*Pages 1--24 from  Microsoft Word - 16448*
 Federal  Communications  Commission  DA  00-  89 
 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: 
1
 Federal  Communications  Commission  DA  00-  89 
 2 
 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  1.  Analysis  of  Potential  Public  Interest  Harms  ..............................................  12 
 a.  Competitive  Assessment    Consent  Decree  Markets  ....................  12  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 


 I.  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 
 Nextels  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 
2
 Federal  Communications  Commission  DA  00-  89 
 3 
 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. 


 II.  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,  Geoteks  creditors  selected  Nextel  from  among  the  bidders,  and,  on  February  16,  1999,  the  Bankruptcy  Court  entered  an  order 
 authorizing  the  sale  of  Geoteks  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  Geoteks  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 


 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). 
3
 Federal  Communications  Commission  DA  00-  89 
 4 
 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  Geoteks  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 


 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. 
4
 Federal  Communications  Commission  DA  00-  89 
 5 
 III.  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. 


 A.  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  Commissions  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 


 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 
5
 Federal  Communications  Commission  DA  00-  89 
 6 
 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 
 B.  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 


 its  statutory  authority  under  the  Clayton  Act  in  this  case  because  the  Commissions  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),  affd.  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. 
6
 Federal  Communications  Commission  DA  00-  89 
 7 
 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 
 1.  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.  Taylors  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)  Geoteks  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  IIIs  holding  in  Geotek,  and  this  interest  holder  was  disclosed 


 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));  see  also  Stephen  F.  Sewell,  Assignments  and  Transfers  of  Control  of  FCC  Authorizations  Under  Section  310(  d)  of  the  Communications  Act  of  1934,  43  Fed.  Comm.  L.  J.  277,  339-  40  (1991) 


 (  Sewell  Article).  The  policy  of  not  approving  assignments  or  transfers  when  issues  regarding  the  licensees  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. 
7
 Federal  Communications  Commission  DA  00-  89 
 8 
 in  Geoteks  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  Geoteks 
 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  Geoteks  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.  Taylors  petition  does  not  justify  either  denying  the  applications  or  designating  Geoteks  basic  qualifications  for  hearing.  36  Mr.  Taylors  filings, 
 while  voluminous,  do  not  raise  a  substantial  and  material  question  as  to  the  accuracy  of  Geoteks  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 


 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  Commissions  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. 
8
 Federal  Communications  Commission  DA  00-  89 
 9 
 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.  Taylors  petition. 


 2.  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 
 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). 
9
 Federal  Communications  Commission  DA  00-  89 
 10 
 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  Commissions  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. 


 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), 
 affd,  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. 
10
 Federal  Communications  Commission  DA  00-  89 
 11 
 3.  Qualifications  of  Nextel  to  Hold  the  Licenses 
 19.  Two  Petitioners  raise  questions  regarding  Nextels  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  Nextels  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  Commissions  rules  to  be  a  Commission  licensee,  and  we  deny  the  petitions  of  Mobex  and  ARC  on  this  issue. 


 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  Commissions 


 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  Mobexs  and  ARCs  allegations  reflected  a 


 misunderstanding  of  the  scope  of  the  Nextel  Consent  Decrees  restrictions  limiting  Nextels  900  MHz  holdings.  Id. 
11
 Federal  Communications  Commission  DA  00-  89 
 12 
 C.  Public  Interest  Impacts 
 1.  Analysis  of  Potential  Public  Interest  Harms 
 a.  Competitive  Assessment    Consent  Decree  Markets 
 22.  From  a  consumers  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. 


 b.  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  Nextels  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  Nextels  acquisition  of  SMR  licenses  held  by  Motorola 
 in  non-  Consent  Decree  cities  in  1995,  and,  similarly,  has  not  challenged  Nextels  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  Nextels  competitors  to 
 meet  consumer  demand. 
12
 Federal  Communications  Commission  DA  00-  89 
 13 
 i.  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  Bureaus  analysis  in  Pittencrieff,  60  evaluates 
 the  acquisitions  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  Nextels  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 


 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  Bureaus  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 
13
 Federal  Communications  Commission  DA  00-  89 
 14 
 also  find  that  the  boundaries  between  various  CMRS  sectors  are  fluid.  These  changes  result  from  the  Commissions  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  Nextels  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. 
 ii.  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 


 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). 
14
 Federal  Communications  Commission  DA  00-  89 
 15 
 iii.  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. 
 iv.  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  Geoteks  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 
 Nextels  ability  to  set  prices  or  restrict  customers  access  to  these  services.  73 


 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  (RCSs  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  DOJs  conclusion  that  concentration  in  the  relevant  markets,  based  on  recent 
 marketplace  developments,  is  likely  to  be  mitigated  by  other  significant  entry. 
15
 Federal  Communications  Commission  DA  00-  89 
 16 
 a)  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. 
 b)  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  Nextels  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  ARCs  spectrum-based  HHI  analysis  overstates  the  increase  in  concentration.  In  particular,  it  overstates  the 
 increase  in  Nextels  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, 


 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  Nextels  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. 
16
 Federal  Communications  Commission  DA  00-  89 
 17 
 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  Nextels  ability  to  behave  anti-  competitively  in  the  relevant  trunked  dispatch  markets. 


 c)  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  DOJs  conclusion  that  a  number  of  cellular  and  PCS  firms  appear  to  be  positioning  price  and  service  plans  to  compete  more  closely  with 
 Nextels  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,  Ericssons  TDMA  Pro 
 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 
17
 Federal  Communications  Commission  DA  00-  89 
 18 
 product  overlays  dispatch  capabilities  onto  existing  mobile  voice  networks  by  programming  the  networks  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  Commissions  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  Commissions  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  DOJs  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 


 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  Commissions  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. 
18
 Federal  Communications  Commission  DA  00-  89 
 19 
 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, 
 Motorolas  iDEN  technology,  introduced  into  service  over  this  period  by  Nextel  and  Southern,  has  increased  spectrum  capacity  three-  to  six-  fold  compared  to  analog  systems.  Ericssons 
 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- 


 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. 
19
 Federal  Communications  Commission  DA  00-  89 
 20 
 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  spectrums 
 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. 
 v.  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  Nextels.  89 


 2.  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  Commissions  rules  permitting  a  variety  of  uses,  as  well  as  reflecting  Nextels  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 


 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  licensees  innocent  creditors). 
20
 Federal  Communications  Commission  DA  00-  89 
 21 
 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  Nextels  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  Nextels  premium  pricing  has  exerted  little  downward  pressure  on  prices  for  mobile  phone  service.  We  disagree,  noting  in  particular  Nextels  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 


 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  Nextels  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. 
21
 Federal  Communications  Commission  DA  00-  89 
 22 
 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 
 D.  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. 


 IV.  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 


 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.) 
22
 Federal  Communications  Commission  DA  00-  89 
 23 
 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  Commissions  rules,  47  C.  F.  R.    0.331. 
 FEDERAL  COMMUNICATIONS  COMMISSION 


 Thomas  J.  Sugrue  Chief,  Wireless  Telecommunications  Bureau 
23
 Federal  Communications  Commission  DA  00-  89 
 24 
 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. 
24