that provided for the Consent Decree to terminate in October 2000. On
December 16, 1999, the U.S. District Court for the District of Columbia
("Consent Decree Court") accepted the settlement; as a result, the
Consent Decree remains in effect until October 2000.[^12] At this time,
therefore, Nextel remains prohibited from holding or acquiring Geotek's
licenses in the specified fifteen markets. On December 17, 1999, Nextel
requested that it be permitted to withdraw the applications to assign to
FCI 900 the licenses covered by the Nextel Consent Decree.[^13]

#  Discussion

6 As explained below, we find that the proposed assignees are fully
qualified to hold the licenses as proposed and that the assignment of
the licenses to the Creditors and the further assignment to Nextel of
those licenses not covered by the Nextel Consent Decree do not pose a
risk of harm to competition in U.S. telecommunications markets. In
addition, we find that these assignments should result in certain public
benefits. Accordingly, we conclude that, pursuant to section 310(d) of
the Communications Act, grant of the pending requests for assignment of
the licenses to the Creditors and further assignment to FCI 900 of those
licenses not covered by the Nextel Consent Decree would serve the public
interest. Hence, we deny the petitions and grant the specified
applications. Further, we accept the withdrawal by Nextel of the
applications to assign the licenses covered by the Nextel Consent Decree
from the Creditors to FCI 900.

## Statutory Authority

7 Section 310(d) of the Communications Act provides, in pertinent part,
that "\[n\]o construction permit, or station license, or any rights
thereunder, shall be transferred, assigned, or disposed of in any
manner, voluntarily or involuntarily, directly or indirectly, or by
transfer of control of any corporation holding such permit or license,
to any person except upon application to the Commission and upon finding
by the Commission that the public interest, convenience, and necessity
will be served thereby."[^14] Section 310(d) also requires the
Commission to consider the license transfer or assignment application as
if it were filed pursuant to section 308 of the Communications Act,
which governs applications for new facilities and for renewal of
existing licenses.[^15]

8 In addition to ensuring that assignor and assignee are duly qualified
and comply with the Commission's rules, we also consider, as part of our
examination under the "public interest, convenience, and necessity"
standard of section 310(d) of the Communications Act, the effects on
competition of a proposed assignment.[^16] Under Commission precedent,
our public interest analysis is informed by, rather than limited to,
traditional antitrust principles[^17] and also encompasses the broad
aims of the Communications Act,[^18] including evaluating whether any
public interest benefits may result from the proposed transaction.[^19]
Applicants bear the burden of proving that the proposed transaction
serves the public interest,[^20] and we must determine whether they have
met this burden.[^21]

9 The public interest standard of Section 310(d) involves a balancing
process that weighs the potential public interest harms of the proposed
transaction against its potential public interest benefits.[^22] In
summary, the Applicants must demonstrate that the transaction will not
violate or interfere with the objectives of the Act or Commission rules,
and that the overall effect of the assignment will be to advance the
public interest.[^23]

## Qualifications

10 A number of the Petitioners challenge the basic qualifications of
either Geotek, as assignor, or the Creditors or Nextel, as assignees, as
reason why we should not consent to these assignments. As a preliminary
matter, we note that, in evaluating assignment and transfer applications
under section 310(d) of the Communications Act, we do not re-evaluate
the qualifications of the assignor or transferor unless issues related
to their basic qualifications have been designated for hearing by the
Commission or have been sufficiently raised in petitions to warrant the
designation of a hearing.[^24] By contrast, as a regular part of our
public interest analysis, we determine whether the proposed assignee is
qualified to hold a Commission license and whether grant of the
application would result in the proposed licensee violating any
Commission rules.[^25]

### Qualifications of Geotek to Assign the Licenses to the Creditors

11 In this case, one petitioner, Hugh P. Taylor, claims that Geotek is
not qualified to hold Commission licenses, and that we should designate
the applications for hearing under Section 309(e) of the Communications
Act. As we read Mr. Taylor's arguments, the bases for his claim are his
assertions that: (1) Geotek intentionally failed to disclose a certain
interest holder in ownership filings with the Commission, specifically
FCC Form 430,[^26] (2) Geotek misrepresented to the Commission the state
of its build-out plan and let the construction deadline for its licenses
lapse,[^27] and (3) Geotek's securities filings and press releases
contained false information.[^28]

12 In response, Geotek states that, with respect to the ownership
filings, Mr. Taylor does not claim any personal knowledge of the events
described in the petition or of the motivations of those who prepared
and filed the reports.[^29] Further, Geotek states that it reported its
ownership to the best of its knowledge and ability, and, in any event,
Geotek could not have known if S-C Rig Investments III, L.P. ("S-C
Rig"), a minority shareholder in Geotek, had provided incorrect
information regarding ownership in the shareholder.[^30] Geotek provides
an affidavit from S-C Rig explaining that (1) the information provided
to Geotek was correct because only one person could have been deemed to
have beneficial ownership of the securities of S-C Rig III at the time;
and (2) therefore, only one interest holder should have been, and was,
disclosed with respect to S-C Rig III's holding in Geotek, and this
interest holder was disclosed in Geotek's ownership filings.[^31]

13 With respect to its representations to the Commission regarding its
build-out plans and the construction deadline, Geotek states that Mr.
Taylor mischaracterizes Geotek's actions because of his misunderstanding
of the rules regarding the relationship between Designated Filing Area
("DFA") licenses and Major Trading Area licenses. Geotek responds that
the construction deadline for Geotek's MTA licenses has not yet
passed,[^32] and explains that in situations in which existing DFA
licensees obtained the corresponding MTA license for the same channel
block through auction, the Commission has provided for reduced or
delayed regulatory obligations.[^33] Specifically, Geotek cites
Commission precedent stating that "\[e\]ven if . . . incumbents have
been unable to load their systems because they are limited to operating
in DFAs, they now have the ability to overcome this obstacle by
obtaining an MTA license, which exempts them from all previously
applicable loading requirements."[^34]

14 Regarding the securities filings and press releases, Geotek responds
that these issues are not properly before the Commission because they do
not pertain to the proposed transactions and, further, are currently the
subject of pending, private litigation initiated by Mr. Taylor in
Tennessee state court against certain current and former directors and
officers of Geotek.[^35]

15 We find that that Mr. Taylor's petition does not justify either
denying the applications or designating Geotek's basic qualifications
for hearing.[^36] Mr. Taylor's filings, while voluminous, do not raise a
substantial and material question as to the accuracy of Geotek's
ownership filings. Geotek, moreover, provides the declaration of an
individual with personal knowledge of the matters that Mr. Taylor
discusses.[^37] That declaration provides reasonable and logical
explanations for the discrepancies alleged by Mr. Taylor. With respect
to the construction-related claims raised by Mr. Taylor, of the three
DFA licenses at issue in this matter, Commission records indicate that
two were timely constructed and placed into operation,[^38] while the
third is encompassed within a subsequent MTA license.[^39] Geotek acted
properly when it filed an implementation plan based on the MTA license,
rather than the DFA license, and it was entitled to rely on the MTA
construction deadline.[^40] Finally, we believe that the
securities-related issues raised by Mr. Taylor are not properly before
the Commission, and the merits of claims raised in private litigation
(to which Geotek is not a party) are not properly included in this
proceeding.[^41] Therefore, we deny Mr. Taylor's petition.

### Qualification of the Creditors to Hold the Licenses 

16 Three of the Petitioners argue that the Creditors lack the basic
qualifications to hold the licenses.[^42] Southern Communications
Services, Inc. ("Southern") argues that the Creditors are unqualified
because their primary reason for acquiring the licenses is to maximize
the return on their collateral, which is irrelevant to our public
interest determination under Section 310 of the Act, and not to put the
licenses into operation.[^43] Mobex Communications, Inc. ("Mobex"), the
Alliance for Radio Competition ("ARC"), and Southern argue that the
Creditors are acting as agents of Nextel in these proposed transactions,
which we interpret as an argument that the Creditors are not the real
party in interest in the applications.[^44]

17 In response, the Creditors state that their desire to maximize the
return on their investment and their willingness to assign the licenses
to Nextel have no bearing on whether they intend to fulfill their
responsibilities as licensees.[^45] The Creditors argue that, to the
contrary, their "substantial interest in preserving the value of their
collateral enhances their incentive to comply with the obligations
imposed on Commission licensees, and that they have already begun
considering what steps may be necessary to comply with those
responsibilities."[^46] In addition, the Creditors have explained that
the particular way in which the proposed assignments are structured is a
function of the bankruptcy proceeding, and that the costs of
restructuring the transactions and obtaining further bankruptcy
approvals are unreasonably high.[^47] Further, whether or not approval
is obtained to assign the licenses to Nextel, approving assignment of
the licenses to a party other than a party undergoing a bankruptcy
reorganization permits the licenses to be put into service sooner.[^48]

18 We are not persuaded by the arguments of the Petitioners that the
Creditors lack the basic legal, technical, or financial qualifications
to hold the licenses. We find that the Creditors' desire to maximize the
return on their investment and their intention to assign the licenses to
Nextel are not in and of themselves inconsistent with their ability or
intention to fulfill their responsibilities as licensees.[^49]
Petitioners cite no precedent to the contrary. That the Creditors do not
intend to hold the licenses for the full extent of the build-out phase
does not undercut their position, nor does it relieve them of the
obligations placed on licensees by the Commission's rules.[^50] Further,
we are cognizant of the difficulties presented by the requirement that
Geotek and its creditors develop, obtain confirmation of, and implement
a plan of liquidation approved by the Bankruptcy Court, which is
necessary to permit the licenses to be put into service. Therefore, we
deny the petitions of Mobex, ARC, and Southern with respect to these
issues.

### Qualifications of Nextel to Hold the Licenses

19 Two Petitioners raise questions regarding Nextel's qualification as a
licensee.[^51] Mobex and ARC both allege that Nextel may have violated
the Nextel Consent Decree not only by failing to divest the requisite
900 MHz licenses but also by acquiring additional licenses in excess of
the maximum specified in the Nextel Consent Decree.[^52] Mobex and ARC
argue that these alleged violations of the Nextel Consent Decree
demonstrate that Nextel does not possess the requisite character to hold
Commission licenses, and that, therefore, the applications for
assignment of licenses to Nextel should be dismissed.

20 Nextel argues in response that it has been and continues to be in
compliance with the Nextel Consent Decree.[^53] Nextel points out that
Mobex and ARC recently made the same allegations before the Consent
Decree Court, and DOJ found no basis for investigating these
allegations.[^54]

21 We do not find that Petitioners' allegations regarding Nextel's
conduct under the Nextel Consent Decree provide a basis for denial of
the applications. Petitioners' arguments are based on alleged violations
of the Nextel Consent Decree, to which the Commission was not a party
and which DOJ has responsibility to interpret or enforce.[^55] DOJ was
presented with similar allegations by Mobex and ARC and determined that
no further action was warranted.[^56] Under these circumstances, we find
no basis to conclude that Nextel lacks the requisite character under the
Commission's rules to be a Commission licensee, and we deny the
petitions of Mobex and ARC on this issue.

## Public Interest Impacts

### Analysis of Potential Public Interest Harms

#### Competitive Assessment -- Consent Decree Markets

22 From a consumer's perspective, the Geotek licenses are not currently
being used to provide any service. Geotek has ceased its operations and
intends to liquidate. Therefore, the licenses will not be put into
service as long as they remain with Geotek. Moreover, the Creditors do
not currently offer any telecommunications services for which these
licenses could be used, and nothing in the record indicates any
potential competitive harms that may result from the Creditors holding
the licenses encompassing the Consent Decree markets. Any competitive
issues that might arise from future applications to assign these
licenses from the Creditors to another party will be addressed in the
context of any such future applications.

#### Competitive Assessment -- Non-Consent Decree Markets

23 All parties essentially assess the effects of a direct assignment
from Geotek to Nextel in the non-Consent Decree markets. We, too, follow
this approach. We find that the assignment of licenses will not result
in competitive harm in these markets. First, we note that this
transaction does not have the negative implications of a horizontal
merger. Because Geotek is not providing service that competes with
Nextel -- or, indeed, any service at all -- the transaction will not
result in a reduction of existing competition. Consumers will,
therefore, have the same access to alternative services and service
providers in these markets as they currently have. Second, we believe
that there are significant prospects for entry of new services that will
compete directly with Nextel's service offerings, thus enhancing future
competition in the markets in which Nextel operates. Third, even if this
transaction means that the spectrum will not be put to use providing
certain kinds of dispatch service, as Petitioners contend, we find that
this is not a competitive harm. Our rule affords licensees great
flexibility to choose the type of service they will provide on this
spectrum, allowing the marketplace to determine its highest and best
use. Thus, the effect of this transaction is that currently unused
spectrum will be put to its highest valued use.

24 Finally, we note that our approval of this transaction is consistent
with the position of DOJ, which did not challenge Nextel's acquisition
of SMR licenses held by Motorola in non-Consent Decree cities in 1995,
and, similarly, has not challenged Nextel's proposed acquisition of
Geotek licenses in the non-Consent Decree markets. Because these markets
are generally smaller than the Consent Decree Markets, and, therefore,
have fewer potential customers, it is unlikely that this transaction
will limit the capacity of Nextel's competitors to meet consumer demand.

##### Relevant Markets

25 The Geotek licenses involve spectrum well suited, given current
technology, to the provision of paging, dispatch, mobile voice, mobile
data, or combinations of these services. These licenses are not
currently being used to provide commercial service in any market. Nextel
states that it intends to use the licenses it acquires in the provision
of bundled services, including mobile voice telephony, workgroup
calling, messaging, and data.[^57]

26 Petitioners generally focus on the competitive effects of the
acquisition on the trunked dispatch, or simply dispatch, market.[^58]
Nextel maintains that "the appropriate market for analyzing the proposed
transaction is the Commercial Mobile Radio Service ("CMRS")
marketplace"[^59] but also, for consistency with the Bureau's analysis
in *Pittencrieff*,[^60] evaluates the acquisition's competitive effects
on dispatch and interconnected mobile voice services.[^61] We need not
address the market definition question in detail because we essentially
employ the approach advanced by Petitioners. For analytical convenience,
therefore, we will examine the competitive effects of this transaction
using the product market definitions that we employed in *Pittencrieff,*
which are essentially equivalent to the definitions proposed by
Petitioners. In approving Nextel's 1997 acquisition of Pittencrieff
Communications, Inc., an 800 MHz SMR licensee, we defined two relevant
product markets: interconnected mobile phone and dispatch.[^62] Herein,
we employ these two product markets, although for clarity we alter
terminology slightly and label them "mobile voice" and "trunked
dispatch."[^63]

27 While we adopt the *Pittencrieff* product market definitions for
convenience,[^64] we also find that the boundaries between various CMRS
sectors are fluid. These changes result from the Commission's general
policy of allowing flexible use in the CMRS sector, and even more
importantly, from the rapid evolution of technology and the wireless
marketplace. For example, mobile data services are emerging and are
becoming closely integrated with mobile voice and other offerings. Also,
services offered by cellular and broadband PCS firms are increasingly
competing with services offered by paging and messaging carriers. In
addition, not only does Nextel's bundled offering of mobile voice and
the Direct Connect^®^ service option[^65] straddle the two
*Pittencrieff* markets, but the Direct Connect^®^ service option itself
may be seen as providing more than trunked dispatch. To some degree, it
is a substitute for features associated with mobile voice such as speed
dialing and conference calling. Thus, we recognize that legitimate
questions can be raised about the suitability of the market definitions
we found appropriate in *Pittencrieff* three years ago. We are now more
prepared to broaden our consideration of the competitive impact of
market participants outside of the sharply delineated wireless sectors
we have used recently when evaluating proposed transfers and
assignments. The convergence of these technologies leads us to believe
that consumers may begin to use more of these wireless services
interchangeably (and that carriers may increasingly market such services
to the same set of consumers).

28 Nevertheless, as noted above, we approve these assignments regardless
of the market definition adopted. Moreover, because the licenses at
issue here are not now being used to provide service in any
telecommunications market, and because they are suitable for the
provision of numerous services, our analysis necessarily involves
consideration of a wide range of CMRS services and certain Private
Mobile Radio Service ("PMRS") services as well.

##### CMRS Spectrum Cap

29 The Geotek licenses Nextel seeks to acquire would give Nextel an
additional attributable interest in spectrum covered by the CMRS
spectrum cap[^66] of between 0.5 and 1.75 MHz per market, or between 20
and 70 SMR channels per market.[^67] The proposed acquisition does not
violate the general CMRS spectrum cap rule because the only spectrum
counted for the purpose of determining compliance with the cap in which
Nextel has an attributable interest is SMR spectrum, and holdings of SMR
spectrum alone cannot violate the cap. The maximum amount of SMR
spectrum counted against the cap is 10 MHz regardless of the amount
acutally held.[^68]

##### Mobile Voice Services

30 The acquisition of the Geotek licenses by Nextel will not harm
competition and indeed will likely have pro-competitive effects in
relevant mobile voice markets. We define this product market as
consisting of all commercially available two-way, mobile voice services
providing access to the public switched telephone network via
terrestrial systems. These services are currently provided by cellular
companies, broadband personal communications services ("PCS") providers,
and interconnected, trunked SMR firms.[^69] While the amount of spectrum
capacity being acquired by Nextel is small relative to the total amount
of spectrum employed in the provision of mobile voice services, and any
competitive impact will likely be small, the effect should nevertheless
be positive. Moreover, this acquisition does not raise issues regarding
concentration in the ownership of spectrum employed in the provision of
mobile voice services. Rather, it will increase the amount of capacity
held by a firm that currently has significantly less capacity than its
chief rivals.[^70] In sum, approval of these applications will further
the development of competition in the relevant mobile voice markets.

##### Trunked Dispatch Services

31 Opponents of the proposed transaction focus their arguments on the
alleged effects of the proposed license assignment in trunked dispatch
markets. These opponents argue that the trunked dispatch market is
already highly concentrated and will become even more dominated by
Nextel should the Commission grant assignment of Geotek's licenses.[^71]
Several Petitioners assert that Nextel has market power that allows it
to unilaterally increase dispatch prices, and that Nextel currently
charges the highest rates in the market.[^72] We find that while these
markets are concentrated, this transaction is not likely to result in
competitive harms because there are other sources of actual and
potential competition that will likely constrain Nextel's ability to set
prices or restrict customers' access to these services.[^73]

###### Market Participants

32 The market for trunked dispatch services includes firms offering on a
commercial basis both one-to-one and one-to-many calling services on
trunked systems employing either analog or digital network
architectures. In *Pittencrieff*, we found that these services were
provided primarily by carriers operating at 800 MHz, 900 MHz, and 220
MHz, but also by qualified private land mobile operators.[^74] We now
adopt the term "trunked dispatch" for this market. We use the term
"traditional dispatch" to refer to non-interconnected, non-CMRS,
commercial dispatch services (typically non-trunked, analog systems). We
use the term "private dispatch" to refer to in-house systems operated by
companies solely to support their own business operations.

###### Market Concentration

33 We concur with DOJ that the relevant trunked dispatch markets are
concentrated.[^75] Petitioners' experts furnish analyses of market
concentration using Herfindahl-Hirschman Indices (HHIs) at both the
national and local levels, showing very high market concentration.[^76]
However, we conclude that Nextel's acquisition of the Geotek spectrum
does not raise market concentration. As we have noted, this transaction
is not a horizontal merger but, rather, constitutes an addition of
spectrum capacity to the market. Second, not all of the spectrum that
Nextel seeks to acquire -- which varies between 0.5 MHz and 1.75 MHz per
geographic market -- should be considered an addition to the trunked
dispatch market. Much of this capacity will be used for provision of
mobile voice. Thus, we find that ARC's spectrum-based HHI analysis
overstates the increase in concentration. In particular, it overstates
the increase in Nextel's trunked dispatch capacity because the Direct
Connect^®^ service feature should not be considered exclusively a
trunked dispatch product.[^77] Beyond these considerations, there will
be no impact on concentration in the short run because no ongoing
business in this market is being acquired (and, therefore, properly
calculated HHIs based on subscribers, output, or revenue would be
unchanged). In addition, any increase in concentration here is less of a
concern than if it resulted from a horizontal merger because the
transaction expands market capacity; thus it should also have an output
expansion effect.

34 Finally, while we do not find the traditional dispatch and private
dispatch sectors to be part of the trunked dispatch market, we
nonetheless believe that, for some trunked dispatch consumers,
traditional dispatch services (whether CMRS or PMRS) are likely to be a
viable competitive alternative. And, for some large, trunked dispatch
consumers, the option of owning and operating an in-house radio system
will be a competitive alternative. These services, as well as non-voice
(data) dispatch systems, constitute alternatives that when viewed
collectively help to constrain Nextel's ability to behave
anti-competitively in the relevant trunked dispatch markets.

###### Market Entry

35 Moreover, in the relatively near future, we believe that additional
market entry is likely to ensure that competitive conditions facing
consumers in these markets will improve. We are confident that entry can
be relied upon to prevent competitive harm in this case because barriers
to entry are low and numerous firms with qualifications and abilities to
enter exist. In particular, we find that cellular and broadband PCS
firms will have the ability to enter easily because they hold spectrum
licenses, have relevant physical assets in place, have expertise in
wireless technologies and markets, are ongoing businesses with
recognizable brand names, and have ample capital resources. In addition,
certain 220 MHz licensees have some of these attributes, and we find
they are likely entrants as well.

36 *Cellular/PCS Entry.* We agree with DOJ's conclusion that a number of
cellular and PCS firms appear to be positioning price and service plans
to compete more closely with Nextel's mobile voice service and Direct
Connect^®^ feature.[^78] The large PCS and cellular providers, including
those managed by the Regional Bell Operating Companies, are
well-capitalized companies capable of developing service offerings to
compete with Nextel in this market. The first step was the introduction
of plans offering discounted billing for group-calling services. In
February 1998, Bell Atlantic introduced a mobile-to-mobile calling plan
permitting callers to make unlimited one-to-one calls to other Bell
Atlantic Mobile subscribers. The service was intended to appeal to
mobile workers who communicate frequently with each other over the Bell
Atlantic Mobile network.

37 Competition from mobile voice providers has since evolved from
discounted billing plans to improved group-calling functionality.[^79]
For example, Ericsson's TDMA Pro product overlays dispatch capabilities
onto existing mobile voice networks by programming the network's servers
and handsets.[^80] Dispatch calls are routed to the server, which, in
turn, simultaneously contacts members of predefined dispatch groups,
eliminating the sequential calling delays characteristic of discount
billing plans. In September 1999, under the Cellular One brand name, SBC
launched *Cellular One to One*, a service employing the Ericsson
technology enabling subscribers to make conference calls with up to 30
different parties by dialing pre-programmed group numbers. This service
has already been rolled out in the metropolitan Chicago area, suggesting
that it can also be rolled out elsewhere. We will monitor these
developments and amend our conclusions regarding competitive conditions
in these markets in future license transfer applications if our
expectations for these expanded service offerings and pricing plans are
not met.

38 The efforts of cellular and broadband PCS firms to develop
group-calling services are just what should be expected from a policy of
allowing flexible use of spectrum licenses. If Nextel, or any firm, has
identified a profitable niche, other firms will enter that niche to
compete away excess profits. Investment and innovation enable
telecommunications carriers to upgrade existing technologies or to
acquire new ones. In the past, the Commission's service rules, which
restricted particular frequency bands to narrowly defined services or
even specific customer subsets, acted as a barrier to entry and limited
the impact of actual and potential competition from other spectrum
bands. The Commission's current policy of relying on flexible use to
efficiently direct CMRS spectrum resources to produce public benefits
has removed that regulatory impediment to competition.[^81]

39 *220 MHz Entry.* Spectrum in the 220 MHz band is also available for
entry and expansion in dispatch. The auctioning of the 220 MHz Phase II
licenses is complete; these licenses will provide 310 channels (155
channel pairs) of new dispatch capacity (1.55 MHz total) in each market,
allocated into thirteen frequency blocks and including three
unencumbered nationwide licenses. We agree with DOJ's conclusion that
entry of competitive dispatch providers in the 220 MHz band likely will
occur in the relatively near term.[^82] Petitioners complain that the
220 MHz signal penetrates buildings poorly and attenuates too slowly for
urban recycling.[^83] However, our understanding is that, in general, a
lower frequency signal (in this case, 220 MHz) actually penetrates
buildings slightly better than a higher one (here, 900 MHz) and that,
all else being equal, the 220 MHz signal propagates farther as well. As
for attenuation, this and other characteristics of the signal depend on
circumstances; within line of sight, a higher frequency performs better,
while below line of sight a lower frequency is preferable. Finally,
Petitioners' arguments neglect other signal strength determinants,
namely antenna height and transmitter power.

40 We emphasize that our analysis here is limited to the non-Consent
Decree markets. These markets are generally smaller than the Consent
Decree markets, which constitute essentially the fifteen largest U.S.
metropolitan areas. Thus, the demand for trunked dispatch service should
be correspondingly smaller in these markets, and the capacity available
from 220 MHz licensees larger relative to that demand. However, we also
emphasize that the capacity to be deployed by 220 MHz carriers alone
will not be sufficient to prevent competitive harm from arising here.
Rather, it is the combined effect of all the current alternatives and
likely entrants that forms the basis for our conclusion that no
anti-competitive effects should result in any relevant dispatch markets.

41 We disagree with Petitioners' arguments that alternative sources of
capacity suitable for dispatch use will be insufficient to meet
projected growth in market demand.[^84] Dispatch service providers
allege that spectrum suitable for providing dispatch services is
congested, and that future growth in demand will outstrip available
capacity.[^85] However, evidence on pricing of dispatch service
offerings appears inconsistent with claims that capacity is becoming
increasingly scarce. According to the American Mobile Telecommunications
Association ("AMTA"), the last significant increase for trunked analog
dispatch service prices occurred in 1992.[^86] In recent years, dispatch
prices for trunked analog service have actually fallen in real terms,
from \$15.51 per subscriber unit in 1995 to \$14.91 in 1998. Declining
real prices suggest that dispatch market capacity has been outpacing
demand. For example, Motorola's iDEN technology, introduced into service
over this period by Nextel and Southern, has increased spectrum capacity
three- to six-fold compared to analog systems. Ericsson's Enhanced
Digital Access System, used by Mobex, has yielded a two-to-four-fold
increase in capacity. Narrowband equipment manufactured by SEA and
Midland has led to capacity increases five times beyond analog
systems.[^87] Thus, while dispatch demand has grown, dispatch supply
appears to have been growing even more rapidly. We see no reason to
believe that these trends are poised for significant change. We find
that additional capacity to meet demand for dispatch services may become
available from cellular, PCS, private radio, and other dispatch-suitable
spectrum. Hence, we conclude that existing and expected additions to
market capacity will be sufficient to meet market demand.

42 *Relative Suitability of SMR Bands.* Finally, we find unconvincing
arguments that 900 MHz spectrum is vastly superior to alternative
spectrum bands for dispatch provision. First, although 900 MHz spectrum
is licensed in wide geographic areas, known as Major Trading Areas,
wide-area coverage can be achieved by acquiring more smaller-area
licenses, such as 220 MHz and 800 MHz licenses. Some carriers, including
Nextel, Southern, and others, have put together broad geographic service
areas in just this fashion. Second, while 900 MHz spectrum's 12.5
KHz-wide, ten-channel blocks are large enough to accommodate digital
technologies, digital technology is not as critical for the short,
push-to-talk dispatch exchanges as it is for mobile voice, which
involves longer calls and greater spectrum demands.

##### Efficient Spectrum Use

43 We reject Petitioners' argument that the redeployment of spectrum
from traditional dispatch is a competitive harm.[^88] Rather, spectrum
assets are exiting traditional dispatch in search of higher returns, and
this transaction apparently furthers the redeployment of spectrum to
higher valued uses. Nextel plans to re-deploy the Geotek spectrum to the
provision of its bundled service offering. Southern and Mobex, two of
the larger SMR operators, have themselves expressed a desire to obtain
and use the spectrum to provide mobile voice/dispatch service akin to
Nextel's.[^89]

### Analysis of Public Interest Benefits

44 We find that this transaction should produce relatively small but
clear public benefits. First, assignment of the Consent Decree licenses
to the Creditors and of the non-Consent Decree licenses to Nextel will
move idle assets into productive use more quickly than would otherwise
be possible. Furthermore, this transaction will shift these assets
toward their highest valued use, facilitated by the Commission's rules
permitting a variety of uses, as well as reflecting Nextel's high bid
for the Geotek licenses.[^90]

45 With respect to the assignment of the non-Consent Decree licenses to
Nextel, Nextel claims that its acquisition of Geotek spectrum will
generate numerous other specific public interest benefits. Nextel
contends that the transaction will enable it to compete better with
cellular and PCS carriers by extending the availability of and lowering
prices for its bundled service offering, as well as encouraging service
innovation.[^91] It claims the transaction will enhance efficiency by
allowing Nextel to assemble fragmented SMR spectrum,[^92] and argues
that it will expand geographic coverage, increase network capacity, and
enable it to realize cost-economies.[^93] Petitioners respond by
claiming that Nextel's acquisition of these 900 MHz licenses will add
little to CMRS competition because the 45 MHz spectrum cap is driving
the growth of CMRS competition, not Nextel.[^94]

46 We find that there are public interest benefits to this transaction.
For example, as stated earlier, this acquisition should have
pro-competitive effects in mobile voice markets.[^95] Moreover, because
Nextel has a national footprint and is one of a limited number of firms
that can provide nationwide service over its own network, it likely can
provide a bigger pro-competitive impact in mobile voice markets than
other prospective buyers of the Geotek licenses.[^96] In addition, while
Nextel will be acquiring a small amount of spectrum in absolute terms,
the Geotek licenses would constitute, on average, a roughly 10 percent
capacity increase for Nextel in non-Consent Decree markets. This will
still leave it well short of the amount its chief rivals hold
(typically, 25-30 MHz, and some cellular and PCS carriers control up to
the 45 MHz limit (55 MHz in rural areas) permitted under the CMRS
spectrum cap rule). Thus, we find it credible that this capacity will
enable Nextel to achieve, in some measure, operational economies already
enjoyed by its competitors.

47 Petitioners argue that Nextel's premium pricing has exerted little
downward pressure on prices for mobile phone service. We disagree,
noting in particular Nextel's early introduction of per-second billing,
and its elimination of roaming and long distance charges. Moreover,
because these services are differentiated, direct price comparisons do
not constitute a meaningful basis for assessing the competitive impact
of a product offering.

48 Finally, regarding the trunked dispatch market, it is also true that
this acquisition should produce public interest benefits by introducing
new capacity, which in turn will allow possible price decreases, output
increases, or a combination of these effects. These benefits are likely
to be smaller in the trunked dispatch market, since this market is
smaller and the addition to capacity is being acquired by the firm
dominating the market. Nonetheless, the effect is positive. Further,
arguments that other purchasers of the Geotek licenses might provide
even greater public interest benefits are not relevant. Under our
statutory framework, we do not consider the relative merits of
alternative, hypothetical transactions.[^97]

## Conclusion

49 We find that there is not likely to be any competitive harm from
permitting either the assignment of all of the licenses -- both Consent
Decree and non-Consent Decree -- to the Creditors or the further
assignment of the non-Consent Decree licenses to a subsidiary of Nextel.
We find that the proposed transaction is not likely to cause competitive
harm in either mobile voice or dispatch markets. In addition, we find
that there should be significant competitive and other public interest
benefits, including moving idle assets into productive use. Therefore,
on balance, we find that the proposed transaction is in the public
interest.

50 Finally, we note that we are not today reaching any conclusions
concerning assessments that we may need to make in the future of a
proposed transfer or assignment of the Consent Decree market licenses
from the Creditors to another party. Our analysis of such a future
proposed transaction may differ from that in this Order if we determine
that competitive conditions differ in the Consent Decree cities, that
competitive conditions generally have changed, or that new evidence
compels another result.

#  Ordering clauses

51 ACCORDINGLY, IT IS ORDERED, pursuant to sections 4(i) and (j), 309,
and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§
154(i), 154(j), 309, and 310(d), that the Petition to Deny and/or
Designate for Hearing filed by Hugh P. Taylor, the Petition to Deny
filed by Chadmoore Wireless Group, Inc., the Petition to Deny filed by
the Alliance for Radio Competition, the Petition to Deny of Southern
Communications Services, Inc., the Petition to Deny filed by Mobex
Communications, Inc., and the supporting pleadings of each in this
matter ARE DENIED.

52 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 154(i), 154(j), 309, 310(d), that the applications referenced above
filed by various subsidiaries and affiliates of Geotek Communications,
Inc. to assign licenses to Wilmington Trust Company or to Hughes
Electronics Corporation in the above-captioned proceeding ARE GRANTED.

53 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 154(i), 154(j), 309, 310(d), that, with the exception of those
licenses for markets covered by the Nextel Consent Decree, the
applications referenced above for consent to assign certain licenses
from Wilmington Trust Company to FCI 900, Inc. ARE GRANTED.

54 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 154(i), 154(j), 309, 310(d), that, with the exception of those
licenses for markets covered by the Nextel Consent Decree, the
applications referenced above for consent to assign certain licenses
from Hughes Electronics Corporation to FCI 900, Inc. ARE GRANTED.

55 IT IS FURTHER ORDERED, pursuant to sections 4(i) and (j), 309, and
310(d) of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 154(i), 154(j), 309, 310(d), that the December 17, 1999, request of
Nextel Communications, Inc. to withdraw applications for consent to
acquire licenses in markets covered by the Nextel Consent Decree IS
GRANTED.

56 This action is taken on delegated authority under section 0.331 of
the Commission's rules, 47 C.F.R. § 0.331.

FEDERAL COMMUNICATIONS COMMISSION

Thomas J. Sugrue

Chief, Wireless Telecommunications Bureau

APPENDIX A

Parties Filing Petitions to Deny or Comments

Alliance for Radio Competition

Chadmoore Wireless Group, Inc.

Mobex Communications, Inc.

Radio Communications Systems, Inc.

Southern Communications Services, Inc.

Hugh P. Taylor, Esq.

Parties Filing Oppositions

Geotek Communications, Inc.

Nextel Communications, Inc.

Hughes Network Systems and Wilmington Trust Company (jointly)

Parties Filing Replies or Responses

Alliance for Radio Competition

Mobex Communications, Inc.

Southern Communications Services, Inc.

Hugh P. Taylor, Esq.

[^1]: *See* FCC Prepared to Award 900 MHz MTA Licenses Additional
    Payment Due By July 8, 1996, 11 FCC Rcd 7701 (WTB 1996).

[^2]: 11 U.S.C. § 101 *et seq.*

[^3]: On August 27, 1999, subsequent to the filings before us, the
    Bankruptcy Court approved a plan of liquidation, and the bankruptcy
    proceeding remains pending.

[^4]: 47 U.S.C. § 310(d).

[^5]: Amendment to Applications of Hughes Electronics Corporation for
    Consent to Assign Licenses to FCI 900, Inc., filed March 31, 1999
    ("Nextel Public Interest Statement") at 2, 4.

[^6]: In the Matter of 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, 14 FCC Rcd 10,145, 10,176 ¶ 32 ("*Fourth CMRS Competition
    Report*") (citing *Nextel Reports 1998 Results*, News Release,
    Nextel Communications, Inc., Feb. 23, 1999).

[^7]: 47 C.F.R. § 0.331.

[^8]: *See* Geotek Communications Inc. Seeks FCC Consent to Assign 900
    MHz SMR Licenses*, Public Notice*, DA 99-1027 (rel. May 28, 1999).

[^9]: *See* Petition to Deny, filed June 28, 1999, by Alliance for Radio
    Competition ("ARC Petition"); Petition to Deny of Southern
    Communications Services, Inc., filed June 28, 1999 ("Southern
    Petition"); Petition to Deny, filed June 28, 1999, by Mobex
    Communications, Inc. ("Mobex Petition").

[^10]: *See* ARC Petition; Mobex Petition; Southern Petition; Petition
    to Deny, filed June 28, 1999, by Chadmoore Wireless Group, Inc.;
    Comments of Radio Communications Systems, Inc., filed June 28, 1999
    ("RCS Comments") (collectively, "Petitioners").

[^11]: *See* *United States v. Motorola, Inc. and Nextel Communications,
    Inc.*, 1995 WL 866794 \*3 (D.D.C. 1995) ("*United States v.
    Motorola")*. Specifically, the Consent Decree enjoins Nextel, *inter
    alia*, from holding or acquiring licenses for more than thirty 900
    MHz channels in Boston, Massachusetts; Chicago, Illinois; Dallas and
    Houston, Texas; Denver, Colorado; Los Angeles and San Francisco,
    California; Miami and Orlando, Florida; New York, New York;
    Philadelphia, Pennsylvania; and Washington, D.C. In addition, Nextel
    is enjoined from holding or acquiring licenses for more than ten 900
    MHz channels in Detroit, Michigan and Seattle, Washington, and from
    acquiring additional channels in Atlanta, Georgia. Further, Nextel
    is prohibited from holding or acquiring, either directly or
    indirectly, more than a five percent ownership interest in any
    corporation or entity that owns, controls, or manages, directly or
    indirectly, 900 MHz channels in these cities and from entering into
    new management agreements for 900 MHz channels in these cities.
    *Id.*

[^12]: *United States v. Motorola*, Civ No. 94-2331 (TFH),
    *Memorializing Order* (D.D.C. Dec. 16, 1999).

[^13]: *See* Letter to Terry Fishel, Deputy Chief, Licensing and
    Technical Analysis Branch, FCC, from James Wheaten, Manager,
    Compliance, Nextel, dated February 17, 1999.

[^14]: 47 U.S.C. § 310(d).

[^15]: Section 310(d) provides that the Commission shall consider any
    such applications "as if the proposed transferee or assignee were
    making application under Section 308 for the permit or license in
    question." Furthermore, the Commission is expressly barred from
    considering "whether the public interest, convenience, and necessity
    might be served by the transfer, assignment, or disposal of the
    permit or license to a person other than the proposed transferee or
    assignee." 47 U.S.C. § 310(d).

[^16]: *Applications of Ameritech Corp. and SBC Communications Inc. for
    Transfer of Control*, CC Docket No. 98-141, FCC 99-279, at ¶¶ 46-49
    (rel. Oct. 8, 1999) ("*SBC-Ameritech Order*"); *Applications of
    WorldCom, Inc. and MCI Communications Corporation for Transfer of
    Control*, CC Docket No. 97-211, Memorandum Opinion and Order, 13 FCC
    Rcd 18,025, 18,030-33, ¶¶ 9-12 (1998) ("*WorldCom/MCI Order*"). The
    Commission also has independent authority under Sections 7 and 11 of
    the Clayton Act to disapprove the acquisition of common carriers
    engaged in wire or radio communications or radio transmissions of
    energy in any line of commerce in any section of the country where
    the effects of such an acquisition may substantially lessen
    competition, or tend to create a monopoly. 15 U.S.C. §§ 18, 21(a).
    The Bureau, acting pursuant to delegated authority, 47 C.F.R. §
    0.331, chooses not to exercise its statutory authority under the
    Clayton Act in this case because the Commission's jurisdiction under
    the Communications Act is sufficient to address all questions
    regarding the competitive effects of the proposed assignments,
    including the issue of whether the assignment may substantially
    lessen competition or tend to create a monopoly. *See, e.g., Craig
    O. McCaw and American Telephone and Telegraph Company,* 9 FCC Rcd
    5836 (1994), *recon. denied on other grounds, Memorandum Opinion and
    Order on Reconsideration,* 10 FCC Rcd 11,786 (1995), *aff\'d sub
    nom. SBC Communications, Inc. v. FCC*, 56 F.3d 1484 (D.C. Cir.
    1995).

[^17]: *Satellite Business Systems*, 62 F.C.C.2d 997, 1069, 1088 (1977),
    *aff'd. sub nom. United States v. FCC*, 652 F.2d 72 (D.C. Cir. 1980)
    (*en banc*); *SBC-Ameritech Order* FCC 99-279 at ¶ 49.

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

[^19]: *SBC-Ameritech* Order, FCC 99-279 at ¶ 49; *Bell Atlantic-NYNEX
    Order*, 12 FCC Rcd at 20,063 ¶ 158*; Applications of MCI
    Communications Corporation and British Telecommunications P.L.C.*,
    12 FCC Rcd 15,351, 15,367 ¶ 33 (1997) ("*BT-MCI Order*").

[^20]: *WorldCom/MCI Order*, 13 FCC Rcd at 18,031 ¶ 10 n.33 (citing 47
    U.S.C. § 309(e) (burdens of proceeding and proof rest with the
    applicant)) and *LeFlore Broadcasting Co., Inc.*, Docket No. 20026,
    *Initial Decision*, 66 F.C.C.2d 734, 736-37 ¶¶ 2-3 (1975) (burden of
    proof is on licensee on issue of whether applicants have the
    requisite qualifications to be or to remain Commission licensees and
    whether grant of applications would serve public interest,
    convenience and necessity).

[^21]: *Bell Atlantic-NYNEX Order,* 12 FCC Rcd at 20,001, 20,007, ¶¶ 29,
    36; *BT-MCI Order,* 12 FCC Rcd at 15,367, ¶ 33.

[^22]: *Bell Atlantic-NYNEX Order*, 12 FCC Rcd at 20,063, ¶ 157.

[^23]: *SBC-Ameritech Order*, FCC 99-279, ¶ 48.

[^24]: *See Mobilemedia Corporation et al.,* FCC 99-15 (rel. Feb. 5,
    1999) (citing *Jefferson Radio Co. v. FCC,* 340 F.2d 781, 783 (D.C.
    Cir. 1964)); s*ee also* Stephen F. Sewell, "Assignments and
    Transfers of Control of FCC Authorizations Under Section 310(d) of
    the Communications Act of 1934," 43 Fed. Comm. L.J. 277, 339-40
    (1991) ("*Sewell Article")*. The policy of not approving assignments
    or transfers when issues regarding the licensee's basic
    qualifications remain unresolved is designed to prevent licensees
    from evading responsibility for misdeeds committed during the
    license period. *Id.*

[^25]: *See* In re applications of AirTouch Communications, Inc. and
    Vodafone Group, Plc, *Memorandum Opinion and Order*, DA 99-1200,
    1999 WL 413,237 (rel. June 22, 1999) at ¶¶ 5-9 ("*AirTouch Vodafone
    Order*").

[^26]: Petition to Deny and/or Designate for Hearing, filed June 28,
    1999, by Hugh P. Taylor, at 7 ("Taylor Petition").

[^27]: *Id.* at 23, 36.

[^28]: *See, generally, id.*

[^29]: Opposition to Petition to Deny, filed by Geotek Communications,
    Inc., at 4 ("Geotek Opposition").

[^30]: *Id.* at 5-6.

[^31]: *Id.* at Exhibit B (Declaration of Michael C. Neus, Assistant
    General Counsel of Soros Fund Management LLC) ("Neus Declaration").

[^32]: *Id.* at 8 (citing *Public Notice*, FCC Announces Grant of 900
    MHz Specialized Mobile Radio MTA Licenses, DA 96-1282 (rel. Aug. 12,
    1996)).

[^33]: Geotek Opposition at 7.

[^34]: *Id.* at 8 (quoting In the Matter of Amendment of Parts 2 and 90
    of the Commission's Rules to Provide for the Use of 200 Channels
    Outside the Designated Filing Areas in the 896-901 MHz and the
    935-940 MHz Bands Allotted to the Specialized Mobile Radio Pool,
    Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, Implementation of Section 3(n) and 322 of the
    Communications Act, *Second Report and Order and Second Further
    Notice of Proposed Rule Making,* 10 FCC Rcd 6884, ¶ 57 (1995)
    ("*Second CMRS Report and Order"*)).

[^35]: Geotek Opposition at 9.

[^36]: *See* 47 U.S.C. § 309(d); *see also Sewell Article,* 43 Fed.
    Comm. L.J. at 292.

[^37]: Geotek Opposition at 9 at Neus Declaration.

[^38]: Stations WNPS264 and WNMO982 were constructed and placed into
    operation by June 27, 1997, within the four-year period granted to
    Geotek (formerly PowerSpectrum, Inc.) by the ruling In the Matter of
    PowerSpectrum, Inc., Request for Rule Waiver, *Order*, 8 FCC Rcd
    4452 (Private Radio Bureau 1993).

[^39]: Station WNJA893 is in a DFA encompassed by MTA license KNNX235.
    The Bureau granted Geotek a waiver of its three-year filing
    requirement for its MTA licenses. *See* In the Matter of Geotek
    Communications, Inc., *Order*, DA 99-1565 (Wireless
    Telecommunications Bureau rel. Aug. 9, 1999).

[^40]: *Second CMRS Report and Order*, 10 FCC Rcd 6884, ¶ 57 (1995).

[^41]: *See AirTouch Vodafone Order*, 1999 Wl 413,237 at ¶ 6.

[^42]: ARC Petition at 12; Southern Petition at 15; Reply of Southern
    Communications Services, Inc. to Oppositions to Petitions to Deny,
    filed July 30, 1999, at 2-4 ("Southern Reply"); Reply to Oppositions
    to Petitions to Deny, filed July 30, 1999 by Mobex Communications,
    Inc., at 13 ("Mobex Reply").

[^43]: Southern Reply at 2-4.

[^44]: Mobex Reply at 13; ARC Petition at 12; Southern Petition at 15;
    Southern Reply at 3.

[^45]: Joint Opposition of Hughes Network Systems and Wilmington Trust
    Company to Petitions to Deny, filed July 15, 1999, at 6 ("Creditors'
    Opposition").

[^46]: *Id.*

[^47]: *Ex Parte* Letter from Veronica M. Ahern, Nixon Peabody LLP,
    Counsel for Wilmington Trust Company, to Magalie R. Salas,
    Secretary, Federal Communications Commission, filed Oct. 29, 1999.

[^48]: *Id.*

[^49]: We note that the vast majority of wireless licensees operate
    for-profit ventures using their licenses, and maximizing profits and
    returns are, no doubt, a high-ranking objective of these operators.
    We do not agree with Southern that consenting to an assignment to
    the Creditors is tantamount to granting the Creditors an
    impermissible security interest in the licenses. *See* Southern
    Reply at 4 (citing *Tak Communications,* 138 B.R. 568 (W.D. Wisc.
    1992), *aff'd*, 985 F.2d 916 (7^th^ Cir. 1995). The Creditors seek
    consent to become the licensee, which is quite different from
    seeking an automatic (or near automatic) right to foreclose on the
    license to satisfy a debt.

[^50]: We note that the Creditors have filed a request for waiver of the
    build-out requirements pertaining to these licenses, seeking to
    restart the build-out timeline on the date the Commission acts on
    the proposed assignment of the Licenses from Geotek to the
    Creditors. *See* Request for Waiver With Respect to Certain 900 MHz
    MTA-based SMR Licenses Held by Affiliates of Geotek Communications,
    Inc., Debtor-in-Possession, Its Subsidiaries and Affiliates, filed
    June 18, 1999, by Wilmington and Hughes. This request was placed on
    Public Notice on June 30, 1999 and remains pending. *See* Wireless
    Telecommunications Bureau Seeks Comment On A Request For Waiver Of
    The Coverage Requirements For 900 MHz SMR Licensees Filed By Geotek
    Communications, Inc. and Hughes Network Systems, *Public Notice*, 14
    FCC Rcd 11,216 (WTB 1999). We will address the Creditors' request in
    a subsequent order.

[^51]: ARC Petition at 5-6; Mobex Petition at 5-6; Mobex Reply at 2-5.

[^52]: ARC Petition at 5-6; Mobex Petition at 5-6; Mobex Reply at 2-5.
    Mobex and ARC base their allegations on a comparison between the
    number of licenses held by Nextel and Motorola at the time of the
    Nextel Consent Decree and the number of 900 MHz licenses currently
    held by Nextel, based on the petitioners' review of the Commission's
    public database. ARC Petition at 5-6; Mobex Petition at 5-6; Mobex
    Reply at 2-5.

[^53]: Opposition to Petition to Deny, filed July 15, 1999, by Nextel
    Communications, Inc. at 27 ("Nextel Opposition").

[^54]: *Id*.

[^55]: In re Application of Motorola SMR, Inc. 900 MHz SMR Authorization
    New York MTA, *Memorandum Opinion and Order*, DA 97-950, at ¶ 7
    (rel. May 7, 1997).

[^56]: Response of the United States to Public Comments on the Proposed
    Modified Consent Decree, *U.S. v. Motorola*, filed Aug. 26, 1999
    ("DOJ Response") at 30-34. DOJ found that Mobex's and ARC's
    allegations reflected a misunderstanding of the scope of the Nextel
    Consent Decree's restrictions limiting Nextel's 900 MHz holdings.
    *Id*.

[^57]: Nextel Public Interest Statement at 16.

[^58]: Response to the Opposition of Nextel Communications, Inc. to
    Petitions to Deny, filed July 30, 1999, by Alliance for Radio
    Competition ("ARC Response"), Exhibit 2 (Affidavit of A. Daniel
    Kelley and Alan J. Boyer Affidavit) at ¶ 14 ("Kelley and Boyer
    Affidavit"); RCS Comments at 5-6; Southern Petition at 8-10; Mobex
    Reply at 5-6; ARC Petition at 7.

[^59]: Nextel Public Interest Statement at 5.

[^60]: Pittencrieff Communications, Inc., Transferor, and Nextel
    Communications, Inc., Transferee, For Consent to Transfer Control of
    Pittencrieff Communications, Inc. and its Subsidiaries, *Memorandum
    Opinion and Order,* 13 FCC Rcd 8935 (WTB 1997) ("*Pittencrieff*")*.*

[^61]: Nextel Public Interest Statement at 5-6.

[^62]: *Pittencrieff*, 13 FCC Rcd at 8946, 8948, 8953, ¶¶ 24, 30, 42-43.

[^63]: We have used the term "mobile voice" to make clear that mobile
    data services are not included.

[^64]: We also determine that for purposes of this proceeding, the
    relevant geographic markets are primarily local, consistent with the
    Bureau's findings in *Pittencrieff* with respect to dispatch
    services, and with all recent Bureau reviews of mergers with respect
    to mobile voice services. *See, generally,* In re Applications of
    Vanguard Cellular Systems, Inc. and Winston, Inc., *Memorandum
    Opinion and Order*, 14 FCC Rcd 3844 (WTB 1999); 360° Communications
    Company and ALLTEL Corporation, *Memorandum Opinion and Order*, 14
    FCC Rcd 2005 (WTB 1998).

[^65]: Direct Connect^®^ provides Nextel customers with a variety of
    options for push-to-talk communications.

[^66]: *See* 47 C.F.R. § 20.6.

[^67]: Kelley and Boyer Affidavit at ¶ 18.

[^68]: 47 C.F.R. § 20.6(b).

[^69]: *Pittencrieff*, 13 FCC Rcd at 8954, 8956 ¶¶ 45, 48; *see also
    Fourth CMRS Competition Report*, 14 FCC Rcd at 10,172-80.

[^70]: According to one analyst, Nextel holds at least 11 MHz of
    spectrum throughout the United States, has 15 MHz in most urban
    markets, and up to 20 MHz in selected cities. Warburg Dillon Read,
    Wireless Securities: Nextel Communications, Inc. (August 2, 1999) at
    10.

[^71]: Southern Reply at 11; Mobex Petition at 6-8; Mobex Reply at 5-6;
    ARC Petition at 8-10; ARC Response at 10-13; RCS Comments at 12-15
    (RCS's analysis limited to the Louisville, KY and Lexington, KY
    markets).

[^72]: Mobex Petition at 7; Mobex Reply at 6; ARC Petition at 8-9.

[^73]: DOJ Response at 8-9. We agree with DOJ's conclusion that
    concentration in the relevant markets, based on recent marketplace
    developments, is likely to be mitigated by other significant entry.

[^74]: *Pittencrieff*, 13 FCC Rcd 8948-49, at ¶ 30.

[^75]: DOJ Response at 8.

[^76]: RCS Comments at 12-15; Mobex Reply at 6; ARC Petition at 8; ARC
    Response at 10-12. Kelley and Boyer also allege that Nextel's
    dominant position in dispatch services may enable Nextel to induce
    some consumers to buy bundled service in order to get dispatch.
    Kelley and Boyer Affidavit at ¶¶ 45, 46. We find this implausible.
    Consumers of trunked dispatch services will have alternatives to the
    bundled product offered by Nextel. Other providers of trunked
    dispatch will continue to exist; none is being acquired by Nextel
    here. These firms generally offer trunked dispatch unbundled with
    mobile voice, and they can expand this offering if there is demand
    to justify expansion. Moreover, as we explain below, for at least
    some users of trunked dispatch service, traditional dispatch or
    private dispatch will be close substitutes and constitute
    competitive constraints on the market power of Nextel. *See also*
    Mobex Reply at 8-9; ARC Response at 8-9.

[^77]: *See, generally,* Kelley and Boyer Affidavit. We also believe
    that petitioners' HHIs overstate concentration to the extent they
    are based solely on spectrum holdings in the 220, 800, and 900 MHz
    bands. *See infra* ¶ 32.

[^78]: DOJ Response at 9-10.

[^79]: DOJ Response at 9-11. DOJ notes that it expects some cellular and
    PCS carriers to implement such technologies within the next 12-18
    months, and expects others to do so over a somewhat longer period of
    time. *Id.* at 11.

[^80]: *Ex Parte* Letter from Lauren H. Kravetz, Commercial Wireless
    Division, to Magalie Roman Salas, Secretary, Federal Communications
    Commission, filed Nov. 2, 1999 ("CWD *Ex Parte* Filing") at 1.

[^81]: *See* Amendment of the Commission's Rules to Permit Flexible
    Service Offerings in the Commercial Mobile Radio Services, WT Docket
    No. 96-6, *First Report and Order and Further Notice of Proposed
    Rulemaking*, 11 FCC Rcd 8965 (1996).

[^82]: DOJ Response at 9, 11-12.

[^83]: Kelley and Boyer Affidavit at ¶ 35; Mobex Petition at 9; Mobex
    Reply at 11-12.

[^84]: Kelley and Boyer Affidavit at ¶ 34.

[^85]: CWD *Ex Parte* Filing at 2.

[^86]: *Id.*

[^87]: *The State of SMR and Digital Mobile Radio:* 1998, The Strategis
    Group, at 109.

[^88]: RCS Comments at 7-15; Southern Reply at 8-9; Mobex Petition at
    6-8; ARC Response at 10-13.

[^89]: Mobex Reply at 7; Southern Petition at 4-6.

[^90]: *See also LaRose v. FCC*, 494 F.2d 1145 (D.C. Cir. 1974)(holding
    that the Commission, in evaluating the public interest of action
    involving a bankrupt licensee, should consider the effect of its
    actions on the licensee's innocent creditors).

[^91]: Nextel Public Interest Statement at 14-15.

[^92]: *Id.* at 14.

[^93]: *Id.* at 15*.*

[^94]: Kelley and Boyer Affidavit at ¶ 17.

[^95]: *See, infra,* ¶ 46.

[^96]: Nextel's competitive presence has become quite significant, with
    over 4 million subscribers as of the third quarter of 1999. Nextel
    is one of only three firms that can offer mobile voice services
    throughout much of the nation using its own facilities. For business
    customers in particular, consumers have benefited from the savings
    that its entry into the mobile voice market has produced through
    price competition, but its distinctive service offering has also
    produced significant consumer welfare benefits.

[^97]: *See* 47 U.S.C. § 310(d)("\[T\]he Commission may not consider
    whether the public interest, convenience, and necessity might be
    served by the transfer, assignment or disposal of the permit or
    license to a person other than the proposed transferee or
    assignee.")