Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of )

)

ARCH COMMUNICATIONS GROUP, INC. ) WT Docket No. 99-365

)

and ) File No. 0000053846, *et al.*

) DA 99-3028

PAGING NETWORK, INC. )

)

For Consent to Transfer Control of Paging, )

Narrowband PCS, and Other Licenses )

**MEMORANDUM OPINION AND ORDER**

**Adopted: April 25, 2000 Released: April 25, 2000**

By the Chief, Wireless Telecommunications Bureau:

TABLE OF CONTENTS

Paragraph

I. INTRODUCTION [2](#introduction)

II\. BACKGROUND [2](#background)

III\. Discussion [4](#discussion)

A. Statutory Authority [4](#statutory-authority)

B. Qualifications [5](#qualifications)

C. Public Interest Analysis [6](#public-interest-analysis)

1\. Competitive Framework [7](#competitive-framework)

2\. Analysis of Potential Adverse Effects
[7](#analysis-of-potential-adverse-effects)

3\. Analysis of Public Interest Benefits
[9](#analysis-of-public-interest-benefits)

D. Narrowband PCS Multiple Ownership Restriction
[10](#narrowband-pcs-multiple-ownership-restriction)

E. Conclusion [12](#conclusion)

IV\. Ordering clauses [12](#ordering-clauses)

APPENDIX A

#  INTRODUCTION

1 In this Order, we grant the applications of Arch Communications Group,
Inc. ("Arch") and Paging Network, Inc. ("PageNet") (the "Applicants") to
transfer control of the licenses of each company to effectuate a merger
between the two companies. We also grant the Applicants a temporary
waiver of the narrowband PCS ownership restriction.

#  BACKGROUND

2 Arch, the second largest U.S. paging carrier, is a provider of local,
regional, and national paging services over digital networks in all 50
states. It operates paging facilities in more than 180 of the 200 most
populated markets in the country, and its networks cover approximately
85 percent of the United States population. Arch offers several types of
paging services: tone-only paging; tone-plus-voice paging; numeric
paging (also known as digital display); alphanumeric paging (also known
as text messaging); guaranteed messaging; and two-way messaging.[^1] As
of September 30, 1999, Arch had 7.2 million paging units in service.[^2]

3 PageNet, the largest U.S. paging carrier, also offers local, regional,
and nationwide coverage in all 50 states, plus the District of Columbia,
U.S. Virgin Islands, and Puerto Rico. It has facilities-based services
in all 100 of the most populated metropolitan markets in the country.
PageNet's paging services include: numeric paging; alphanumeric

paging; advanced messaging over one-way and two-way wireless networks;
and content and information services. As of September 30, 1999, PageNet
had approximately 9.3 million paging units in service.[^3]

4 On December 13, 1999, Arch and PageNet filed applications pursuant to
Section 310(d) of the Communications Act,[^4] requesting Commission
consent for the transfer of control of the licenses and authorizations
of each company to a newly constituted, post-merger Arch ("New Arch")
and a waiver of the narrowband PCS ownership restriction. New Arch would
be controlled by a new, widely-dispersed group of investors that
includes Arch's existing shareholders, certain of its bondholders,
PageNet's stockholders, and PageNet's bondholders.[^5] Under the terms
of the proposed transaction, both current Arch and current PageNet
stockholders and bondholders would receive stock in New Arch. When
completed, the transaction would result in: (1) the transfer of control
of PageNet from its current stockholders to New Arch; (2) the transfer
of control of Arch from its current stockholders to New Arch; and (3)
the *pro forma* transfer of control and/or assignment of all of
PageNet's licenses to a new, wholly-owned, indirect subsidiary of New
Arch to be called PageNet Holdings, Inc.[^6] The licenses and
authorizations currently held by Arch licensee subsidiaries would
continue to be held by these same entities but would be controlled by
New Arch.[^7]

5 On December 30, 1999, by delegated authority,[^8] the Wireless
Telecommunications Bureau ("Bureau") issued a *Public Notice* announcing
that Arch's and PageNet's applications had been accepted for filing and
establishing a pleading cycle to enable interested parties to comment on
the proposed transaction.[^9] Two parties, Mobile Phone of Texas, Inc.
("Mobile Phone") and Teletouch Licenses, Inc. ("Teletouch"), filed
petitions to deny; a third party, Metrocall, Inc. ("Metrocall"),
proffered comments.[^10] All three parties addressed the Applicants'
request for a waiver of the narrowband PCS ownership restriction; no
party has challenged the proposed transfers of control.

6 In their applications, the Applicants addressed PageNet's failing
financial situation and the possibility that the merger with Arch would
involve PageNet undergoing a pre-packaged Chapter 11 reorganization
proceeding.[^11] Since the applications were filed, PageNet has made
public other information concerning its difficult financial situation.
In January, PageNet informed the Securities and Exchange Commission of
the possibility that the company might not be able to sustain sufficient
cashflow to continue operating through the end of the first quarter of
2000.[^12] In addition, PageNet failed to make a scheduled February 1,
2000 interest payment on its debt.[^13] Recent public reports of
PageNet's failing financial condition also indicate significant employee
attrition and increasing loss of subscribers.[^14]

#  Discussion

7 As explained below, we find that the proposed transferee, New Arch, is
fully qualified to hold the licenses as proposed and that the transfer
of control of the licenses does not pose an undue risk of harm to
competition in U.S. telecommunications markets. In addition, we find
that this transaction should result in certain public benefits.
Accordingly, we conclude that, pursuant to section 310(d) of the
Communications Act, grant of the pending applications will serve the
public interest. Hence, we deny the petitions and grant the
applications.[^15]

## Statutory Authority

8 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."[^16] Section 310(d) also requires the
Commission to consider a 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.[^17]

9 In applying the public interest test under Section 310(d), the
Commission considers four overriding questions: (1) whether the
transaction would result in a violation of the Act or any other
applicable statutory provision; (2) whether the transaction would result
in a violation of Commission rules; (3) whether the transaction would
substantially frustrate or impair the Commission\'s implementation or
enforcement of the Act or interfere with the objectives of that and
other statutes; and (4) whether the transaction promises to yield
affirmative public interest benefits.[^18] In summary, the Applicants
bear the burden of demonstrating that the transaction will not violate
or interfere with the objectives of the Act or Commission rules, and
that the predominant effect of the transaction will be to advance the
public interest.[^19] Prior to approving the applications, we must
determine whether the Applicants have met this burden.[^20]

## Qualifications

10 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
its basic qualifications have been designated for hearing by the
Commission or

have been sufficiently raised in petitions to warrant the designation of
a hearing.[^21] By contrast, as a regular part of our public interest
analysis, we determine whether the proposed assignee or transferee is
qualified to hold Commission licenses.[^22]

11 In this case, no petitioner challenges the basic qualifications of
either Arch or PageNet as reason why we should not consent to these
transfers of control.[^23] In addition, we do not find any independent
reason to examine further the parties' basic qualifications.

## Public Interest Analysis

12 In addition to ensuring that transferor and transferee 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 transfer of control.[^24] Under
Commission precedent,

our public interest analysis is informed by, but not limited to,
traditional antitrust principles.[^25] Our analysis encompasses the
broad aims of the Communications Act,[^26] and includes evaluating
whether any public interest benefits may result from the proposed
transaction.[^27]

### Competitive Framework

13 Our analysis of competitive effects under the Commission's public
interest standard consists of three steps. First, we determine the
markets potentially affected by the proposed transaction.[^28] Second,
we assess the effects that the transaction may have on competition in
these markets.[^29] Third, we consider whether the proposed transaction
will result in merger-specific public interest benefits.[^30]
Ultimately, we must weigh any harmful and beneficial effects to
determine whether, on balance, the merger is likely to enhance
competition in the relevant markets.

### Analysis of Potential Adverse Effects

14 We note first that no party has challenged this proposed transaction
on competitive grounds.[^31] Applicants submit that they participate in
a broad market for mobile communications services and that a distinct
traditional paging market no longer exists for purposes of competitive
analysis because of convergence among wireless communications
services.[^32] While we may share Applicants' views on convergence, we
do not at this time embrace their position that consumers regard a broad
array of mobile communications services as sufficiently close
substitutes to discipline the pricing of the services that Applicants
provide. Nevertheless, assuming without formally deciding that the
relevant product market in this case is traditional, one-way paging, we
find that there is credible evidence supporting Applicants' view that
this transaction will not enable the merged entity to behave in an
anticompetitive manner.

15 We recognize that Arch and PageNet are the nation's two largest
paging carriers. Were they to combine as proposed, the merged entity
would have about 16 million customers, or approximately 32 percent of
the traditional paging subscriber base nationwide.[^33] In some local
markets, we would expect the merged entity to have larger shares of this
business. However, the record also indicates that prices for traditional
paging services have continued to decline notwithstanding recent
industry consolidation.[^34] We also observe that, in addition to New
Arch, four other major paging carriers would remain post-merger in
twelve of the fourteen geographic areas in which this transaction will
most elevate spectrum concentration.[^35] In addition, paging carriers
face growing competition from short messaging services (SMS)[^36] and
other digital service features offered by an increasing number of mobile
voice carriers. Furthermore, evidence submitted in the record indicates
that competing paging carriers have excess spectrum capacity,[^37] which
appears to remove spectrum as a potential barrier to entry or the
expansion of sales by competing carriers. Finally, our recent auction of
spectrum in the 929-931 MHz band should facilitate further entry or
capacity expansion. Therefore, to the extent that this transaction
raises concerns regarding prospects for anticompetitive conduct arising
out of increased market concentration, we conclude that the above
factors in combination substantially mitigate those concerns.

### Analysis of Public Interest Benefits

16 We also examine the potential pro-competitive benefits attributable
to the transaction. Arch and PageNet contend that New Arch would provide
several pro-competitive and efficiency benefits.[^38] Specifically,
Applicants state that their merger would create a stronger, more
efficient, and more vigorous competitor in the mobile communications
marketplace by combining the complementary strengths of the pre-merger
entities, which include Arch's expertise in direct marketing and retail
distribution and PageNet's state-of-the-art billing system,
technologically advanced network, and leading role in the introduction
of advanced messaging services.[^39] Applicants claim that this
combination would give New Arch the ability to market a broad array of
both traditional and advanced services across direct, resale and retail
markets, as well as the breadth of assets, technology, marketing, and
managerial skills necessary to compete in the converging marketplace of
mobile wireless communications services in which other CMRS providers
now offer paging services.[^40] Applicants also claim that the larger
combined subscriber base would create incentives for manufacturers to
engage in research, development, and deployment of new equipment and a
broad array of new, innovative services.[^41]

17 We find that combining PageNet's technological leadership with Arch's
sales and marketing expertise -- as well as Arch's relative financial
stability -- is likely to lead to merger-specific benefits for the
public. In particular, while both companies hold narrowband PCS
licenses, PageNet has been a leader in attempts to develop the sort of
communications services for which the Commission intended this spectrum
when it was auctioned in 1994. The combination of PageNet's narrowband
operations with Arch's relative financial and marketing strength is
likely to result in faster and more robust development of narrowband PCS
services, which has been a goal of this Commission since that auction.
In that light, we also find credible that the merged entity will be
better positioned to introduce market innovations.

18 Applicants also note the companies' financial difficulties and
contend that the merger will provide benefits by creating a financially
stronger company better able to offer new products and services to its
customers and, generally, to compete in the mobile wireless
communications marketplace.[^42] We recognize the financial difficulties
that PageNet is experiencing, as well as the fact that consummation of
this transaction would ensure continuous service to millions of current
PageNet customers.[^43] While the proposed merger may not be the only
way to address these concerns, we nevertheless recognize as a legitimate
public interest benefit of the transaction the fact that this merger
offers the most immediate prospect that PageNet subscribers will enjoy
the continued availability of services. On the basis of this record,
therefore, we conclude that Applicants have furnished sufficient grounds
for us to conclude that this transaction will provide meaningful public
interest benefits.

## Narrowband PCS Multiple Ownership Restriction

19 Applicants request a temporary waiver of the Commission's narrowband
PCS ownership restriction,[^44] pending the outcome of an ongoing
rulemaking involving the narrowband PCS rules.[^45] The current Section
24.101(a) limits each narrowband PCS licensee to holding a five-percent
or greater ownership interest in no more than three of the 26 channels
in any geographic area.[^46] For the reasons discussed below, we grant
Applicants a temporary waiver of Section 24.101.

20 The proposed transfers of control would consolidate PageNet's two
50/50 kHz narrowband PCS networks and one unpaired 50 kHz channel with
Arch's two 50/12.5 kHz channels.[^47] Thus, as proposed, the merged
entity would hold a total of five narrowband PCS channels throughout the
nation.[^48] Applicants argue that waiver of the aggregation limit would
serve the public interest because the rule no longer serves its
underlying purpose of promoting competition, and its elimination would
promote competition in the emerging mobile wireless communications
market.[^49] In addition, Applicants assert that it would be inequitable
for the Commission to require them to comply with the ownership limit
prior to consummation of the proposed transaction given that the
Commission is considering modification of this rule in the *Narrowband
PCS Further Notice of Proposed Rulemaking*.[^50]

21 Mobile Phone, Teletouch and Metrocall each address the issue of the
Applicants' request for a temporary waiver of the narrowband PCS
ownership restriction. Mobile Phone and Teletouch contend that
Applicants have failed to establish a public interest justification to
support their waiver request.[^51] In particular, they argue that the
ownership limitation remains necessary for achieving competitive
markets, and they contest Applicants' assertions that the paging market
now competes directly with broadband CMRS services.[^52] Petitioners
also allege that, were the waiver granted, the consolidation of the
Applicants' businesses would give the combined company an unfair
economic advantage in the narrowband PCS market.[^53] Meanwhile,
Metrocall encourages the Commission to repeal the narrowband PCS
ownership restriction rather than waive it.[^54] Absent repeal of the
rule, Metrocall opposes granting Applicants' waiver request beyond
allowing them a reasonable time to divest sufficiently to comply with
the restriction.[^55]

22 We conclude that the applicants have not supported the grant of an
indefinite waiver of the narrowband PCS ownership restriction pending
outcome of the rulemaking. While the Applicants address whether the
underlying purpose of the narrowband PCS ownership restriction rule
would be served in this case by its strict application, their remaining
arguments largely address whether or not the rule should be retained at
all. Such arguments are relevant to the rulemaking itself and not to a
request to waive the rule for individual licensees.[^56] Thus, the
Applicants do not adequately present "unique or unusual factual
circumstances" warranting grant of an indefinite waiver. While we do
anticipate a decision in the narrowband PCS ownership restriction
rulemaking in the near future, we agree with Metrocall that, were we to
grant an indefinite waiver until that time, New Arch would have a
competitive advantage over other carriers who remain subject to the cap
during the pendency of the rulemaking.

23 However, we think that the circumstances do justify granting the
applicants a limited amount of additional time to come into compliance
with the narrowband PCS ownership restriction, a solution which, we
note, Metrocall also supports.[^57] Specifically, we grant Applicants
until 90 days after consummation of their merger to achieve compliance
with the ownership restrictions regarding narrowband PCS.

## Conclusion

24 We find that this transaction is likely to produce public interest
benefits. In addition, we conclude that any competitive risks
potentially arising from this transaction are likely to be mitigated in
a manner that appreciably limits our competitive concerns. On balance,
we therefore find that the proposed transaction is in the public
interest.

#  Ordering clauses

25 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, 310(d), that the Petition to Deny filed by Mobile
Phone of Texas, Inc. and the Petition to Deny filed by Teletouch
Licenses, Inc. in this matter ARE DENIED.

26 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 Arch Communications Group, Inc., Paging Network, Inc., and/or
the shareholders and/or affiliates of these companies in the
above-captioned proceeding to transfer control of Commission licenses
ARE GRANTED.

27 IT IS FURTHER ODERED, 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), and Section 1.925 of the Commission's
rules, 47 C.F.R. § 1.925, that the request of Arch Communications Group,
Inc. and Paging Network, Inc. for a waiver of Section 24.101(a) of the
Commission's rules, 47 C.F.R. § 24.101(a), is GRANTED in part and DENIED
in part, as described herein.

28 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

/s/

Thomas J. Sugrue

Chief, Wireless Telecommunications Bureau

APPENDIX A

Parties Filing Petitions to Deny

MobilePhone of Texas, Inc.

Teletouch Licenses, Inc.

Parties Filing Comments

Metrocall, Inc.

Parties Filing Oppositions

Arch Communications Group, Inc. and Paging Networks, Inc. (jointly)

Parties Filing Replies

Teletouch Licenses, Inc.

[^1]: Applications of Arch Communications Group, Inc. and Paging
    Network, Inc. for Transfers of Control, File No. 0000053846 (lead
    application), filed Dec. 13, 1999, Attachment 1 to Form 603 at 3
    ("Public Interest Statement"). Tone-only pagers emit a beep or
    vibrate to let the subscriber know a message has been received from
    a known source; tone-plus-voice pagers provide a brief voice message
    in addition to alerting the subscriber to a message; numeric pagers
    display a telephone number or numeric message; alphanumeric pagers
    allow the user to receive text messages; guaranteed messaging pagers
    permit the storage of incoming messages and automatically forward
    the message when the subscriber returns to a full service coverage
    area; two-way messaging pagers permit a user to send as well as
    receive messages. *The Strategis Group,The State of the U.S. paging
    Industry: 1997* (1997), at 48; *Arch Communications* (visited Apr.
    21, 2000) \<http://content.arch.com/products/services.html\>; *Arch
    Communications Advanced Paging* (visited Apr. 21, 2000)
    \<http://content.arch.com/products/advanced.html\>.

[^2]: *See* Public Interest Statement at 2-3.

[^3]: *Id.* at 2.

[^4]: 47 U.S.C. § 310(d).

[^5]: Public Interest Statement at 3-6.

[^6]: *Id.*

[^7]: *Id.*

[^8]: 47 C.F.R. § 0.331.

[^9]: *Public Notice*, "Arch Communications Group, Inc. and Paging
    Network, Inc. Seek FCC Consent for a Proposed Transfer of Control,"
    WT Docket No. 99-365, DA 99-3028 (rel. Dec. 30, 1999) ("*Public
    Notice*").

[^10]: *See generally* Petition to Deny, filed January 28, 2000, by
    Mobile Phone of Texas, Inc. ("Mobile Phone Petition"); Petition to
    Deny, filed January 28, 2000, by Teletouch Licenses, Inc.
    ("Teletouch Petition"); Comments of Metrocall, filed January 31,
    2000 ("Metrocall Comments").

[^11]: Public Interest Statement at 10.

[^12]: *See* Paging Network, Inc., SEC Form S-4, filed with the
    Securities and Exchange Commission on January 11, 2000, at 121-128
    (PageNet Management's Discussion and Analysis of Financial Condition
    and Results of Operations); *see also* Letter from Judith St.
    Ledger-Roty, Counsel for Paging Network, Inc., to Magalie Roman
    Salas, Secretary, Federal Communications Commission, dated March 23,
    2000.

[^13]: Letter from Kathryn A. Zachem and Kenneth D. Patrich, Counsel for
    Arch Communications Group, Inc., to Magalie Roman Salas, Secretary,
    Federal Communications Commission, dated March 20, 2000 ("*March 20
    Ex Parte Letter*").

[^14]: *Id.* In their *March 20 Ex Parte Letter*, the Applicants stated
    that, at the end of 1999, the number of PageNet units in service had
    dropped to 8.8 million, a decline of 500,000 during the fourth
    quarter of 1999.

[^15]: Arch and PageNet each hold Fixed Satellite Service and VSAT
    authorizations under Part 25 of the Commission's rules, 47 C.F.R.
    Part 25. *See Public Notice* at 7*.* The applications for transfer
    of control of these authorizations are not included in this Order
    and will be acted on by the International Bureau in a subsequent
    public notice.

[^16]: 47 U.S.C. § 310(d).

[^17]: 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." *Id.*

[^18]: *See Applications of Ameritech Corp. and SBC Communications Inc.
    for Transfer of Control,* CC Docket No. 98-141, Memorandum Opinion
    and Order, FCC 99-279, at ¶¶ 49-50 (rel. Oct. 8, 1999)
    ("*SBC/Ameritech Order*"); *Applications of WorldCom and MCI
    Communications Corporation,* 13 FCC Rcd 18,025, 18,030-33, ¶¶ 9-12
    ("*WorldCom/MCI Order*") (citing *Applications of NYNEX Corporation
    and Bell Atlantic Corporation*, Memorandum Opinion and Order, 12 FCC
    Rcd 19,985, 19,987 ¶ 2 & n.2 (1997) ("*Bell Atlantic/NYNEX
    Order*")); *Applications of MCI Communications Corporation and
    British Telecommunications P.L.C*, Memorandum Opinion and Order, 12
    FCC Rcd 15,351, 15,367 ¶ 33 (1997) ("*BT/MCI Order*").

[^19]: *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)).

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

[^21]: *See Mobilemedia Corporation, et al.,* 14 FCC RCd 8017 ¶ 4 (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). 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.*

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

[^23]: *See generally* Mobile Phone Petition; Teletouch Petition.

[^24]: *SBC/Ameritech Order*, FCC 99-279, at ¶¶ 46-49; *WorldCom/MCI
    Order*, 13 FCC Rcd at 18,030-33, ¶¶ 9-12. 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).

[^25]: *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.

[^26]: *WorldCom/MCI Order*, 13 FCC Rcd at 18,030 ¶ 9 (citing *Bell
    Atlantic/NYNEX* Order, 12 FCC Rcd at 19,987 ¶ 2 & n.2.

[^27]: *SBC-Ameritech* Order, FCC 99-279 at ¶ 49; *Bell Atlantic-NYNEX
    Order*, 12 FCC Rcd at 20,063 ¶ 158*; BT/MCI Order*, 12 FCC Rcd at
    15,367 ¶ 33.

[^28]: Our determination of the affected markets requires us to identify
    the Applicants' existing and potential product offerings, and may
    require us to determine which products offered by other firms
    compete or potentially compete with these offerings.

[^29]: Depending on circumstances, this step may include the
    identification of market participants and analysis of market
    structure, market concentration, and potential entry.

[^30]: These include but may extend beyond factors relating to cost
    reductions, productivity enhancements, or improved incentives for
    innovation*. See Bell Atlantic/NYNEX Order*, 12 FCC Rcd at 20,014, ¶
    49; *BT/MCI Order*, 12 FCC Rcd at 15,368, ¶ 35. *See also*
    Horizontal Merger Guidelines Issued by the U.S. Department of
    Justice and the Federal Trade Commission, 57 Fed. Reg. 41,552, §§
    2.1, 2.2, 4 (dated Apr. 2, 1992, as revised, Apr. 8, 1997) ("*Merger
    Guidelines*").

[^31]: The petitions of Mobile Phone and TeleTouch and the comments of
    Metrocall address only Applicants' request for a waiver of the
    narrowband PCS ownership restriction.

[^32]: Public Interest Statement at 11, 19.

[^33]: *Paging Network To Miss Interest Payments*, Dow Jones News
    Service, Jan. 27, 2000.

[^34]: *The Strategis Group, The State of the U.S. Paging Industry:
    1999* (1999), at 31, Table 4.2.

[^35]: Letter from Kathryn A. Zachem, Counsel for Arch Communications
    Group, Inc., to Magalie Roman Salas, Secretary, Federal
    Communications Commission, dated February 23, 2000, at Merged Entity
    Aggregate Channel Analysis pp. 1-15 ("*February 23 Ex Parte
    Letter*"). These 14 markets are Buffalo and Albany, NY; Birmingham,
    AL; Akron, Cincinnati, Cleveland, Columbus, Dayton, and Toledo, OH;
    Providence, RI; West Palm Beach and Miami, FL; and Boston and
    Worcester, MA. In Akron and Columbus, OH, three other major paging
    carriers would remain.

[^36]: SMS is a digital feature offered by some cellular, broadband PCS,
    and SMR carriers that permit users' handsets to include the
    functionality of one-way paging and messaging devices. Without
    deciding whether SMS should formally be considered, under the
    *Merger Guidelines*, as part of the paging market, our analysis
    indicates that the competitive effect of SMS on that market is
    roughly equivalent to a 10-12% reduction in market share.

[^37]: *February 23 Ex Parte Letter* at Capacity Analysis pp. 2-6.

[^38]: Public Interest Statement at 25-29.

[^39]: *See generally* *id.* at 26-28.

[^40]: *See id.*at 30. Applicants point to competitors such as AT&T,
    Bell Atlantic, Vodafone AirTouch, Nextel, and, potentially,
    MCI/WorldCom/Skytel/Sprint PCS. *Id.*

[^41]: *Id.* at 28.

[^42]: Public Interest Statement at 25, 28-29.

[^43]: *See supra* ¶ 6.

[^44]: Public Interest Statement at 38-51; Joint Opposition to Petitions
    to Deny and Reply to Comments, filed February 10, 2000, by Arch
    Communications Group, Inc. and Paging Network, Inc. ("Joint
    Opposition") at 7-9.

[^45]: *See Amendment of the Commission's Rules to Establish New
    Personal Communications Services, Narrowband PCS*, GEN Docket No.
    90-314, Report and Order and Further Notice of Proposed Rulemaking,
    12 FCC Rcd 12,972 (1997) ("*Narrowband PCS Further Notice of
    Proposed Rulemaking"*).

[^46]: 47 C.F.R. §§ 24.101(a), 24.129.

[^47]: Public Interest Statement at 38-39.

[^48]: *Id.*

[^49]: *Id.* at 39-46.

[^50]: Public Interest Statement at 46-48. Applicants note that several
    parties commenting on the *Narrowband PCS Further Notice of Proposed
    Rulemaking* advocated elimination of the aggregation cap. *Id.* at
    47-48, n. 78.

[^51]: Mobile Phone Petition at 3-4; Teletouch Petition at 3-4.

[^52]: Mobile Phone Petition at 4-9; Teletouch Petition at 4-9.

[^53]: Mobile Phone Petition at 2; Teletouch Petition at 2. We take the
    term "narrowband PCS market" to be synonymous with "paging market."

[^54]: Metrocall Comments at 2-4.

[^55]: *Id.* at 5.

[^56]: *See* 47 C.F.R. § 1.925(b)(3) (stating elements of showing
    required to support waiver request).

[^57]: Metrocall Comments at 5.