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 Federal  Communications  Commission  FCC  05-  138 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 
 In  the  Matter  of 
 Applications  of  Western  Wireless  Corporation  and  ALLTEL  Corporation 
 For  Consent  to  Transfer  Control  of  Licenses  and  Authorizations 
 File  Nos.  0002016468,  et  al. 
 )  ) 
 )  ) 
 )  ) 
 )  ) 
 ) 
 WT  Docket  No.  05-  50 
 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  July  11,  2005  Released:  July  19,  2005 
 By  the  Commission:  Commissioners  Abernathy,  Copps,  and  Adelstein  issuing  separate  statements. 
 TABLE  OF  CONTENTS 
 Heading  Paragraph  # 
 I.  INTRODUCTION..................................................................................................................................  1  II.  BACKGROUND....................................................................................................................................  3 
 A.  Description  of  the  Applicants  ..........................................................................................................  3  1.  ALLTEL  Corporation................................................................................................................  3 
 2.  Western  Wireless  Corporation  ..................................................................................................  6  B.  Description  of  Transaction.............................................................................................................  10 
 C.  Applications  and  Review  Process..................................................................................................  13  1.  Commission  Review................................................................................................................  13 
 2.  Department  of  Justice  Review.................................................................................................  16  III.  STANDARD  OF  REVIEW  AND  PUBLIC  INTEREST  FRAMEWORK  ..........................................  17 
 IV.  COMPETITIVE  ANALYSIS...............................................................................................................  22  A.  Market  Definition  ..........................................................................................................................  25 
 1.  Product  Market  Definition.......................................................................................................  25  2.  Geographic  Market  Definition  ................................................................................................  32 
 3.  Market  Participants..................................................................................................................  37  B.  Potential  Competitive  Harms  .........................................................................................................  40 
 1.  Market  Concentration..............................................................................................................  40  2.  Horizontal  Issues  .....................................................................................................................  52 
 a.  Unilateral  Effects  ..............................................................................................................  54  b.  Coordinated  Interaction  ....................................................................................................  85 
 c.  Cellular  One  Brand  ...........................................................................................................  94  3.  Vertical  Issues    Roaming.......................................................................................................  99 
 a.  Background.....................................................................................................................  100  b.  Discussion.......................................................................................................................  108 
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 4.  Market-  by-  Market  Evaluation...............................................................................................  110  a.  Analytical  Standard.........................................................................................................  110 
 b.  Results  of  Analysis  .........................................................................................................  118  C.  Public  Interest  Benefits  ................................................................................................................  132 
 1.  Introduction  ...........................................................................................................................  132  2.  Analytical  Framework...........................................................................................................  135 
 3.  Increased  Footprint................................................................................................................  138  4.  Improvements  in  Service  Quality  ..........................................................................................  141 
 5.  Promotion  of  Next-  Generation  Services  ...............................................................................  143  6.  Economies  of  Scale  and  Operating  Synergies.......................................................................  144 
 7.  Improved  Roaming  in  Rural  Areas........................................................................................  152  8.  Support  for  Homeland  Security  and  Public  Safety................................................................  155 
 9.  Conclusion.............................................................................................................................  158  V.  CONDITIONS/  REMEDIES...............................................................................................................  159 
 A.  Operating  Unit  Divestitures  .........................................................................................................  162  B.  Operation  of  Divestitures.............................................................................................................  163 
 VI.  CONCLUSION  ..................................................................................................................................  170  VII..................................................................................................................  ORDERING  CLAUSES  171 
 APPENDICES:  Appendix  A:  Commenting  Parties  and  Petitioners 
 Appendix  B:  List  of  Markets  Identified  for  Further  Analysis  by  Initial  Screen  Appendix  C:  Market-  Specific  Analysis  of  Markets  Involving  Divestiture 
 Appendix  D:  Market-  Specific  Analysis  of  Markets  Not  Involving  Divestiture 
 I.  INTRODUCTION 
 1.  In  this  Order,  we  consider  applications  filed  by  Western  Wireless  Corporation  (  WWC)  and  ALLTEL  Corporation  (  ALLTEL)  (collectively,  the  Applicants)  for  consent  to  transfer  control  of  all 
 licenses  and  authorizations  held  by  WWC  and  its  subsidiaries  to  ALLTEL.  The  Applicants  generally  seek  Commission  approval  of  the  transfer  of  control  of  WWCs  licensee  subsidiaries  to  ALLTEL.  This 
 transfer  of  control  would  take  place  as  a  result  of  the  proposed  merger  of  WWC  into  Wigeon  Acquisition  LLC  (  Wigeon),  a  limited  liability  company  wholly  owned  by  ALLTEL.  The  applications  pertain  to 
 licenses  for  the  Part  22  Cellular  Radiotelephone  Service  (  Cellular),  the  Part  22  Paging  and  Radiotelephone  Service,  the  Part  24  Personal  Communications  Service  (  PCS),  the  Part  90 
 Industrial/  Business  Pool  Service,  the  Part  90  Private  Carrier  Paging  Service,  the  Part  90  Specialized  Mobile  Radio  Service,  the  Part  101  Common  Carrier  Fixed  Point-  to-  Point  Microwave  Service,  and  the 
 Part  101  Local  Multipoint  Distribution  Service.  Additionally,  the  Applicants  are  seeking  consent  to  the  assignment  and  transfer  of  control  of  two  international  section  214  authorizations  from  WWC  to  Wigeon. 
 2.  Pursuant  to  sections  214(  a)  and  310(  d)  of  the  Communications  Act  of  1934,  as  amended  (  Communications  Act),  1  we  must  determine  whether  the  Applicants  have  demonstrated  that  the 
 proposed  acquisition  of  WWC  would  serve  the  public  interest,  convenience,  and  necessity.  Based  on  the  record  before  us,  we  find  that  the  Applicants  have  generally  met  that  burden.  Competitive  harm  is 
 unlikely  in  most  mobile  telephony  markets,  primarily  because  of  the  complementary  footprints  of  ALLTEL  and  WWC.  Our  case-  by-  case  analysis  did,  however,  indicate  that  in  sixteen  markets  likely 
 1  47  U.  S.  C.    214(  a),  310(  d). 
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 competitive  harms  exceed  the  likely  benefits  of  the  transaction.  In  these  areas,  we  impose  narrowly-tailored  conditions  that  will  effectively  remedy  the  potential  for  these  particular  harms. 
 II.  BACKGROUND 
 A.  Description  of  the  Applicants 
 1.  ALLTEL  Corporation 
 3.  ALLTEL  is  a  publicly-  traded  Delaware  corporation,  headquartered  in  Little  Rock,  Arkansas.  2  Through  its  subsidiaries,  ALLTEL  primarily  provides  wireless  and  wireline  telephone  services  to  more 
 than  13  million  customers  in  mid-  sized  cities  and  rural  areas  in  26  states  throughout  much  of  the  Southeast  and  portions  of  the  Northeast,  Southwest,  and  upper  Midwest  United  States.  3  For  fiscal  year 
 2004,  ALLTEL  reported  approximately  $8.2  billion  in  revenues.  4 
 4.  Specifically,  ALLTEL  provides  wireless  communications  services  to  more  than  8.6  million  customers  in  24  states.  5  ALLTEL  provides  analog  and  digital  wireless  telecommunications  services  to  its 
 customers  on  850  MHz  band  Cellular  licenses  and  1900  MHz  band  PCS  licenses  using  Code  Division  Multiple  Access  (  CDMA)  technology.  6  Furthermore,  ALLTEL  is  deploying  1xRTT  and  EV-  DO  to 
 provide  enhanced  wireless  data  services.  7  Currently,  ALLTEL  owns  a  majority  interest  in  Cellular  and  PCS  wireless  operations  covering  a  total  aggregate  population  (  POPs)  of  approximately  62.5  million.  8 
 As  of  December  31,  2004,  ALLTEL  had  a  penetration  rate,  which  is  the  number  of  customers  as  a  percentage  of  the  total  population  in  ALLTELs  service  area,  of  13.8  percent.  9  ALLTEL  supplements  its 
 wireless  service  coverage  area  through  roaming  agreements  with  other  wireless  providers  expanding  its  coverage  area  to  approximately  95  percent  of  the  United  States  population.  10 
 2  See  ALLTEL  Corporation,  Form  10-  K,  at  1  (filed  Feb.  10,  2005)  (  ALLTEL  10-  K). 
 3  See  id.  at  1,  4;  see  also  ALLTEL  Corporation,  Form  8-  K,  Exhibit  99(  a),  at  2  (filed  Jan.  10,  2005)  (  ALLTEL  8- 
 K).  ALLTEL  also  provides  cable  television  services  in  select  markets.  See  ALLTEL  10-  K  at  4.  4 
 ALLTEL  10-  K  at  4;  ALLTEL  Corporation,  2004  Annual  Review,  at  11  (Jan.  24,  2005).  5 
 ALLTEL  10-  K  at  4.  ALLTEL  states  that  it  holds  a  10  percent  or  greater  ownership  interest  in  Cellular  and  PCS  licenses  in  portions  of  the  following  28  states    Alabama,  Arkansas,  Arizona,  California,  Colorado,  Florida, 
 Georgia,  Illinois,  Iowa,  Kansas,  Kentucky,  Louisiana,  Massachusetts,  Michigan,  Mississippi,  Missouri,  Nebraska,  New  Mexico,  North  Carolina,  Ohio,  Oklahoma,  South  Carolina,  Tennessee,  Texas,  Utah,  Virginia,  West  Virginia, 
 and  Wisconsin.  Additionally,  ALLTEL  will  soon  begin  providing  service  in  a  portion  of  Connecticut  as  well.  See  Letter  from  Doane  F.  Kiechel,  Morrison  &  Foerster,  LLP,  Counsel  for  Western  Wireless  Corporation,  and  Kathryn 
 A.  Zachem,  Wilkinson  Barker  Knauer,  LLP,  Counsel  for  ALLTEL  Corporation,  to  Susan  Singer,  Assistant  Chief,  Spectrum  and  Competition  Policy  Division,  Wireless  Telecommunications  Bureau,  Federal  Communications 
 Commission,  at  3  (Mar.  15,  2005)  (  March  15,  2005  Response  to  Information  Request).  6 
 ALLTEL  10-  K  at  8.  ALLTEL  is  also  authorized  to  operate  paging  licenses  and  ancillary  private  radio  and  microwave  licenses.  ALLTEL  provides  paging  services  in  select  markets  to  approximately  22,000  customers  on  a 
 resale  basis.  Id.  at  5.  7 
 See  id.  at  5,  6,  8.  ALLTEL  provides  high-  speed  wireless  data  in  Arkansas,  Arizona,  Florida,  Georgia,  Louisiana,  Michigan,  North  Carolina,  New  Mexico,  Ohio,  South  Carolina,  and  Virginia.  See  March  15,  2005  Response  to 
 Information  Request  at  4.  8 
 See  ALLTEL  10-  K  at  4.  9 
 Id.  at  4.  10 
 Id.  at  5. 
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 5.  Additionally,  ALLTEL  provides  local  telephone,  high-  speed  data,  and  Internet  services  to  approximately  3  million  customers  in  15  states.  11  ALLTEL  also  offers  long-  distance  services,  12  and 
 network  access  and  interconnection  services,  13  and  provides  cable  television  services  in  select  markets.  14 
 2.  Western  Wireless  Corporation 
 6.  WWC  is  a  publicly-  traded  Washington  corporation,  headquartered  in  Bellevue,  Washington.  15  Through  various  subsidiaries  and  affiliates,  WWC  owns  and  operates  wireless  phone 
 systems  in  predominantly  rural  areas  in  the  Central  and  Western  portions  of  the  United  States.  16  Additionally,  a  WWC  subsidiary,  Western  Wireless  International  Holding  Corporation  (  WWI), 
 provides  service  to  approximately  1.8  million  international  mobile  subscribers  and  is  licensed  to  provide  wireless  communications  to  approximately  56  million  people  in  seven  foreign  countries.  17  For  fiscal  year 
 2004,  WWC  reported  $1.9  billion  in  revenues.  18 
 7.  Specifically,  WWC  provides  wireless  services  to  approximately  1.4  million  subscribers  in  19  states,  19  and  has  a  license  and  service  area  of  11.5  million  POPs.  20  Using  its  850  MHz  band  Cellular 
 licenses  and  1900  MHz  band  PCS  licenses,  21  WWC  provides  basic  voice  services,  short  messaging,  multimedia  messaging,  and  wireless  internet,  and  has  deployed  1xRTT  to  provide  high-  speed  data  in  18 
 11  See  id.  at  1,  4,  12.  ALLTEL  provides  wireline  services  as  an  incumbent  local  exchange  carrier  (ILEC)  or 
 competitive  local  exchange  carrier  (CLEC)  in  parts  of  Alabama,  Arkansas,  Florida,  Georgia,  Kentucky,  Mississippi,  Missouri,  Nebraska,  New  York,  North  Carolina,  Ohio,  Oklahoma,  Pennsylvania,  South  Carolina,  and  Texas.  March 
 15,  2005  Response  to  Information  Request  at  4;  ALLTEL  10-  K  at  12.  12 
 ALLTEL  10-  K  at  20.  ALLTEL  states  that  it  provides  long-  distance  telecommunications  services  on  a  facilities-based  and  resale  basis  in  all  states  in  which  it  provides  local  exchange  services.  As  of  December  2004,  ALLTEL 
 provided  service  to  approximately  1.  8  million  customers.  See  id.  Further,  ALLTEL  states  that  it  provides  long-distance  services  to  its  wireline  and  wireless  customers  in  Alabama,  Arkansas,  Arizona,  Colorado,  Florida,  Georgia, 
 Iowa,  Kansas,  Kentucky,  Louisiana,  Michigan,  Mississippi,  Missouri,  Nebraska,  New  Mexico,  New  York,  North  Carolina,  Ohio,  Oklahoma,  Pennsylvania,  South  Carolina,  Tennessee,  Texas,  Virginia,  Wisconsin,  and  West 
 Virginia.  March  15,  2005  Response  to  Information  Request  at  3.  13 
 See  ALLTEL  10-  K  at  12,  17-  19,  20.  14 
 See  id.  at  12  (stating  that  ALLTEL  provides  cable  television  services  to  approximately  36,000  customers  in  Georgia  and  Missouri). 
 15  See  Western  Wireless  Corporation,  Form  10-  K,  at  1  (filed  Mar.  16,  2005)  (  WWC  10-  K). 
 16  See  id.  at  5,  10. 
 17  Id.  at  5,  17-  18.  These  countries  include:  Austria,  Bolivia,  Georgia,  Ghana,  Haiti,  Ireland,  and  Slovenia. 
 Applicants  had  operations  in  the  Ivory  Coast  but  note  that,  due  to  political  instability,  operations  in  have  been  temporarily  suspended.  See  id.  at  5,  18;  March  15,  2005  Response  to  Information  Request  at  4.  In  Austria,  Bolivia, 
 Ghana,  Haiti,  Ireland,  and  Slovenia,  WWI  holds  controlling  interests  in  the  operating  company.  It  also  holds  a  non-controlling  interest  in  the  operating  company  in  Georgia.  See  Western  Wireless  Corporation,  Form  10-  Q,  at  6  (filed 
 May  6,  2005)  (  WWC  10-  Q).  In  certain  markets,  WWI  subsidiaries  also  provide  other  telecommunications  services,  such  as  wireline  services  and  international  long  distance.  See  WWC  10-  K  at  5. 
 18  ALLTEL  10-  K  at  4;  ALLTEL  Corporation,  2004  Annual  Report,  at  11  (Jan.  24,  2005),  available  at 
 http://  media.  corporate-  ir.  net/  media_  files/  irol/  74/  74159/  2004/  2004_  Annual.  pdf  (last  visited  June  8,  2005).  19 
 WWC  10-  K  at  5,  10;  Western  Wireless  Corporation,  Form  8-  K,  Exhibit  99.1  at  4  (filed  Jan.  10,  2005)  (  WWC  8-  K). 
 20  WWC  10-  K  at  5,  10. 
 21  See  id.  at  5,  6,  10. 
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 states.  22  Unlike  many  wireless  providers,  WWCs  network  supports  four  technology  platforms,  CDMA,  Time  Division  Multiple  Access  (  TDMA),  Global  System  for  Mobile  Communications  (  GSM),  and 
 analog.  23  WWC  uses  its  network  not  only  to  provide  service  to  its  subscribers  but  also  to  other  companies  subscribers  who  roam  in  WWCs  service  area.  24 
 8.  WWC  provides  wireless  services  under  two  different  brand  names    Western  Wireless  and  Cellular  One.  25  Although  WWC  wholly  owns  the  Cellular  One  brand  name,  26  it  licenses  the  Cellular  One 
 brand  name  to  the  other  wireless  service  carriers  comprising  the  Cellular  One  Group,  pursuant  to  a  licensing  agreement.  27  The  Cellular  One  Group  is  a  national  coalition  of  over  twenty  wireless  service 
 carriers  that  owns,  manages,  and  promotes  the  registered  Cellular  One  brand.  28  In  the  aggregate,  the  Cellular  One  Group  of  independent  carriers  offers  wireless  communications  to  more  than  32  million 
 customers  in  42  states,  as  well  as  Puerto  Rico,  Bermuda,  and  the  Caribbean.  29 
 9.  WWC  is  one  of  the  two  largest  service  providers  branding  their  services  as  Cellular  One;  the  other  is  Dobson  Communications  Corporation  (  Dobson).  30  WWCs  properties  cover  41  percent  of 
 Cellular  Ones  total  POPs.  31  Under  the  Cellular  One  brand  name,  WWC  serves  more  than  one  million  customers  in  nineteen  states  using  WWC  properties  with  a  service  area  of  more  than  10  million  POPs  and 
 covering  more  than  30  percent  of  the  continental  United  States.  32  Dobson  provides  wireless  services,  33  under  the  Cellular  One  and  Dobson  Cellular  Systems  brand  names,  34  to  approximately  1.6  million 
 22  See  id.  at  7-  8. 
 23  See  id.  at  5,  7. 
 24  Id.  at  5,  6. 
 25  Id.  at  5,  10;  WWC  8-  K,  Exhibit  99.1  at  4.  WWC  provides  service  in  Arizona,  Arkansas,  California,  Colorado, 
 Idaho,  Iowa,  Kansas,  Minnesota,  Missouri,  Montana,  Nebraska,  Nevada,  New  Mexico,  North  Dakota,  Oklahoma,  South  Dakota,  Texas,  Utah,  and  Wyoming.  See  WWC  10-  K  at  10. 
 26  See  WWC  8-  K,  Exhibit  99.1  at  4;  see  also  Cellular  One  Company  Overview  at  1,  at 
 http://  www.  cellularone.  com/  AboutCellularOne.  asp  (last  visited  June  6,  2005)  (  Cellular  One  Overview).  27 
 See  WWC  10-  K  at  12;  see  also  WWC  8-  K,  Exhibit  99.  1  at  4  (stating  that  WWC  licenses  the  Cellular  One  name  in  16  additional  states  and  the  Caribbean). 
 28  Cellular  One  Overview  at  1. 
 29  Id. 
 30  See  Petition  to  Deny  of  Dobson  Cellular  Systems,  Inc.  and  American  Cellular  Corporation,  filed  Mar.  9,  2005,  at 
 2  (  Dobson  Petition).  31 
 Id.  32 
 See  Cellular  One  Frequently  Asked  Questions  at  1,  at  http://  www.  cellularonewest.  com/  CelloneFAQs.  asp  (last  visited  June  6,  2005). 
 33  Dobson,  through  its  subsidiaries  Dobson  Cellular  Systems,  Inc.  and  American  Cellular  Corporation,  offers  digital 
 voice  and  high-  speed  data  services,  such  as  wireless  e-  mail,  internet  access,  and  multi-  media  message.  See  Dobson  Petition  at  1  n.  1;  see  also  Dobson  Communications  Corp,  Form  10-  K,  at  3,  8  (filed  May  10,  2005)  (  Dobson  10- 
 K);  Dobson  Profile  at  2,  at  http://  www.  dobson.  net/  dp_  profile.  html  (last  visited  June  3,  2005);  Dobson  Network  Excellence  at  1,  at  http://  www.  dobson.  net/  dp_  network_  excellence.  html  (last  visited  June  3,  2005).  Dobson 
 operates  on  850  MHz  and  1900  MHz  bands,  using  multiple  technologies  including  TDMA,  GSM,  General  Packet  Radio  Service  (  GPRS),  and  Enhanced  Date  for  GSM  Evolution  (  EDGE)  technologies.  See  Dobson  10-  K  at  4; 
 see  also  Dobson  Profile  at  1.  34 
 Dobson  Brands  at  1,  at  http://  www.  dobson.  net/  dp_  brands.  html  (last  visited  June  5,  2005)  (  Dobson  Brands);  Dobson  Profile  at  1. 
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 subscribers  in  mostly  rural  and  suburban  markets  in  sixteen  states.  35  Specifically,  Dobson  markets  service  under  the  Cellular  One  brand  name  in  all  of  its  markets,  except  for  parts  of  Texas  and  Oklahoma  where  it 
 markets  its  service  under  Dobson  Cellular  Systems.  36  The  markets  in  which  Dobson  markets  under  the  Cellular  One  brand  name  cover  45  percent  of  the  total  Cellular  One  POPs.  37 
 B.  Description  of  Transaction 
 10.  On  January  9,  2005,  ALLTEL  and  WWC  entered  into  a  merger  agreement  (  Merger  Agreement)  whereby  ALLTEL  would  purchase  WWC  in  a  stock-  and-  cash  transaction  valued  at 
 approximately  $6  billion.  38  According  to  the  terms  and  conditions  of  the  Merger  Agreement,  WWC  would  be  merged  into  Wigeon  Acquisition  LLC,  a  newly  formed  limited  liability  company  wholly  owned 
 by  ALLTEL.  Pursuant  to  the  Merger  Agreement,  each  share  of  WWC  Class  A  Common  stock  and  Class  B  Common  Stock  would  be  exchanged  for  $9.25  in  cash  and  0.535  shares  of  ALLTEL  common  stock. 
 WWC  shareholders  would  have  the  right  to  make  an  all-  cash  or  all-  stock  election,  subject  to  proration  depending  on  the  number  of  shareholders  making  either  such  election.  39  Specifically,  WWC  shareholders 
 may  elect  to  receive  either  0.7  shares  of  ALLTEL  common  stock  or  $40.00  in  cash  for  each  share  of  WWC  Common  Stock;  however,  both  of  those  elections  would  be  subject  to  proration  to  preserve  an 
 overall  mix  of  $9.25  in  cash  and  approximately,  but  not  less  than,  0.535  shares  of  ALLTEL  common  stock  for  all  of  the  outstanding  shares  of  WWC  Common  Stock  taken  together.  40  In  the  aggregate, 
 ALLTEL  would  issue  approximately  60  million  shares  of  stock  and  pay  approximately  $1.0  billion  in  cash.  Through  Wigeon,  ALLTEL  would  assume  debt  of  approximately  $2.2  billion,  including  $1.2  billion 
 of  term  notes  issued  under  WWCs  credit  facility  that,  as  a  result  of  the  proposed  merger,  would  become  due  immediately  upon  closing.  41  The  Merger  Agreement  also  provides  that  licensee  entities  in  which 
 ALLTEL  currently  holds  interests  would  remain  directly  and  indirectly  held  by  ALLTEL  Communications,  Inc.,  a  wholly-  owned  subsidiary  of  ALLTEL  that  would  become  a  sister  corporation  of 
 Wigeon.  42  ALLTELs  existing  licensee  entities,  therefore,  would  not  be  affected  by  the  proposed  transaction. 
 11.  As  a  result  of  the  proposed  merger,  ALLTEL  would  add  approximately  1.3  million  domestic  wireless  customers  in  nineteen  midwestern  and  western  states  that  are  contiguous  to  the  its  existing 
 wireless  properties,  increasing  the  number  of  wireless  customers  served  by  ALLTEL  to  more  than  10  million  in  33  states.  43  Furthermore,  post-  transaction,  the  combined  service  area  of  the  Applicants  would 
 cover  72  million  POPs,  which  is  25  percent  of  the  United  States  population,  in  an  area  that  covers  56 
 35  See  Dobson  10-  K  at  3,  4;  see  also  Dobson  Communications  Corporation  at  1,  at  http://  www.  dobson.  net/  (last 
 visited  June  3,  2005)  (  Dobson  Website);  Dobson  Profile  at  1.  Dobson  provides  service  in  portions  of  Alaska,  Arizona,  Illinois,  Kansas,  Kentucky,  Maryland,  Michigan,  Minnesota,  Missouri,  New  York,  Ohio,  Oklahoma, 
 Pennsylvania,  Texas,  West  Virginia  and  Wisconsin.  See  Dobson  10-  K  at  5-  7.  36 
 See  Dobson  10-  K  at  8;  see  also  Dobson  Website  at  1;  Dobson  Brands  at  1.  37 
 Dobson  Petition  at  2.  38 
 See  ALLTEL  10-  K  at  2,  F-  3;  ALLTEL  8-  K  at  3,  Exhibit  99(  a)  at  1;  WWC  8-  K,  Exhibit  99.1  at  1.  39 
 See  ALLTEL  10-  K  at  2;  ALLTEL  8-  K  at  3;  WWC  10-  K  at  5-  6.  40 
 WWC  10-  K  at  6.  41 
 ALLTEL  10-  K  at  2.  42 
 Application  Transferring  Control  of  Licenses  Held  by  WWC  Holding  Co.,  Inc.  to  Widgeon  Acquisition  LLC,  File  No.  0002016468,  Exhibit  1  at  2  n.  5  (filed  Jan.  24,  2005)  (  Application). 
 43  See  ALLTEL  10-  K  at  2;  ALLTEL  8-  K,  Exhibit  99(  a)  at  1. 
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 percent  of  the  contiguous  United  States.  44  ALLTEL  and  WWC  assert  that  they  serve  mostly  complementary  geographic  regions.  45  Specifically,  the  Applicants  state  that,  collectively,  they  are 
 authorized  to  provide  service  in  411  Cellular  Market  Areas  (  CMAs)  and  242  Component  Economic  Areas  (  CEAs).  46  The  proposed  transaction,  however,  would  result  in  spectrum  and  service  overlaps  in 
 only  27  CMAs  and  39  CEAs,  which  represent  less  than  3  million  of  the  72  million  POPs  that  would  be  covered  by  the  combined  company.  47 
 12.  The  Applicants  assert  that  approval  of  the  proposed  transaction  is  in  the  public  interest,  stating  that  it  would  strengthen  ALLTEL  as  a  competitor  by  expanding  its  wireless  footprint.  48 
 Specifically,  the  merger  would  allow  ALLTEL  to  expand  its  existing  wireless  footprint  into  nine  additional  states    California,  Idaho,  Minnesota,  Montana,  Nevada,  North  Dakota,  South  Dakota,  Utah, 
 and  Wyoming    and  expand  its  existing  wireless  operations  in  Arizona,  Colorado,  New  Mexico,  and  Texas.  49  The  Applicants  also  assert  that  this  transaction  would  create  economies  of  scale  and  scope  that 
 would  improve  its  ability  to  compete  against  the  nationwide  carriers.  50  The  Applicants  further  claim  that  the  combined  company  would  have  greater  resources  to  enable  it  to  deploy  advanced  wireless  services  in 
 rural  areas  more  quickly  than  either  Applicant  could  do  on  a  stand-  alone  basis.  51  This  commitment  to  deploying  such  services  in  rural  areas,  the  Applicants  argue,  distinguishes  the  company  from  its 
 nationwide  competitors.  52  Finally,  the  Applicants  claim  that  the  acquisition  of  WWC  would  provide  a  business  base  broad  enough  for  ALLTEL  to  consider  the  deployment  of  additional  technologies  (e.  g., 
 GSM)  that  would  expand  the  availability  of  automatic  roaming  agreements  in  rural  areas  in  the  United  States.  53 
 C.  Applications  and  Review  Process 
 1.  Commission  Review 
 13.  On  January  24,  2005,  pursuant  to  section  310(  d)  of  the  Communications  Act,  54  ALLTEL  and  WWC  filed  five  applications  seeking  consent  to  the  proposed  transfer  of  control  of  licenses  held  by 
 WWC  and  its  subsidiaries  to  Widgeon,  55  a  wholly-  owned  subsidiary  of  ALLTEL,  56  and  one  application 
 44  See  Application,  Exhibit  1  at  10  n.  31;  see  also  ALLTEL  8-  K,  Exhibit  99(  a)  at  1;  WWC  8-  K,  Exhibit  99.1  at  2. 
 45  Application,  Exhibit  1  at  10.  See  also  ALLTEL  8-  K,  Exhibit  99b  at  5. 
 46  Application,  Exhibit  1  at  10.  For  a  discussion  of  CEAs  and  CMAs,  see  infra  paras.  44-  45. 
 47  Application,  Exhibit  1  at  10. 
 48  See  id.  at  3-  5  (stating,  however,  that  the  transaction  will  not  transform  ALLTEL  into  a  nationwide  competitor). 
 49  Id.  at  4. 
 50  See  id.  at  4,  5-  6. 
 51  See  id.  at  4,  6-  7. 
 52  See  id. 
 53  See  id.  at  4,  8. 
 54  47  U.  S.  C.    310(  d). 
 55  Application  Transferring  Control  of  Licenses  Held  by  WWC  Holding  Co.,  Inc.  to  Widgeon  Acquisition  LLC,  File 
 No.  0002016468  (filed  Jan.  24,  2005);  Application  Transferring  Control  of  Licenses  Held  by  WWC  License  L.  L.  C.  to  Widgeon  Acquisition  LLC,  File  No.  0002016892  (filed  Jan.  24,  2005);  Application  Transferring  Control  of 
 Licenses  Held  by  WWC  Paging  Corporation  to  Widgeon  Acquisition  LLC,  File  No.  0002016459  (filed  Jan.  24,  2005);  Application  Transferring  Control  of  Licenses  Held  by  WWC  Texas  RSA  Limited  Partnership  to  Widgeon 
 (continued.) 
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 seeking  consent  to  the  transfer  of  control  of  a  de  facto  transfer  lease  authorization.  57  Pursuant  to  section  214  of  the  Communications  Act,  58  ALLTEL  and  WWC  also  filed  two  international  section  214 
 applications    an  application  seeking  Commission  approval  to  assign  an  international  section  214  authorization  from  WWC  to  Widgeon  and  an  application  seeking  consent  to  the  transfer  of  control  of  an 
 international  section  214  authorization  from  Western  Wireless  International  Enterprise,  Inc.,  a  subsidiary  of  WWC,  to  Widgeon.  59  On  February  7,  2005,  the  Commission  released  a  Public  Notice  seeking  public 
 comment  on  the  proposed  transaction.  60  In  response  to  the  Comment  Public  Notice,  the  Commission  received  three  petitions  to  deny  the  applications  and  thirty-  six  comments  in  overall  support  of  the  grant  of 
 the  applications.  61 
 14.  The  Wireless  Telecommunications  Bureau  (  Bureau)  adopted  a  protective  order,  dated  February  11,  2005,  under  which  third  parties  would  be  allowed  to  review  confidential  or  proprietary 
 documents  submitted  by  the  Applicants.  62  On  March  1,  2005,  Bureau  staff  requested  additional  information  from  the  Applicants  (  Information  Request).  63  The  Applicants  responses  to  the  Information 
 Request,  filed  on  March  15,  2005  and  March  29,  2005,  64  along  with  additional  information  supplied  by  the  Applicants,  65  are  included  in  the  record. 
 (Continued  from  previous  page)  Acquisition  LLC,  File  No.  0002016476  (filed  Jan.  24,  2005);  Application  Transferring  Control  of  Licenses  Held  by 
 Western  CLEC  Corporation  to  Widgeon  Acquisition  LLC,  File  No.  0002016889  (filed  Jan.  24,  2005).  File  No.  0002016468  has  been  designated  the  lead  Application.  The  other  applications  each  contain  an  exhibit  referring  to 
 the  exhibits  attached  to  file  no.  0002016468.  Thus,  for  convenience,  we  only  cite  to  the  lead  Application.  56 
 Application,  Exhibit  1  at  2.  57 
 Application  Transferring  Control  of  De  Facto  Transfer  Lease  Authorization  Held  by  WWC  Holding  Co.,  Inc.  to  Widgeon  Acquisition  LLC,  File  No.  0002018539  (filed  Jan.  24,  2005).  In  evaluating  the  competitive  effects  of  the 
 proposed  transaction,  we  will  treat  the  spectrum  under  the  de  facto  transfer  lease  authorization  in  the  same  manner  as  the  licenses  to  be  assigned  from  WWC  to  ALLTEL. 
 58  47  C.  F.  R.    214. 
 59  Application  to  Transfer  Control  of  International  Section  214  Authorization  Held  by  Western  Wireless 
 Corporation  to  Widgeon  Acquisition  LLC,  File  No.  ITC-  T/  C-  20050126-  00030,  at  1  (filed  Jan.  24,  2005);  Application  to  Assign  International  Section  214  Authorization  Held  by  Western  Wireless  Corporation  to  Widgeon 
 Acquisition  LLC,  File  No.  ITC-  ASG-  20050126-  00031,  at  1  (filed  Jan.  24,  2005).  The  Applicants  are  both  authorized  to  provide  global  facilities-  based  and  resale  international  services.  Application,  Exhibit  1,  at  18. 
 60  Western  Wireless  Corporation  and  ALLTEL  Corporation  Seek  FCC  Consent  to  Transfer  Control  of  Licenses  and 
 Authorizations,  WT  Docket  No.  05-  50,  Public  Notice,  20  FCC  Rcd.  2337  (2005)  (  Comment  Public  Notice).  The  Comment  Public  Notice  set  due  dates  of  March  9,  2005  for  Petitions  to  Deny,  March  21,  2005  for  Oppositions,  and 
 March  28,  2005  for  Replies.  See  id.  at  2337,  2339.  61 
 The  entities  that  filed  pleadings  in  this  proceeding  are  listed  in  Appendix  A.  In  addition,  we  have  received  informal  comments  through  ex  parte  submissions.  See  Appendix  A.  All  pleadings  and  comments  are  available  on 
 the  Commissions  Electronic  Comment  Filing  System  (  ECFS)  website  at  www.  fcc.  gov/  cgb/  ecfs/.  62 
 Applications  for  the  Transfer  of  Control  of  Licenses  and  Authorizations  from  Western  Wireless  Corporation  and  Its  Subsidiaries  to  ALLTEL  Corporation;  Order  Adopting  Protective  Order,  WT  Docket  No.  05-  50,  Order,  20  FCC 
 Rcd.  2484  (2005).  63 
 Letter  from  William  W.  Kunze,  Chief,  Spectrum  and  Competition  Policy  Division,  Wireless  Telecommunications  Bureau,  Federal  Communications  Commission,  to  Doane  F.  Kiechel,  Morrison  &  Foerster,  LLP,  and  Kathryn  A. 
 Zachem,  Wilkinson  Barker  Knauer,  LLP  (Mar.  1,  2005).  64 
 March  15,  2005  Response  to  Information  Request  at  1;  Letter  from  Doane  F.  Kiechel,  Morrison  &  Foerster,  LLP,  Counsel  for  Western  Wireless  Corporation,  and  Kathryn  A.  Zachem,  Wilkinson  Barker  Knauer,  LLP,  Counsel  for 
 (continued.) 
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 15.  Prior  to  the  filing  of  the  applications,  the  Bureau  released  a  public  notice  announcing  the  Commissions  intent  to  provide  the  United  States  Department  of  Justice  (  DOJ)  access  to  information 
 contained  in  the  Numbering  Resource  Utilization  and  Forecast  (  NRUF)  reports  filed  by  wireless  telecommunications  carriers  as  well  as  disaggregated,  carrier-  specific  local  number  portability  (  LNP) 
 data  related  to  wireless  telecommunications  carriers.  66  The  Bureau  also  announced  by  public  notice  that  the  NRUF  and  LNP  reports  would  be  placed  into  the  record,  67  subject  to  a  separate  protective  order 
 (  NRUF  Protective  Order).  68  On  March  11,  2005,  ALLTEL  requested  access  to  the  NRUF  reports  for  the  purpose  of  granting  employees  of  ALLTELs  outside  counsel  and  economic  consulting  firm  access  to 
 the  data.  69  The  Commission  placed  the  NRUF  and  LNP  reports  into  the  record,  pursuant  to  the  NRUF  Protective  Order,  and  provided  the  NRUF  report  to  the  Applicants  on  March  22,  2005. 
 2.  Department  of  Justice  Review 
 16.  The  Antitrust  Division  of  DOJ  reviews  telecommunications  mergers  pursuant  to  section  7  of  the  Clayton  Act,  which  prohibits  mergers  that  are  likely  to  substantially  lessen  competition.  70  The 
 Antitrust  Divisions  review  is  limited  solely  to  an  examination  of  the  competitive  effects  of  the  acquisition,  without  reference  to  national  security,  law  enforcement,  or  other  public  interest 
 considerations.  The  Antitrust  Division  reviewed  the  merger  between  ALLTEL  and  WWC.  As  a  result  of  its  analysis,  DOJ  concluded  that  the  proposed  merger  was  likely  to  result  in  competitive  harm  in  certain 
 markets.  71  Thus,  it  entered  into  an  agreement  with  the  Applicants  that  was  submitted  to  the  District  Court  as  a  proposed  final  judgment  on  July  6,  2005.  72  In  addition,  DOJ  and  the  Applicants  agreed  to  a 
 preservation  of  assets  stipulation  and  order  with  the  Applicants,  which  was  entered  by  the  District  Court 
 (Continued  from  previous  page)  ALLTEL  Corporation,  to  Erin  McGrath,  Assistant  Chief,  Mobility  Division,  Wireless  Telecommunications  Bureau, 
 Federal  Communications  Commission  (Mar.  29,  2005)  (  March  29,  2005  Response  to  Information  Request).  65 
 See,  e.  g.,  Letter  from  Kathryn  A.  Zachem  and  Kenneth  D.  Patrich,  Wilkinson  Barker  Knauer,  LLP,  Counsel  for  ALLTEL  Corporation,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission  (May  6,  2005); 
 Letter  from  Kathryn  A.  Zachem  and  Kenneth  D.  Patrich,  Wilkinson  Barker  Knauer,  LLP,  Counsel  for  ALLTEL  Corporation,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission  (May  6,  2005). 
 66  Notice  of  Request  for  Access  to  Data  to  Carriers  Who  File  Numbering  Resource  Utilization  and  Forecast  Reports 
 (NRUF),  Public  Notice,  20  FCC  Rcd.  1602  (2005).  67 
 Western  Wireless  Corporation  and  ALLTEL  Corporation  Applications  for  Transfer  of  Control  of  Licenses  and  Authorizations;  Numbering  Resource  Utilization  and  Forecast  (NRUF)  Reports  and  Local  Number  Portability 
 Reports  Placed  into  the  Record,  Subject  to  Protective  Order,  WT  Docket  No.  05-  50,  Public  Notice,  20  FCC  Rcd.  4211  (2005). 
 68  Applications  for  the  Transfer  of  Control  of  Licenses  and  Authorizations  from  Western  Wireless  Corporation  and 
 ALLTEL  Corporation;  Protective  Order,  Order,  WT  Docket  No.  05-  50,  Protective  Order,  20  FCC  Rcd.  4214  (2005). 
 69  See  Letter  from  Kenneth  D.  Patrich,  Wilkinson  Barker  Knauer,  LLP,  to  Marlene  H.  Dortch,  Secretary,  Federal 
 Communications  Commission  (Mar.  11,  2005).  70 
 15  U.  S.  C.    18.  71 
 See  United  States  v.  ALLTEL  Corporation  and  Western  Wireless  Corporation,  Complaint,  No.  1:  05CV01345  (filed  7/  6/  05);  see  also  United  States  v.  ALLTEL  Corporation  and  Western  Wireless  Corporation,  Competitive 
 Impact  Statement,  No.  1:  05CV01345  (filed  7/  6/  05)  (  DOJ  Competitive  Impact  Statement).  All  DOJ  filings  regarding  United  States  v.  ALLTEL  Corporation  and  Western  Wireless  Corporation,  No.  1:  05CV01345,  are 
 available  at  <http://  www.  usdoj.  gov/  atr/  cases/  alltel.  htm>.  72 
 United  States  v.  ALLTEL  Corporation  and  Western  Wireless  Corporation,  Proposed  Final  Judgment,  No.  1:  05CV01345  (filed  7/  6/  05)  (  DOJ  Proposed  Final  Judgment). 
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 on  the  same  day.  73  DOJ  will  allow  the  merger  to  proceed  subject  to  the  Applicants  divestiture  of  business  units  in  sixteen  markets  and  the  Cellular  One  brand,  including  intellectual  property,  license 
 agreements,  and  certain  other  assets  relating  to  the  Cellular  One  brand.  74 
 III.  STANDARD  OF  REVIEW  AND  PUBLIC  INTEREST  FRAMEWORK 
 17.  Pursuant  to  sections  214(  a)  and  310(  d)  of  the  Communications  Act,  the  Commission  must  determine  whether  the  Applicants  have  demonstrated  that  the  proposed  transfer  of  control  of  WWCs 
 licenses  and  authorizations  to  ALLTEL  would  serve  the  public  interest,  convenience,  and  necessity.  75  In  making  this  determination,  we  first  assess  whether  the  proposed  transaction  complies  with  the  specific 
 provisions  of  the  Communications  Act,  76  other  applicable  statutes,  the  Commissions  rules,  and  federal  communications  policy.  77  The  public  interest  standards  of  sections  214(  a)  and  310(  d)  involve  a  balancing 
 process  that  weighs  the  potential  public  interest  harms  of  the  proposed  transaction  against  the  potential 
 73  United  States  v.  ALLTEL  Corporation  and  Western  Wireless  Corporation,  Preservation  of  Assets  Stipulation  and 
 Order,  No.  1:  05CV01345  (filed  7/  6/  05)  (  DOJ  Stipulation).  74 
 See  DOJ  Proposed  Final  Judgment  at  1-  2,  3,  6;  see  also  DOJ  Competitive  Impact  Statement  at  8,  11-  14.  For  additional  discussion  of  DOJs  required  divestiture  of  the  Cellular  One  brand  name,  see  infra  para.  98. 
 75  47  U.  S.  C.    214(  a),  310(  d). 
 76  Section  310(  d),  47  U.  S.  C.    310(  d),  requires  that  we  consider  the  applications  as  if  the  proposed  transferee  were 
 applying  for  the  licenses  directly  under  section  308  of  the  Act,  47  U.  S.  C.    308.  See  Applications  of  AT&  T  Wireless  Services,  Inc.  and  Cingular  Wireless  Corporation,  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  21522, 
 21542    40  (2004)  (  Cingular-  AT&  T  Wireless  Order);  Applications  of  VoiceStream  Wireless  Corporation  or  Omnipoint  Corporation,  Transferors,  and  VoiceStream  Wireless  Holding  Company,  Cook  Inlet/  VS  GSM  II  PCS, 
 LLC,  or  Cook  Inlet/  VS  GSM  III  PCS,  LLC,  Transferees,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  3341,  3345-  46    10  (2000)  (  VoiceStream-  Omnipoint  Order);  Application  of  WorldCom,  Inc.  and  MCI  Communications 
 Corporation  for  Transfer  of  Control  of  MCI  Communications  Corporation  to  WorldCom,  Inc.,  CC  Docket  No.  97-  211,  Memorandum  Opinion  and  Order,  13  FCC  Rcd.  18025,  18030    8  (1998)  (  WorldCom-  MCI  Order); 
 Applications  of  SBC  Communications  Inc.  and  BellSouth  Corporation,  WT  Docket  No.  00-  81,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  at  25459,  25464    12  (2000)  (  SBC-  BellSouth  Order);  Vodafone  AirTouch, 
 PLC,  and  Bell  Atlantic  Corporation,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  16507,  16511-  12    12  (WTB,  IB  2000)  (  Bell  Atlantic-  Vodafone  Order). 
 77  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21542-  43    40;  Applications  for  Consent  to  the 
 Assignment  of  Licenses  Pursuant  to  Section  310(  d)  of  the  Communications  Act  from  NextWave  Personal  Communications,  Inc.,  Debtor-  in-  Possession,  and  NextWave  Power  Partners,  Inc.,  Debtor-  in  Possession,  to 
 Subsidiaries  of  Cingular  Wireless  LLC,  WT  Docket  03-  217,  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  2570,  2580-  81    24  (2004)  (  Cingular-  NextWave  Order);  General  Motors  Corporation  and  Hughes  Electronics 
 Corporation,  Transferors,  and  The  News  Corporation  Limited,  Transferee,  MB  Docket  No.  03-  124,  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  473,  484    16  (2004)  (  GM-  News  Corp.  Order);  AT&  T  Corp.,  British 
 Telecommunications,  PLC,  VLT  Co.  L.  L.  C,  Violet  License  Co.  LLC,  and  TNV  [Bahamas]  Limited  Applications,  IB  Docket  No.  98-  212,  Memorandum  Opinion  and  Order,  14  FCC  Rcd.  19140,  19150    20  (1999)  (  AT&  T  Corp.  -British 
 Telecom.  Order);  Applications  to  Assign  Wireless  Licenses  from  WorldCom  Inc.  (Debtor-  in-  Possession)  to  Nextel  Spectrum  Acquisition  Corp.,  WT  Docket  No.  03-  203,  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  6232, 
 6241    23  (WTB,  MB  2004)  (  Nextel-  WorldCom  Order);  Application  of  TeleCorp  PCS,  Inc.,  Tritel,  Inc.,  and  Indus,  Inc.  and  TeleCorp  Holding  Corp.  II,  L.  L.  C.,  TeleCorp  PCS,  L.  L.  C.,  ABC  Wireless,  L.  L.  C,  Polycell 
 Communications,  Inc.,  Clinton  Communications,  Inc.,  and  AT&  T  Wireless  PCS,  LLC,  WT  Docket  No.  00-  130,  Memorandum  Opinion  and  Order,  16  FCC  Rcd.  3716,  3721-  22    12  (WTB  2000)  (  TeleCorp-  Tritel  Order);  GTE 
 Corporation,  Transferor,  and  Bell  Atlantic  Corporation,  Transferee,  CC  Docket  No.  98-  184,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  14,032,  14,045,  14,046    20,  22  (2002)  (  Bell  Atlantic-  GTE  Order). 
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 public  interest  benefits.  78  The  Applicants  bear  the  burden  of  proving,  by  a  preponderance  of  the  evidence,  that  the  proposed  transaction,  on  balance,  serves  the  public  interest.  79  If  we  are  unable  to  find  that  the 
 proposed  transaction  serves  the  public  interest  for  any  reason,  or  if  the  record  presents  a  substantial  and  material  question  of  fact,  section  309(  e)  of  the  Act  requires  that  we  designate  the  application  for 
 hearing.  80 
 18.  Among  the  factors  the  Commission  considers  in  its  public  interest  review  is  whether  the  applicant  for  a  license  has  the  requisite  citizenship,  character,  financial,  technical,  and  other 
 qualifications.  81  Therefore,  as  a  threshold  matter,  the  Commission  must  determine  whether  the  Applicants  meet  the  requisite  qualifications  to  hold  and  transfer  licenses  under  section  310(  d)  of  the  Act 
 and  the  Commissions  rules.  82  In  making  this  determination,  the  Commission  does  not,  as  a  general  rule,  re-  evaluate  the  qualifications  of  transferors  unless  issues  related  to  basic  qualifications  have  been 
 designated  for  hearing  by  the  Commission  or  have  been  sufficiently  raised  in  petitions  to  warrant  the  designation  of  a  hearing.  83  As  a  required  part  of  our  public  interest  analysis,  however,  section  310(  d) 
 78  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21543    40;  Cingular-  NextWave  Order,  19  FCC  Rcd. 
 at  2580-  81    24  (2004);  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  483    15;  WorldCom,  Inc.  and  Its  Subsidiaries  (Debtors-  in-  Possession),  Transferor,  and  MCI,  Inc.,  Transferee,  WC  Docket  No.  02-  215,  Memorandum  Opinion 
 and  Order,  18  FCC  Rcd.  26484,  26492    12  (2003)  (  WorldCom  Order);  VoiceStream  Wireless  Corporation,  PowerTel,  Inc.,  Transferors,  and  Deutsche  Telekom  AG,  Transferee,  IB  Docket  No.  00-  187,  Memorandum  Opinion 
 and  Order,  16  FCC  Rcd.  9779,  9789    17  (2001)  (  Deutsche  Telekom-  VoiceStream  Order);  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14045,  14046    20,  22;  VoiceStream-  Omnipoint  Order,  15  FCC  Rcd.  at  3347    12;  AT&  T 
 Corp.-  British  Telecom.  Order,  14  FCC  Rcd.  at  19150    20;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18031    10;  Nextel-  WorldCom  Order,  19  FCC  Rcd.  at  6241-  42    23;  SBC-  BellSouth  Order,  15  FCC  Rcd.  at  25464,  25467    13, 
 18;  Bell  Atlantic-  Vodafone  Order,  15  FCC  Rcd.  at  16512,  16517    13,  25.  79 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21543    40;  Cingular-  NextWave  Order,  15  FCC  Rcd.  at  2581    24;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  483    15;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14046   
 22;  VoiceStream-  Omnipoint  Order,  15  FCC  Rcd.  at  3347    11;  SBC-  BellSouth  Order,  15  FCC  Rcd.  at  25464    13;  Bell  Atlantic-  Vodafone  Order,  15  FCC  Rcd.  at  16512    13;  Applications  for  Consent  to  the  Transfer  of  Control  of 
 Licenses  and  Section  214  Authorizations  from  Tele-  Communications,  Inc.,  Transferor,  to  AT&  T  Corp.,  Transferee,  CS  Docket  No.  98-  178,  Memorandum  Opinion  and  Order,  14  FCC  Rcd.  3160,  3169    15  (1999)  (  AT&  T-  TCI 
 Order);  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18031-  32    10.  80 
 47  U.  S.  C.    309(  e).  See  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21542-  43    40;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  483  n.  49;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14231    435;  WorldCom-  MCI  Order,  13 
 FCC  Rcd.  at  18139-  40    202.  Section  309(  e)  s  requirement  applies  only  to  those  applications  to  which  Title  III  of  the  Act  applies,  i.  e.,  radio  station  licenses.  We  are  not  required  to  designate  for  hearing  applications  for  the  transfer 
 or  assignment  of  Title  II  authorizations  when  we  are  unable  to  find  that  the  public  interest  would  be  served  by  granting  the  applications,  see  ITT  World  Communications,  Inc.  v.  FCC,  595  F.  2d  897,  901  (2d  Cir.  1979),  but  of 
 course  may  do  so  if  we  find  that  a  hearing  would  be  in  the  public  interest.  81 
 See  47  U.  S.  C.    308,  310(  d);  see  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  21546    44;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  485    18. 
 82  See  47  U.  S.  C.    310(  d);  47  C.  F.  R.    1.948;  see  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  21546    44; 
 Cingular-  NextWave  Order,  19  FCC  Rcd.  at  2581    25;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  485    18;  WorldCom  Order,  18  FCC  Rcd.  at  26493    13;  Deutsche  Telekom-  VoiceStream  Order,  16  FCC  Rcd.  at  9790    19; 
 Nextel-  WorldCom  Order,  19  FCC  Rcd  at  6242    24;  Global  Crossing  Order,  18  FCC  Rcd.  at  20316    18;  Northcoast  Communications,  LLC  and  Cellco  Partnership  d/  b/  a  Verizon  Wireless,  WT  Docket  No.  03-  19, 
 Memorandum  Opinion  and  Order,  18  FCC  Rcd.  6490,  6492    5  (CWD  2003)  (  Verizon-  Northcoast  Order).  83 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21546    44;  Cingular-  NextWave  Order,  19  FCC  Rcd.  at  2581-  82    25;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  485    18;  WorldCom  Order,  18  FCC  Rcd.  at  26493-  94   
 13;  Deutsche  Telekom-  VoiceStream  Order,  16  FCC  Rcd.  at  9790    19;  SBC-  BellSouth  Order,  15  FCC  Rcd.  at  25459,  25465    14  (2000);  Nextel-  WorldCom  Order,  19  FCC  Rcd.  at  6242    24;  Global  Crossing  Order,  18  FCC 
 (continued.) 
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 requires  the  Commission  to  consider  whether  the  proposed  transferee  is  qualified  to  hold  a  Commission  license.  84  When  evaluating  the  qualifications  of  a  potential  licensee,  the  Commission  previously  has 
 stated  that  it  will  review  allegations  of  misconduct  directly  before  it,  85  as  well  as  conduct  that  takes  place  outside  of  the  Commission.  86  In  this  proceeding,  no  issues  have  been  raised  with  respect  to  the  basic 
 qualifications  of  ALLTEL  and  WWC.  Thus,  we  find  that,  at  this  time,  there  is  no  reason  to  reevaluate  the  qualifications  of  ALLTEL  and  WWC. 
 19.  Our  public  interest  evaluation  necessarily  encompasses  the  broad  aims  of  the  Communications  Act,  87  which  include,  among  other  things,  a  deeply  rooted  preference  for  preserving 
 and  enhancing  competition  in  relevant  markets,  accelerating  private  sector  deployment  of  advanced  services,  ensuring  a  diversity  of  license  holdings,  and  generally  managing  the  spectrum  in  the  public 
 interest.  88  Our  public  interest  analysis  may  also  entail  assessing  whether  the  merger  will  affect  the  quality  of  communications  services  or  will  result  in  the  provision  of  new  or  additional  services  to  consumers.  89 
 (Continued  from  previous  page)  Rcd.  at  20316    18;  Verizon-  Northcoast  Order,  18  FCC  Rcd.  at  6492    5;  TeleCorp-  Tritel  Order,  16  FCC  Rcd.  at 
 3722    5.  See  also  Stephen  F.  Sewell,  Assignment  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  licensees  basic  qualifications  remain  unresolved  is  designed  to  prevent  licensees  from  evading  responsibility  for  misdeeds  committed  during  the  license  period.  See  id. 
 84  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21546    44;  Cingular-  NextWave  Order,  19  FCC  Rcd. 
 at  2582    25;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  485    18;  WorldCom  Order,  18  FCC  Rcd.  at  26494    13;  SBC-  BellSouth  Order,  15  FCC  Rcd.  at  25465    14;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14227    429;  Nextel-WorldCom 
 Order,  19  FCC  Rcd.  at  6242    24.  85 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21548    47;  WorldCom  Order,  18  FCC  Rcd.  at  26494    13.  The  Commission  will  consider  any  violation  of  any  provision  of  the  Act,  or  of  the  Commissions  rules  or 
 policies,  as  predicative  of  an  applicants  future  truthfulness  and  reliability  and,  thus,  as  having  a  bearing  on  an  applicants  character  qualifications.  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14227-  28    429;  Policy  Regarding 
 Character  Qualifications  In  Broadcast  Licensing  Amendment  of  Rules  of  Broadcast  Practice  and  Procedure  Relating  to  Written  Responses  to  Commission  Inquiries  and  the  Making  of  Misrepresentations  to  the  Commission  by 
 Permittees  and  Licensees,  Gen.  Docket  No.  81-  500,  Report  and  Order  and  Policy  Statement,  100  F.  C.  C.  2d  1179,  1209-  10    57  (1986),  modified,  5  FCC  Rcd.  3252  (1990),  recon.  granted  in  part,  6  FCC  Rcd.  3448  (1991),  modified 
 in  part,  7  FCC  Rcd.  6564  (1992).  86 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21548    47;  WorldCom  Order,  18  FCC  Rcd.  at  26494  13.  The  Commission  previously  has  determined  that  in  its  review  of  character  issues,  it  will  consider  forms  of 
 adjudicated,  non-  Commission  related  misconduct  that  include:  (1)  felony  convictions;  (2)  fraudulent  misrepresentations  to  governmental  units;  and  (3)  violations  of  antitrust  or  other  laws  protecting  competition.  See, 
 e.  g.,  Bell  Atlantic-  GTE  Merger  Order,  15  FCC  Rcd.  at  14227-  28    429.  87 
 E.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    41;  see  also  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  483    16;  VoiceStream-  Omnipoint  Order,  15  FCC  Rcd.  at  3346-  47    11;  AT&  T  Corp.-  British  Telecom.  Order,  14 
 FCC  Rcd.  at  19146    14;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18030    9.  88 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    41;  47  U.  S.  C.    157  nt,  254,  332(  c)(  7),  Telecommunications  Act  of  1996,  Preamble;  see  also  Cingular-  NextWave  Order,  19  FCC  Rcd.  at  2583    29;  GM-News 
 Corp.  Order,  19  FCC  Rcd.  at  483-  84    16;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18030-  31    9;  Nextel-WorldCom  Order,  19  FCC  Rcd.  at  6244    29;  2000  Biennial  Regulatory  Review  Spectrum  Aggregation  Limits  for 
 Commercial  Mobile  Radio  Services,  Report  and  Order,  16  FCC  Rcd.  22668,  22696    55  (2001)  (  Spectrum  Aggregation  R&  O)  (citing  47  U.  S.  C.    301,  303,  309(  j),  310(  d));  cf.  47  U.  S.  C.    521(  4),  532(  a). 
 89  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    41;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at 
 18031    9. 
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 In  conducting  this  analysis,  the  Commission  may  consider  technological  and  market  changes,  and  the  nature,  complexity,  and  speed  of  change  of,  as  well  as  trends  within,  the  communications  industry.  90 
 20.  In  determining  the  competitive  effects  of  the  merger,  our  analysis  is  not  limited  by  traditional  antitrust  principles.  91  The  Commission  and  DOJ  each  have  independent  authority  to  examine 
 telecommunications  mergers,  but  the  standards  governing  the  Commissions  review  differ  from  those  of  DOJ.  92  DOJ  reviews  mergers  pursuant  to  section  7  of  the  Clayton  Act,  which  prohibits  mergers  that  are 
 likely  to  lessen  competition  substantially  in  any  line  of  commerce.  93  The  Commission,  on  the  other  hand,  is  charged  with  determining  whether  the  transfer  of  licenses  serves  the  broader  public  interest.  In  the 
 communications  industry,  competition  is  shaped  not  only  by  antitrust  rules,  but  also  by  the  regulatory  policies  that  govern  the  interactions  of  industry  players.  94  In  addition  to  considering  whether  the  merger 
 will  reduce  existing  competition,  therefore,  we  also  must  focus  on  whether  the  merger  will  accelerate  the  decline  of  market  power  by  dominant  firms  in  the  relevant  communications  markets  and  the  mergers 
 effect  on  future  competition.  95  We  also  recognize  that  the  same  consequences  of  a  proposed  merger  that  are  beneficial  in  one  sense  may  be  harmful  in  another.  For  instance,  combining  assets  may  allow  the 
 merged  entity  to  reduce  transaction  costs  and  offer  new  products,  but  it  may  also  create  market  power,  create  or  enhance  barriers  to  entry  by  potential  competitors,  and  create  opportunities  to  disadvantage 
 rivals  in  anticompetitive  ways.  96 
 21.  Our  public  interest  authority  also  enables  us  to  impose  and  enforce  narrowly  tailored,  transaction-  specific  conditions  that  ensure  that  the  public  interest  is  served  by  the  transaction.  97  These 
 conditions  may  include  the  divestiture  of  certain  licenses  along  with  associated  facilities  and  customers,  for  example.  Section  303(  r)  of  the  Communications  Act  authorizes  the  Commission  to  prescribe 
 restrictions  or  conditions,  not  inconsistent  with  law,  that  may  be  necessary  to  carry  out  the  provisions  of 
 90  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    41;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at 
 18031    9.  91 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    42;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  484    17;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14046    23;  AT&  T-  TCI  Order,  14  FCC  Rcd.  at  3168-  69    14; 
 WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18033    13.  See  also  Satellite  Business  Systems,  62  F.  C.  C.  2d  997,  1088  (1977),  affd  sub  nom  United  States  v.  FCC,  652  F.  2d  72  (DC  Cir.  1980)  (en  banc);  Northern  Utilities  Service  Co. 
 v.  FERC,  993  F.  2d  937,  947-  48  (1  st  Cir.  1993)  (public  interest  standard  does  not  require  agencies  to  analyze  proposed  mergers  under  the  same  standards  that  the  Department  of  Justice  .  .  .  must  apply). 
 92  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21544    42;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at 
 484    17;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14046    23;  AT&  T-  TCI  Order,  14  FCC  Rcd.  at  3169    14;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18033    12. 
 93  15  U.  S.  C.    18. 
 94  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545    42. 
 95  See  id.;  see  also  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14047    23;  AT&  T  Corp.-  British  Telecom.  Order,  14 
 FCC  Rcd.  at  19150    15.  96 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545    42.  97 
 See,  e.  g.,  id.  at  21545    43  (conditioning  approval  on  the  divestiture  of  operating  units  in  select  markets);  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14047    24;  AT&  T  Corp.-  British  Telecom.  Order,  14  FCC  Rcd.  at  19150    15. 
 See  also  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18032    10  (conditioning  approval  on  the  divesture  of  MCIs  Internet  assets);  Deutsche  Telekom-  VoiceStream  Wireless  Order,  16  FCC  Rcd.  9779  (2001)  (conditioning  approval 
 on  compliance  with  agreements  with  Department  of  Justice  and  Federal  Bureau  of  Investigation  addressing  national  security,  law  enforcement,  and  public  safety  concerns). 
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 the  Act.  98  Similarly,  section  214(  c)  of  the  Act  authorizes  the  Commission  to  attach  to  the  certificate  such  terms  and  conditions  as  in  its  judgment  the  public  convenience  and  necessity  may  require.  99  Indeed, 
 unlike  the  role  of  antitrust  enforcement  agencies,  our  public  interest  authority  enables  us  to  rely  upon  our  extensive  regulatory  and  enforcement  experience  to  impose  and  enforce  conditions  to  ensure  that  the 
 merger  will  yield  overall  public  interest  benefits.  100  Despite  our  broad  authority,  we  have  held  that  we  will  impose  conditions  only  to  remedy  harms  that  arise  from  the  transaction  (i.  e.,  transaction-  specific 
 harms)  101  and  that  are  fairly  related  to  the  Commissions  responsibilities  under  the  Communications  Act  and  related  statutes.  102  Thus,  we  will  not  impose  conditions  to  remedy  pre-  existing  harms  or  harms  that 
 are  unrelated  to  the  transaction.  103 
 IV.  COMPETITIVE  ANALYSIS 
 22.  In  our  analysis  of  this  transactions  effects  on  mobile  telephony,  we  consider,  first,  horizontal  issues  (those  related  to  increased  concentration  within  a  market)  and,  second,  vertical  issues  (those  related 
 to  impacts  across  related  markets).  Our  primary  focus  is  on  horizontal  effects.  Horizontal  mergers  lead  to  a  loss  of  a  competitor,  and  such  loss  can  lead  to  a  diminution  in  competition.  Mergers  raise  competitive 
 concerns  when  they  reduce  the  availability  of  substitute  choices  to  the  point  that  the  merged  firm  has  the  incentive  and  the  ability,  either  by  itself  or  in  coordination  with  other  firms,  to  raise  prices.  104  The  ability 
 to  raise  prices  above  competitive  levels  is  generally  referred  to  as  market  power.  Market  power  may  also  enable  sellers  to  reduce  competition  on  dimensions  other  than  price,  including  innovation  and  service 
 98  47  U.  S.  C.    303(  r).  See  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545    43;  Bell  Atlantic-  GTE 
 Order,  15  FCC  Rcd.  at  14047    24;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18032    10  (citing  FCC  v.  Natl  Citizens  Comm.  for  Broadcasting,  436  U.  S.  775  (1978)  (upholding  broadcast-  newspaper  cross-  ownership  rules 
 adopted  pursuant  to  section  303(  r));  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157,  178  (1968)  (section  303(  r)  powers  permit  Commission  to  order  cable  company  not  to  carry  broadcast  signal  beyond  stations  primary 
 market);  United  Video,  Inc.  v.  FCC,  890  F.  2d  1173,  1182-  83  (D.  C.  Cir.  1989)  (syndicated  exclusivity  rules  adopted  pursuant  to  section  303(  r)  authority). 
 99  47  U.  S.  C.    214(  c).  See  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545    43;  Bell  Atlantic-  GTE 
 Order,  15  FCC  Rcd.  at  14047    24;  AT&  T  Corp.-  British  Telecom.  Order,  14  FCC  Rcd.  at  19150    15.  100 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545    43;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  477    5;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd.  at  14047-  48    24;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18034- 
 35    14.  See  also  Schurz  Communications,  Inc.  v.  FCC,  982  F.  2d  1043,  1049  (7  th  Cir.  1992)  (discussing  Commissions  authority  to  trade  off  reduction  in  competition  for  increase  in  diversity  in  enforcing  public  interest 
 standard).  101 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21545-  46    43;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  534    131. 
 102  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21546    43. 
 103  See  id.;  GM-  News  Corp.  Order,  19  FCC  Rcd.  at  534    131  (  An  application  for  a  transfer  of  control  of 
 Commission  licenses  is  not  an  opportunity  to  correct  any  and  all  perceived  imbalances  in  the  industry.  These  issues  are  best  left  to  broader  industry-  wide  proceedings.). 
 104  See,  e.  g.,  Horizontal  Merger  Guidelines,  issued  by  the  U.  S.  Department  of  Justice  and  the  Federal  Trade 
 Commission,  at    0.1  (Apr.  2,  1992,  revised  Apr.  8,  1997)  (  DOJ/  FTC  Merger  Guidelines);  Regulatory  Treatment  of  LEC  Provision  of  Interexchange  Services  Originating  in  the  LECs  Local  Exchange  Area  and  Policy  and  Rules 
 Concerning  the  Interstate,  Interexchange  Marketplace,  Second  Report  and  Order  in  CC  Docket  No.  96-  149  and  Third  Report  and  Order  in  CC  Docket  No.  96-  61,  12  FCC  Rcd.  15756,  15802-  03    83  (1997);  Policy  and  Rules 
 Concerning  Rates  for  Competitive  Common  Carrier  Services  and  Facilities  Authorizations  Therefor,  Fourth  Report  and  Order,  95  F.  C.  C.  2d  554,  558    7-  8  (1983),  vacated  on  other  grounds,  AT&  T  v.  FCC,  978  F.  2d  727  (D.  C.  Cir. 
 1992),  cert.  denied,  MCI  Telecommunications  Corp.  v.  AT&  T,  113  S.  Ct.  3020  (1993). 
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 quality.  105  A  fundamental  tenet  of  the  Commissions  public  interest  review  is  that,  absent  significant  offsetting  efficiencies  or  other  public  interest  benefits,  a  transaction  that  creates  or  enhances  significant 
 market  power  or  facilitates  its  use  is  unlikely  to  serve  the  public  interest. 
 23.  A  horizontal  transaction  is  unlikely  to  create  or  enhance  market  power  or  facilitate  its  exercise  unless  the  transaction  significantly  increases  concentration  and  results  in  a  concentrated  market, 
 properly  defined  and  measured.  106  Transactions  that  do  not  significantly  increase  concentration  or  do  not  result  in  a  concentrated  market  ordinarily  require  no  further  competitive  analysis  (although  we  separately 
 consider  the  spectrum  holdings  that  would  occur  post-  merger).  Market  concentration  is  generally  measured  by  the  Herfindahl-  Hirschman  Index  (  HHI)  and  changes  in  concentration  are  measured  by  the 
 change  in  HHI.  However,  HHI  data  provide  only  the  beginning  of  the  analysis.  The  Commission  then  examines  other  market  factors  that  pertain  to  competitive  effects,  including  the  incentive  and  ability  of 
 other  firms  to  react  and  of  new  firms  to  enter  the  market.  Ultimately,  the  Commission  must  assess  whether  it  is  likely  that  the  merged  firm  could  exercise  market  power  in  any  particular  market. 
 24.  We  begin  by  determining  the  appropriate  market  definitions  to  employ  for  the  analysis,  as  well  as  identifying  relevant  market  participants.  We  then  measure  the  degree  of  market  concentration. 
 Next,  we  consider  the  possible  competitive  harms  that  could  occur  due  to  a  significant  increase  in  market  concentration  or  market  power.  Mergers  can  diminish  competition  and  firms  can  exercise  market  power 
 in  a  number  of  ways.  A  merger  may  create  market  power  in  a  single  firm  and  allow  that  firm  to  act  on  its  own  in  raising  prices,  lowering  quality,  reducing  innovation,  or  restricting  deployment  of  new 
 technologies  or  services.  A  merger  may  also  diminish  competition  if  it  makes  the  firms  selling  in  the  market  more  likely  to  engage  in  coordinated  interaction  that  harms  consumers.  This  behavior  includes 
 tacit  or  express  collusion  and  may  or  may  not  be  lawful  in  and  of  itself.  The  effects  of  such  coordinated  behavior  may  include  increased  prices,  reduced  number  of  minutes  in  a  given  price  plan,  degraded  output 
 quality,  or  some  combination  of  these  effects.  Perhaps  more  importantly,  it  may  also  include  dynamic  effects  such  as  reduced  innovation  and  restricted  deployment  of  new  technologies  and  services. 
 A.  Market  Definition 
 1.  Product  Market  Definition 
 25.  When  one  product  is  considered  by  consumers  to  be  a  reasonable  substitute  for  another  product,  it  is  included  in  the  relevant  market.  Thus,  the  relevant  market  includes  all  products  that 
 consumers  consider  reasonably  interchangeable  for  the  same  purposes.    107  A  relevant  product  market  is  the  smallest  group  of  competing  products  or  services  for  which  a  hypothetical  monopolist  in  a  geographic 
 105  DOJ/  FTC  Merger  Guidelines    0.1,  n.  6. 
 106  Id.    1.0. 
 107  United  States  v.  E.  I.  du  Pont  de  Nemours  &  Co.,  351  U.  S.  377,  395  (1956).  See  also  United  States  v.  Microsoft, 
 253  F.  3d  34,  52  (D.  C.  Cir.),  cert.  denied,  122  S.  Ct.  350  (2001)  (in  determining  what  is  a  reasonable  substitute,  the  court  excluded  middleware  software  from  the  definition  of  the  relevant  product  market  because  of  its  present  non-interchangeability 
 with  Windows,  despite  its  future  long-  term  potential);  Wireless  Telephone  Services  Antitrust  Litigation,  No.  02  Civ.  2637(  DLC),  2003  WL  21912603,  at  9  (S.  D.  N.  Y.  Aug.  12,  2003)  (relevant  product  market 
 consists  of  products  that  have  reasonable  interchangeability  for  the  purposes  for  which  they  are  produced    price,  use  and  qualities  considered.). 
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 area  could  profitably  impose  at  least  a  small  but  significant  and  non-  transitory  price  increase,  presuming  no  change  in  the  terms  of  sale  of  other  products  (the  hypothetical  monopolist  test).  108 
 26.  In  their  Application,  ALLTEL  and  WWC  assert  that  the  Commission  should  adopt  in  this  proceeding  the  product  market  definition  used  in  the  Cingular-  AT&  T  Wireless  Order.  109  In  that  order,  the 
 Commission  found  that  separate  markets  exist  for  interconnected  mobile  voice  and  mobile  data  services,  and  also  for  residential  and  enterprise  services.  110  However,  in  performing  its  analysis,  the  Commission 
 decided  that  analyzing  the  Cingular-  AT&  T  Wireless  transaction  using  a  combined  market  for  mobile  telephony  services  was  unlikely  to  understate  potential  competitive  harm.  111  None  of  the  petitioners  or 
 commenters  commented  on  product  market  definition. 
 27.  For  the  purposes  of  evaluating  this  transaction,  we  use  the  hypothetical  monopolist  test  to  determine  the  relevant  product  markets.  To  conduct  this  test,  first  we  assume  that  a  hypothetical 
 monopolist  within  a  geographic  area  offers  one  of  the  differentiated  mobile  telephony  products  such  as  stand-  alone  data  services  or  a  regional  rate  plan.  Then,  we  assume  that  this  monopolist  imposes  a  small 
 but  significant  and  non-  transitory  price  increase  for  this  mobile  telephony  service,  and  finally  we  evaluate  the  likely  response  of  consumers  to  this  price  increase.  If  the  extent  of  demand  substitution  is  such  that 
 the  monopolist  could  profitably  impose  a  small  but  significant  and  non-  transitory  increase  in  price  (SSNIP)  for  a  particular  product,  then  this  product  may  be  defined  as  a  relevant  product  market. 
 28.  Using  this  test,  we  find  that  there  are  separate  markets  for  interconnected  mobile  voice  services  112  and  mobile  data  services,  113  and  also  for  residential  services  and  enterprise  services.  As  we 
 explain  herein,  however,  we  do  not  find  it  necessary  to  conduct  our  analysis  in  this  transaction  by  distinguishing  mobile  data  subscribers  from  mobile  voice  subscribers,  or  enterprise  subscribers  from 
 residential  subscribers. 
 29.  Instead  of  a  separate  analysis  of  the  mobile  voice  and  mobile  data  markets,  however,  we  will  analyze  both  of  them  under  the  combined  market  for  mobile  telephony  services.  We  do  this  because  we 
 conclude  from  our  analysis  that  the  market  for  stand-  alone  mobile  data  services  is  not  sufficiently  developed  at  this  time  to  subject  to  a  credible  antitrust  review.  Accordingly,  we  determine  that  an 
 analysis  based  on  combined  mobile  telephony  services  will  provide  a  reasonable  assessment  of  any  potential  competitive  harm  to  the  markets  for  mobile  voice  or  data  services  as  a  result  of  the  proposed 
 transaction. 
 108  DOJ/  FTC  Merger  Guidelines    1.11,  1.12.  See  also  Gregory  Werden,  The  1982  Merger  Guidelines  and  the 
 Ascent  of  the  Hypothetical  Monopolist  Paradigm,  71  ANTITRUST  L.  J.  253  (2003).  109 
 See  Application,  Exhibit  1  at  8-  9.  110 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21558    74.  111 
 See  id.  at  21588,  21560    74,  77,  79.  112 
 Interconnected  mobile  voice  consists  of  all  commercially  available  two-  way  mobile  voice  services  providing  access  to  the  public  switched  telephone  network  via  mobile  communications  devices  employing  radiowave 
 technology  to  transmit  calls.  See  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, 
 WT  Docket  No.  04-  111,  Ninth  Report,  19  FCC  Rcd.  20597,  20611-  12    32  (2004)  (  Ninth  Competition  Report).  113 
 Mobile  data  service  is  considered  to  be  the  delivery  of  non-  voice  information  to  a  mobile  device.  Two-  way  mobile  data  services  include  the  ability  not  only  to  receive  non-  voice  information  on  an  end-  user  device,  but  also  to 
 send  it  from  an  end-  user  device  to  another  mobile  or  landline  device  using  wireless  technology.  Data  services  available  today  include,  but  are  not  limited  to,  short  messaging  service,  email,  and  access  to  the  internet.  See  id.  at 
 20613    33. 
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 30.  Turning  to  the  enterprise  and  residential  product  markets,  we  note  that  most  mobile  telephony  service  subscribers  are  residential  customers.  Thus,  an  analysis  based  on  subscriber  shares  for 
 a  combined  mobile  telephony  services  market  will  tend  to  provide  more  accurate  insights  into  the  residential  market  than  the  enterprise  market.  However,  analyzing  a  combined  residential  and  enterprise 
 product  market  should  provide  a  fair  assessment  of  the  potential  competitive  harm  to  the  enterprise  service  market.  This  is  because  competition  among  carriers  to  attract  and  retain  enterprise  customers, 
 who  are  more  likely  to  be  high-  volume  users  of  mobile  voice  services  than  residential  customers,  is  likely  to  be  more  intense  than  competition  for  residential  customers.  114 
 31.  The  mobile  telephony  services  product  market  also  may  be  characterized  by  a  geographic  dimension.  Carriers  offer  plans  providing  nationwide  service  (without  expensive  added  charges)  and 
 plans  providing  local/  regional  service.  For  purposes  of  this  transaction,  we  do  not  define  separate  nationwide  and  local/  regional  product  markets,  but  our  analysis  does  take  into  account  that  local/  regional 
 plans  are  differentiated  from  nationwide  plans. 
 2.  Geographic  Market  Definition 
 32.  The  Supreme  Court  defined  a  relevant  geographic  market  as  the  area  in  which  consumers  can  reasonably  search  for  competing  services.  115  It  is  commonly  defined  in  the  economic  literature  as  the 
 geographic  area  in  which  a  hypothetical  monopolist  could  profitably  impose  at  least  a  small  but  significant  and  nontransitory  increase  in  the  price  of  the  relevant  product,  assuming  that  the  prices  of  all 
 products  provided  elsewhere  do  not  change.  116 
 33.  In  their  Application,  the  Applicants  request  that  the  Commission  adopt  the  geographic  market  definition  used  in  the  Cingular-  AT&  T  Wireless  Order.  117  In  that  order,  we  held  that  the  proper 
 geographic  market  was  a  local  one,  118  rejecting  the  parties  claim  of  a  national  market.  119  None  of  petitioners  or  commenters  raised  the  geographic  market  definition  in  their  submissions. 
 34.  For  the  purposes  of  evaluating  this  transaction,  we  use  the  hypothetical  monopolist  test  to  determine  the  relevant  market  by  asking  what  is  the  smallest  geographic  area  in  which  a  hypothetical 
 monopolist  could  profitably  and  permanently  impose  a  small  but  significant  price  increase.  In  asking  this  question,  we  assume  that  buyers  of  wireless  services  would  respond  to  a  price  increase  by  switching  to 
 wireless  services  purchased  in  a  different  location  rather  than,  by  switching  to  different  wireless  services.  As  discussed  below,  we  find  that  the  proper  geographic  market  is  local,  not  national. 
 114  See,  e.  g.,  Holly  Wade,  Telecommunications,  8  NATL  SMALL  BUS.  POLL,  Issue  8,  at  4-  6  (2004).  See  also 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21560    79.  115 
 See  Tampa  Electric  Co.  v.  Nashville  Coal  Co.,  365  U.  S.  320,  327  (1961);  United  States  v.  Philadelphia  Natl  Bank,  374  U.  S.  321,  359  (1963). 
 116  The  relevant  geographic  market  selected  for  analysis  must  also  reflect  the  commercial  realities  of  the  industry. 
 See  Arthur  S.  Langenderfer,  Inc.  v.  S.  E.  Johnson  Co.,  917  F.  2d  1413,  1421  (6  th  Cir.  1991)  (quoting  Brown  Shoe  Co.  v.  United  States,  370  U.  S.  294,  336-  37  (1962));  RSR  Corp.  v.  FTC,  602  F.  2d  1317,  1323  (9  th  Cir.  1979)  (same). 
 117  See  Application,  Exhibit  1  at  9;  Declaration  of  Robert  D.  Willig,  Jonathan  M.  Orszag,  and  Yair  Eilat  at  5-  6    8-9 
 (Mar.  29,  2005)  (  Declaration  of  Willig  et  al.),  available  at  March  29,  2005  Response  to  Information  Request  at  Attachment  2;  see  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21561-  63    82-  90. 
 118  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21562-  63    89. 
 119  See  id.  at  21562    87. 
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 35.  For  the  proposed  transaction,  the  geographic  market  is  generally  the  area  within  which  a  consumer  is  most  likely  to  shop  for  mobile  telephony  service.  For  most  individuals,  we  believe  this  will 
 be  a  local  area,  as  opposed  to  a  larger  regional  or  nationwide  area.  In  most  parts  of  the  United  States,  we  find  that  the  areas  within  which  consumers  regularly  shop  for  wireless  services  are  larger  than  counties, 
 may  encompass  multiple  counties,  and,  depending  on  an  individuals  location,  may  even  include  parts  of  more  than  one  state.  120 
 36.  We  recognize  that  local  geographic  markets  are  unique  because  they  depend  on  where  consumers  travel  to  purchase  wireless  services.  Thus,  if  a  hypothetical  monopolist  were  to  impose  a 
 small,  non-  transitory  price  increase  for  mobile  telephony  services  within  a  single  county,  it  would  likely  be  unprofitable  because  significant  numbers  of  consumers  would  be  able  to  circumvent  the  higher  price 
 by  obtaining  a  reasonably  comparable  service  at  a  lower  price  in  a  nearby  county.  121 
 3.  Market  Participants 
 37.  The  Applicants  argue  that  they  compete  not  only  with  facilities-  based  Cellular,  PCS,  and  Specialized  Mobile  Radio  (  SMR)  providers  but  with  other  market  participants  as  well.  These  other 
 market  participants  include  resellers,  satellite  providers  of  interconnected  mobile  voice  services,  mobile  virtual  network  operators  (  MVNOs),  and  wireless  Voice  over  Internet  Protocol  (  VOIP)  providers.  122 
 38.  We  find  that  mobile  telephony  services  offered  by  Cellular,  PCS,  and  SMR  licensees,  despite  employing  varying  technologies,  provide  the  same  basic  voice  and  data  functionality  and  are 
 indistinguishable  to  the  consumer.  Generally,  we  limit  our  analysis  to  Cellular,  PCS,  and  SMR  facilities-based  carriers  and  exclude  satellite  carriers,  wireless  VOIP  providers,  MVNOs,  and  resellers  123  from 
 consideration  when  computing  initial  measures  of  market  concentration.  Although  satellite  providers  offer  facilities-  based  mobile  voice  and  data  services,  the  price  of  these  services  is  significantly  higher  than 
 for  services  offered  by  Cellular,  PCS,  or  SMR  carriers.  Therefore,  most  consumers  would  not  view  satellite  phones  as  substitutes  for  mobile  telephony  services.  124  We  also  do  not  consider  wireless  VOIP 
 carriers  as  providing  the  same  functionality  as  mobile  telephony  providers  because  in  general  the  service  they  provide  is  nomadic  rather  than  mobile.  We  acknowledge,  however,  that  non-  facilities  based  service 
 120  See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20606  n.  24,  20672    185  (indicating  that  average  person  shops 
 for  mobile  telephony  services  in  markets  that  include  place  of  work,  place  of  residence,  and  surrounding  areas  that  are  economically  related;  such  areas  generally  are  larger  than  counties);  discussion  infra  paras.  44-  45  (discussing 
 size  of  economically-  related  areas  in  which  consumers  would  be  expected  to  shop  for  wireless  services,  citing  Kenneth  P.  Johnson  &  John  R.  Kort,  2004  Redefinition  of  the  BEA  Economic  Areas,  SURV.  OF  CURRENT  BUS.,  Nov. 
 2004,  at  68-  71).  See  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21562-  63    89-  90.  121 
 We  assume  that,  although  the  hypothetical  monopolist  is  the  only  seller  of  service  in  the  county,  customers  can  still  receive  service  in  the  county  if  they  purchase  their  service  elsewhere,  because  there  are  other  carriers  who  serve 
 the  county  but  do  not  have  stores  there,  or  because  other  carriers  have  roaming  agreements  with  the  hypothetical  monopolist  at  prices  that  are  not  passed  on  to  the  customer,  or  because  the  customer  can  purchase  service  from  the 
 hypothetical  monopolist  itself  in  a  different  county  at  a  lower  price.  As  to  the  last  point,  we  note  that  wireless  carriers  do  not  charge  their  customers  different  prices  for  service  on  different  portions  of  their  own  network. 
 122  See  Application,  Exhibit  1  at  14-  15;  see  also  Declaration  of  Willig  et  al.  at  14,  15    27,  29. 
 123  Today,  resellers  are  often  referred  to  as  MVNOs.  MVNOs  are  distinguished  from  traditional  resellers  by  a 
 variety  of  factors  including  brand  appeal,  distribution  channels,  bundling  of  wireless  and  non-  wireless  products,  and  value-  added  services.  See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20613    38  n.  71. 
 124  See  GlobalCom,  Iridium  Satellite  Phone  Service  Plans,  at  http://  www.  globalcomsatphone.  com/  satellite/ 
 services/  iridium_  service_  plans.  html  (last  viewed  May  20,  2005);  GlobalStar,  Airtime  Pricing,  Voice  Pricing,  at  http://  www.  globalstarusa.  com/  en/  airtime/  voicepricing/  (last  viewed  May  20,  2005). 
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 options  such  as  MVNOs  and  resellers  have  an  impact  in  the  marketplace  and  in  some  instances  may  provide  additional  constraints  against  anticompetitive  behavior.  We  take  account  of  the  role  of  MVNOs 
 and  resellers  in  our  discussion  of  likely  competitive  effects,  below.  125 
 39.  We  conclude  that  all  the  facilities-  based  Cellular,  PCS,  and  SMR  carriers  that  provide  service  in  a  geographic  area  are  the  relevant  market  participants  for  purposes  of  analyzing  the  mobile  telephony 
 service  market  for  that  area. 
 B.  Potential  Competitive  Harms 
 1.  Market  Concentration 
 40.  In  this  analysis  we  consider  whether  there  is  a  substantial  likelihood  that  the  merger  will  result  in  anticompetitive  effects,  such  as  higher  prices,  reduced  features  in  a  given  service  plan,  slower 
 rollout  of  advanced  network  capabilities,  or  reduced  incentives  to  innovate.  Concentration  in  the  relevant  markets  is  one  indicator  of  the  likely  competitive  effects  of  a  proposed  merger.  Market  concentration 
 affects  the  likelihood  that  one  firm,  or  a  small  group  of  firms,  could  successfully  exercise  market  power. 
 41.  Also,  we  find  it  appropriate  to  consider  directly  the  input  market  of  spectrum  that  is  suitable  for  provision  of  mobile  telephony  services.  Suitability  is  determined  by  the  physical  properties  of  the 
 spectrum,  the  state  of  equipment  technology,  whether  the  spectrum  is  licensed  with  a  mobile  allocation  and  corresponding  service  rules,  and  whether  the  spectrum  is  committed  to  another  use  that  effectively 
 precludes  its  uses  for  mobile  telephony.  126  The  spectrum  that  meets  the  above  suitability  criteria  includes  Cellular,  PCS,  and  SMR  spectrum  and  currently  totals  approximately  200  megahertz  of  spectrum.  127 
 42.  Therefore,  in  the  following  discussion,  we  assess  the  current  market  concentration,  the  post-transaction  market  concentration,  and  the  increase  in  concentration  that  is  likely  to  result  from  the 
 transaction.  128  Further,  spectrum  is  an  essential  input  for  the  provision  of  facilities-  based  service,  and  therefore  we  will  assess  the  effects  of  spectrum  aggregation  on  the  provision  of  mobile  telephony 
 services. 
 125  The  resale  sector  accounts  for  approximately  5  percent  of  all  mobile  telephony  subscribers.  See  Ninth 
 Competition  Report,  19  FCC  Rcd.  at  20613    38.  126 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21560-  61    80.  127 
 Id.  at  21561    81.  In  the  Cingular-  AT&  T  Wireless  Order,  we  noted  that  Advanced  Wireless  Service  (  AWS)  and  Broadband  Radio  Service  (  BRS)  spectrum  does  not  currently  meet  our  criteria  because  it  is  committed  to  non-mobile 
 telephony  uses  currently  and  for  the  near-  term  future.  Id.  at  n.  283.  Subsequent  to  the  adoption  of  the  Cingular-  AT&  T  Wireless  Order,  Congress  adopted  the  Commercial  Spectrum  Enhancement  Act,  Public  Law  No. 
 108-  494  (2004),  enabling  the  Commission  to  announce  its  intent  to  auction  AWS  licenses  as  early  as  June  2006.  FCC  to  Commence  Spectrum  Auction  that  Will  Provide  American  Consumers  New  Wireless  Broadband  Services, 
 News  Release  (rel.  Dec.  29,  2004).  Accordingly,  some  portion  of  this  spectrum  may  well  be  licensed  in  the  near-term  future.  Nevertheless,  given  the  federal  and  non-  federal  encumbrance  of  1710-  1755  MHz  and  2110-  2155  MHz 
 in  many  markets,  we  conclude  that  it  is  still  premature  to  classify  the  AWS  spectrum  as  suitable  for  the  provision  of  mobile  telephony  services  for  purposes  of  our  analysis  here.  The  Commission  will  revisit  the  suitability  of  the 
 AWS  spectrum,  and  other  spectrum  potentially  suitable  for  mobile  telephony  services,  as  events  require.  128 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21564    95;  EchoStar-  DirecTV  Order,  17  FCC  Rcd.  at  20603-  04    97-  98;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18047-  48    36-  37;  see  also  DOJ/  FTC  Merger 
 Guidelines    1.  51  (  In  evaluating  horizontal  mergers,  the  Agency  will  consider  both  the  post-  merger  market  concentration  and  the  increase  in  concentration  resulting  from  the  merger.);  FTC  v.  H.  J.  Heinz  Co.,  246  F.  3d  708, 
 715-  17,  (D.  C.  Cir.  2001). 
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 43.  For  this  transaction,  we  use  our  Numbering  Resource  Utilization  and  Forecast  (NRUF)  database,  which  tracks  phone  number  usage  by  all  telecommunications  carriers,  including  wireless 
 carriers,  in  the  United  States.  129  We  can  use  the  information  from  this  database  to  estimate  mobile  telephone  subscribership  levels,  market  shares,  and  penetration  rates  for  various  geographic  market 
 definitions.  130  In  the  Cingular-  AT&  T  Wireless  transaction,  we  also  used  billing  data  submitted  by  the  nationwide  carriers.  131  Although  we  may  decide  to  collect  such  billing  data  as  part  of  our  review  of  future 
 transactions,  we  found  that  the  competitive  situation  was  such  that  a  collection  of  third-  party  billing  data  was  unnecessary. 
 44.  In  calculating  market  shares  and  market  concentration,  we  analyzed  carrier  data  by  two  sets  of  geographic  areas,  CEAs  and  CMAs.  CEAs,  which  are  defined  by  the  Bureau  of  Economic  Analysis, 
 are  composed  of  a  single  economic  node  and  surrounding  counties  that  are  economically  related  to  the  node.  132  CMAs  are  the  regions  originally  used  by  the  Commission  for  issuing  Cellular  licenses.  There 
 are  734  CMAs,  made  up  of  305  Metropolitan  Statistical  Areas  (  MSAs),  428  Rural  Service  Areas  (  RSAs),  133  and  a  market  for  the  Gulf  of  Mexico.  134 
 45.  We  chose  the  CEA  and  CMA  geographic  areas  for  our  data  analysis.  Both  are  consistent  with  the  local  market  definition  we  have  adopted  and  each  brings  a  different  perspective  to  the  analysis. 
 CEAs  were  designed  to  represent  consumers  patterns  of  normal  travel  for  personal  and  employment  reasons  135  and  should  replicate  areas  within  which  groups  of  consumers  would  be  expected  to  shop  for 
 wireless  service.  136  In  addition,  CEAs  generally  constitute  areas  within  which  any  service  providers 
 129  These  data  indicate  the  number  of  assigned  phone  numbers  that  a  wireless  carrier  has  in  a  particular  wireline  rate 
 center.  Rate  centers  are  geographic  areas  used  by  local  exchange  carriers  for  a  variety  of  reasons,  including  the  determination  of  toll  rates.  See  HARRY  NEWTON,  NEWTONS  TELECOM  DICTIONARY:  19  TH  EXPANDED  &  UPDATED 
 EDITION  660  (July  2003).  All  mobile  wireless  carriers  must  report  to  the  FCC  the  quantity  of  their  phone  numbers  that  have  been  assigned  to  end  users,  thereby  permitting  the  Commission  to  calculate  the  total  number  of  mobile 
 subscribers.  130 
 For  purposes  of  geographical  analysis,  the  rate  center  data  can  be  associated  with  a  geographic  point,  and  all  of  those  points  that  fall  within  a  county  boundary  can  be  aggregated  together  and  associated  with  much  larger 
 geographic  areas  based  on  counties.  131 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21567    103  (stating  that,  in  response  to  a  staff  data  request,  data  was  received  from  AT&  T  Wireless,  Cingular,  Nextel,  T-  Mobile,  Sprint,  and  Verizon). 
 132  There  are  348  CEAs  in  the  50  States  and  the  District  of  Columbia.  Of  the  3,141  U.  S.  counties,  2,267  are  non-nodal 
 counties  that  are  assigned  to  a  CEA  based  first  on  county-  to-  county  commuting  flows  from  the  1990  Census  and  second  on  locations  of  the  most  widely  read  regional  newspapers.  Three  quarters  of  non-  nodal  counties  were 
 assigned  based  on  commuting  patterns.  See  Kenneth  P.  Johnson,  Redefinition  of  the  BEA  Economic  Areas,  SURV.  OF  CURRENT  BUS.,  Feb.  1995,  at  75-  81.  In  November  2004,  the  Bureau  of  Economic  Analysis  updated  definitions 
 for  CEAs.  The  total  number  of  CEAs  decreased  from  348  to  344.  Non-  nodal  county  assignment  continued  to  be  based  on  county-  to-  county  commuting  flows  and  locations  of  the  most  widely  read  regional  newspapers.  See 
 Johnson  &  Kort,  supra  note  120,  at  68-  71.  For  purposes  of  this  transaction,  we  did  not  adopt  the  new  CEA  definitions. 
 133  RSAs  are  regions  defined  by  the  Commission  for  the  purpose  of  issuing  spectrum  licenses.  See  Ninth 
 Competition  Report,  19  FCC  Rcd.  at  20632  n.  188.  134 
 See  id.  at  20632    87.  135 
 See  Johnson,  supra  note  132,  at  75  (  The  main  factor  used  in  determining  the  economic  relationships  among  counties  is  commuting  patterns,  so  each  economic  area  includes,  as  far  as  possible,  the  place  of  work  and  the  place 
 of  residence  of  its  labor  force.).  136 
 See  id.  (  Economic  nodes  are  metropolitan  areas  or  similar  areas  that  serve  as  centers  of  economic  activity). 
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 present  would  have  an  incentive  to  provide  relatively  ubiquitous  service.  CMAs,  in  turn,  are  the  areas  in  which  the  Commission  initially  granted  licenses  for  the  Cellular  service.  137  Although  license  partitioning 
 has  altered  this  initial  licensing  structure  in  many  areas,  CMAs  continue  to  serve  as  reasonable  areas  for  determining  the  number  of  competitors  from  which  consumers  may  choose,  because  the  Commissions 
 licensing  programs,  to  a  large  extent,  have  shaped  the  mobile  telephony  services  market  by  defining  the  initial  areas  where  carriers  were  able  to  provide  facilities-  based  service.  As  CEAs  are  derived  from 
 factors  related  to  consumer  demand  for  mobile  telephony  services  and  CMAs  reflect  to  some  extent  the  initial  supply  of  mobile  telephony  services,  we  believe  that  they  are  useful  cross-  checks  on  each  other  and 
 together  help  ensure  that  our  analysis  identified  all  local  areas  that  required  more  detailed  analysis.  In  performing  that  analysis,  we  also  examined  smaller  geographic  areas  in  order  to  understand  any 
 competitive  problems  fully  and  to  design  targeted  remedies,  if  necessary. 
 46.  The  degree  of  concentration  provides  insight  into  the  competitive  effects  that  would  result  from  a  particular  transaction.  Market  concentration  affects  the  likelihood  that  one  firm,  or  a  small  group 
 of  firms,  could  successfully  exercise  market  power.  A  widely  used  and  accepted  measure  of  market  concentration  is  the  HHI.  138  Market  share  data  are  the  beginning,  not  the  end,  of  the  competitive 
 analysis.  139  Such  data  provide  useful  information  as  to  which  markets  need  more  in-  depth,  multidimensional  analysis  of  potential  competitive  harms.  In  order  to  determine  which  areas  required 
 further  examination,  we  calculated  the  HHI  and  the  change  in  HHI  that  would  result  from  this  transaction  for  all  CEAs  and  CMAs.  We  also  examined  the  impact  on  the  concentration  of  spectrum  holdings  in  each 
 market  of  the  proposed  transaction.  As  explained  below,  we  examined  a  market  further  if  the  post-transaction  HHI  would  be  greater  than  2800  and  the  change  in  HHI  would  be  100  or  greater;  or  if  the 
 change  in  HHI  would  be  250  or  greater  regardless  of  the  level  of  the  HHI;  or  if,  post-  transaction,  the  Applicants  would  hold  70  megahertz  or  more  of  spectrum. 
 47.  This  analysis  follows  the  general  structure  of  the  DOJ/  FTC  Merger  Guidelines,  140  but  we  chose  the  concentration  thresholds  based  on  our  observation  and  evaluation  of  the  current  mobile 
 telephony  marketplace.  141  We  chose  initial  thresholds  of  2800  for  the  HHI  and  100  for  the  change  in  HHI  because  a  mobile  telephony  market  that  does  not  exhibit  at  least  this  combined  post-  merger  level  of 
 concentration  will  be  no  more  concentrated  than  at  the  time  of  the  Commissions  last  congressionally  mandated  review,  which  concluded  the  market  was  effectively  competitive.  142  In  addition,  we  judged  that 
 a  market  in  which  the  merger  causes  a  change  of  less  than  100  in  the  HHI  need  not  be  examined  further  because,  even  if  the  post-  transaction  HHI  for  such  a  market  would  be  greater  than  2800,  the  loss  of  a 
 competitor  with  such  a  small  market  share  is  not  likely  to  cause  significant,  merger-  related  anticompetitive  effects. 
 137  See  47  C.  F.  R.    22.909. 
 138  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21564    96,  n.  306. 
 139  See  id.  at  21564    96;  WorldCom-  MCI  Order,  13  FCC  Rcd.  at  18050,  18100-  01    39,  135. 
 140  See  generally  DOJ/  FTC  Merger  Guidelines. 
 141  See  generally  Ninth  Competition  Report,  19  FCC  Rcd.  at  20597. 
 142  See  id.  at  20600    2.  Our  analysis  indicates  that  the  current  average  HHI  in  markets  across  the  country  has 
 increased  to  slightly  over  3100  as  a  result  of  the  Cingular-  AT&  T  Wireless  merger.  Nevertheless,  we  have  maintained  an  HHI  score  of  2800  as  the  trigger  for  the  initial  screen.  A  slightly  more  rigorous  review  is  consistent 
 with  the  analytical  purpose  of  the  initial  screen    to  eliminate  from  review  markets  where  there  is  no  competitive  harm  rather  than  identifying  markets  where  competitive  harm  may  exist. 
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 48.  Our  initial  analysis  based  on  these  thresholds  was  intended  to  eliminate  from  further  review  those  markets  in  which  there  is  clearly  no  competitive  harm  relative  to  todays  generally  competitive 
 marketplace.  To  ensure  that  we  identified  all  markets  where  there  was  the  potential  for  competitive  harm,  we  also  adopted  a  conservative  second  criterion.  If  the  merger  caused  a  change  in  HHI  of  at  least  250  for 
 a  given  market,  regardless  of  the  HHI,  we  examined  that  market  further.  Although  applying  this  criterion  resulted  in  the  review  of  markets  in  which  the  concentration  levels  are  below  that  of  the  average  market 
 today,  we  chose  to  apply  this  criterion  to  be  confident  that  we  fully  evaluated  any  market  in  which  the  merger  may  adversely  affect  competition. 
 49.  Finally,  because  spectrum  is  a  necessary  resource  for  wireless  carriers  to  compete  effectively,  we  also  analyzed  those  markets  in  which  the  Applicants  would  have  70  megahertz  or  more  in 
 at  least  part  of  the  market  post-  transaction.  70  megahertz  represents  a  little  more  than  one-  third  of  the  total  bandwidth  available  for  mobile  telephony  today,  leaving  approximately  130  megahertz  of  capacity 
 available  for  a  competitive  response  by  other  carriers  in  a  local  market.  Our  market  by  market  analysis  in  this  proceeding,  as  well  as  evidence  from  mobile  telephony  markets  across  the  country,  indicates  that  130 
 megahertz  of  capacity  is  sufficient  to  support  at  least  three  viable  competitors.  143  Nevertheless,  consistent  with  the  conservative  approach  embodied  in  our  analysis,  we  subjected  to  further  review  any  market  in 
 which  one  entity  controls  70  megahertz  or  more  of  the  available  spectrum  to  further  review. 
 50.  Application  of  the  initial  HHI  threshold  described  above  to  data  aggregated  by  CEA  identified  only  11  CEAs  (out  of  the  total  of  348)  for  further,  case-  by-  case  analysis.  144  In  addition, 
 application  of  the  same  HHI  threshold  to  data  aggregated  by  CMA  identified  only  19  CMAs  (out  of  the  total  of  734)  for  closer  analysis.  145  We  also  note  that  the  combined  entity  would  hold  70  megahertz  or 
 more  in  three  of  these  CEAs  and  CMAs.  146  For  the  11  CEAs  identified  by  the  initial  HHI  threshold,  the  average  post-  transaction  HHI  is  5,719.  The  minimum  value  is  1,932  and  the  maximum  value  is  9,719. 
 The  average  increase  in  HHI  is  1,328,  ranging  from  a  minimum  increase  of  2  to  a  maximum  of  4,791.  147  For  the  19  CMAs  identified  by  the  initial  HHI  threshold,  the  average  post-  transaction  HHI  is  7,798.  The 
 minimum  value  is  3,144  and  the  maximum  value  is  10,000.  The  average  increase  in  HHI  is  2,435,  ranging  from  a  minimum  change  of  405  to  a  maximum  of  4,852.  By  comparing  these  results  and 
 analyzing  each  of  the  markets  identified  above,  we  ensured  that  we  did  not  overlook  any  local  area  that  required  a  closer  case-  by-  case  analysis.  Although  the  structure  148  of  some  markets  not  identified  for 
 additional  analysis  will  change  as  a  result  of  the  transaction,  the  fact  that  they  were  not  identified  indicated  either  that  the  market  will  be  no  more  concentrated  than  the  average  market  today,  or  that  the 
 structural  change  as  a  result  of  the  merger  is  negligible,  or  both.  Therefore,  we  find  that  these  structural  changes  will  not  alter  carrier  conduct  in  such  a  way  as  to  impair  competition  and  hence  market 
 performance. 
 143  With  130  megahertz  of  spectrum  capacity  available  to  other  carriers,  there  could  for  instance  be  as  many  as 
 four  carriers  with  at  least  30  megahertz  of  spectrum  for  the  provision  of  mobile  telephony  services.  Many  carriers  today  are  competing  successfully  with  even  less  bandwidth. 
 144  These  CEAs  are  listed  in  Appendix  B. 
 145  These  CMAs  are  listed  in  Appendix  B. 
 146  These  CEAs  and  CMAs  are  noted  in  Appendix  B. 
 147  Markets  with  a  change  in  the  HHI  of  less  than  100  were  caught  by  the  screen  when  they  involved  spectrum 
 aggregation  of  70  megahertz  or  more  in  at  least  one  county  within  the  market.  148 
 Structure  is  defined  as  factors  that  determine  the  competitiveness  of  a  market.  These  factors  include  market  concentration  statistics  and  the  level  of  entry  barriers.  See  DENNIS  W.  CARLTON  &  JEFFREY  M.  PERLOFF,  MODERN 
 INDUSTRIAL  ORGANIZATION  247-  51  (3  rd  ed.  1999). 
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 51.  As  noted  above,  this  initial  identification  of  markets  was  only  the  beginning  of  our  competitive  analysis.  The  initial  screen  was  designed  to  ensure  that  we  did  not  exclude  from  further 
 scrutiny  any  geographic  areas  in  which  any  potential  for  anticompetitive  effects  exist.  As  stated  above,  HHI  and  market  share  metrics  provide  useful  information  as  to  which  markets  need  additional 
 multidimensional  analysis;  however,  these  metrics  are  the  beginning  and  not  the  end  of  the  competitive  analysis.  Thus,  we  now  turn  to  an  examination  of  the  other  factors  we  consider  in  our  case-  by-  case 
 analysis  when  evaluating  whether  there  would  be  potential  competitive  harms  in  certain  geographic  markets  if  the  transaction  were  to  be  approved  without  conditions. 
 2.  Horizontal  Issues 
 52.  Because  the  structural  analysis  above  suggests  that  the  acquisition  by  ALLTEL  of  WWC  is  likely  to  have  adverse  effects  on  competition  in  certain  markets,  149  this  section  examines  in  more  detail 
 how  the  transaction  could  affect  competitive  behavior  in  such  markets.  As  the  DOJ/  FTC  Merger  Guidelines  state,  competition  may  be  harmed  either  through  unilateral  actions  by  the  merged  entity  or 
 through  coordinated  interaction  among  firms  competing  in  the  relevant  market.  150 
 53.  Unilateral  effects  occur  when  the  merged  firm  finds  that,  as  a  result  of  the  merger,  it  is  now  profitable  to  alter  its  behavior  in  an  anticompetitive  manner.  151  Examples  of  unilateral  effects  include  the 
 ability  of  the  merged  firm  to  raise  its  price  or  reduce  the  features  it  includes  in  a  given  service  plan  it  supplies.  Coordinated  effects  occur  when  the  remaining  firms  in  the  market,  recognizing  their 
 interdependence,  take  actions  that  are  profitable  for  each  of  them  only  as  a  result  of  the  accommodating  reactions  of  others.  152  Examples  of  coordinated  effects  include  explicit  collusion,  tacit  collusion,  and 
 price  leadership.  Because  coordinated  effects  may  be  more  likely  if  there  are  fewer  firms  in  a  market,  mergers  may  significantly  increase  the  likelihood  of  coordinated  effects  by  reducing  the  number  of  firms 
 in  the  market. 
 a.  Unilateral  Effects 
 54.  ALLTELs  acquisition  of  WWC  would  lead  to  significant  changes  in  the  structure  of  the  local  wireless  markets  identified  above  for  further  analysis,  and  thus  it  is  necessary  to  examine  in  detail 
 the  possibility  that  the  merger  may  lead  to  competitive  harm  through  unilateral  actions  by  the  merged  entity.  153  Unilateral  effects  arise  when  the  merged  firm  finds  it  profitable  to  alter  its  behavior  following 
 the  merger  by  elevating  price  and  suppressing  output.  154  In  the  case  of  mobile  telephony,  this  might  take  the  form  of  delaying  improvements  in  service  quality  or  adversely  adjusting  plan  features  without 
 149  See  discussion  supra  para.  50. 
 150  DOJ/  FTC  Merger  Guidelines    2. 
 151  Id.    2.2. 
 152  Id.    2.1.  See  also  W.  KIP  VISCUSI,  JOHN  M.  VERNON  &  JOSEPH  E.  HARRINGTON,  JR.,  ECONOMICS  OF 
 REGULATION  AND  ANTITRUST  107  (2000);  DOUGLAS  GREER,  INDUSTRIAL  ORGANIZATION  AND  PUBLIC  POLICY  269  (1992). 
 153  See  Cingular-  AT&  T  Wireless,  19  FCC  Rcd.  at  21570    115;  Application  of  EchoStar  Communications 
 Corporation  (A  Nevada  Corporation),  General  Motors  Corporation,  and  Hughes  Electronics  Corporation  (Transferors)  and  EchoStar  Communications  Corporation  (A  Delaware  Corporation)  (Transferee),  CS  Docket  No. 
 01-  348,  Hearing  Designation  Order,  17  FCC  Rcd.  20559,  20620    153  (2002)  (  EchoStar-  DirecTV  HDO);  see  also  DOJ/  FTC  Merger  Guidelines    2. 
 154  DOJ/  FTC  Merger  Guidelines    2.2. 
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 changing  plan  price.  155  Incentives  for  such  unilateral  competitive  actions  vary  with  the  nature  of  competition  in  the  relevant  markets. 
 55.  The  Applicants  claim  that  unilateral  effects  are  unlikely  as  a  result  of  this  transaction.  They  argue  that  actual  competitors  are  not  capacity  constrained  and  would  be  able  to  attract  and  absorb  new 
 customers  if,  post-  transaction,  ALLTEL  were  to  raise  price.  156  Further,  they  argue  that  there  is  a  high  degree  of  substitutability  between  mobile  telephony  providers,  and  that  any  attempt  by  ALLTEL  to  raise 
 price  or  suppress  output  would  result  in  customers  switching  to  a  new  provider.  157  Therefore,  any  such  price  increase  would  be  transitory  if  it  even  occurred  in  the  first  place.  158 
 56.  Also,  the  Applicants  argue  that  potential  competitors  have  the  ability  and  incentive  to  enter  the  market  if,  post-  transaction,  ALLTEL  were  to  raise  prices,  and  that  other  sources  of  mobile  telephony 
 services  also  would  provide  competitive  pressures.  159  The  Applicants  argue  that  carriers  in  adjacent  markets  could  offer  service  by  entering  into  roaming  agreements  if  ALLTEL  were  to  raise  prices.  160  They 
 claim  that  there  are  relatively  low  barriers  to  entry  by  either  facilities-  based  carriers  or  roaming  agreements,  especially  by  licensed  carriers  and  carriers  operating  in  adjacent  areas.  161  ALLTEL  estimates 
 that  a  licensed  carrier  could  provide  significant  facilities-  based  competition  within  seven  months,  assuming  that  zoning  restrictions  are  minimal.  162  The  Applicants  discuss  Viaero  Wirelesss  entry  into 
 Nebraska  as  an  example  of  low  barriers  to  entry  and  the  disciplining  force  of  potential  competition.  163 
 57.  Lamar  challenges  the  Applicants  representation,  arguing  that  this  transaction  would  result  in  a  lack  of  competition  and  this  would  be  harmful  to  consumers.  In  particular,  Lamar  argues  that  the 
 areas  where  ALLTEL  and  WWC  licenses  overlap  would  result  in  a  loss  of  a  competitor  in  a  rural  area,  and  that  the  elimination  of  a  competitor  would  reduce  pricing  pressures  to  the  detriment  of  consumers.  164 
 58.  In  order  to  evaluate  the  likelihood  of  unilateral  effects  as  a  result  of  this  transaction,  we  examine  the  issues  of  product  differentiation  and  substitutability.  Other  market  conditions  conducive  to 
 155  The  term  unilateral  refers  to  the  method  used  by  firms  to  determine  strategy,  not  to  the  fact  that  the  merged 
 entity  would  be  the  only  firm  to  change  its  strategy.  The  term  unilateral  is  used  to  indicate  that  strategies  are  determined  unilaterally  by  each  of  the  firms  in  the  market  and  not  by  explicit  or  tacit  collusion.  Other  firms  in  the 
 market  may  find  it  profitable  to  alter  their  behavior  as  a  result  of  the  merger-  induced  change  in  market  structure  by,  for  example,  repositioning  their  products,  changing  capacity,  or  changing  their  own  prices.  These  reactions  can 
 alter  the  total  effect  on  the  market  and  must  be  taken  into  account  when  evaluating  potential  unilateral  effects.  156 
 Application,  Exhibit  1  at  14;  Declaration  of  Willig  et  al.  at  14    28.  157 
 Application,  Exhibit  1  at  15;  Declaration  of  Willig  et  al.  at  14-  15    28.  158 
 Application,  Exhibit  1  at  15;  Declaration  of  Willig  et  al.  at  14-  15    28.  159 
 Application,  Exhibit  1  at  14-  15;  Declaration  of  Willig  et  al.  at  15,  18    29,  35.  See  also  discussion  supra  para.  37. 
 160  Declaration  of  Willig  et  al.  at  18-  19    36-  37. 
 161  Id.  at  16-  17,  18-  19    33,  36-  37. 
 162  A  licensed  carrier  would  need  30  days  to  plan  its  entry,  150  days  to  implement  its  entry  plan,  and  30  days  to  test 
 its  new  facilities.  See  id.  at  18-  19    37.  163 
 In  2003,  Viaero  Wireless  acquired  Nebraska  Wireless,  and  in  2004  it  built  out  or  converted  over  60  cell  sites  in  portions  of  eight  Nebraska  CMAs.  Further,  Viaero  Wireless  has  indicated  it  will  build  out  to  communities  that 
 express  a  significant  interest.  See  id.  at  19-  20    38-  39.  164 
 Petition  to  Deny  of  Lamar  County  Cellular,  filed  Mar.  9,  2005,  at  8  (  Lamar  Petition). 
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 anticompetitive  unilateral  effects  in  a  differentiated  market  setting  are  a  large  market  share  by  the  merged  firm,  165  and  conditions  such  that  rival  sellers  are  unlikely  to  replace  competition  lost  through  the 
 acquisition  by  repositioning  their  product  offerings.  166  In  some  instances,  rival  sellers  may  be  unable  to  reposition  their  product  offerings  because  they  face  binding  capacity  constraints.  167  In  addition,  the 
 transaction  may  enhance  the  merged  firms  ability  to  rely  on  network  effects  to  retain  subscribers  despite  increasing  prices  or  decreasing  plan  features.  168  Therefore  we  also  examine  the  competitive 
 strength  of  rival  carriers  and  rivals  ability  to  respond  to  potential  anticompetitive  unilateral  actions  on  the  part  of  the  merged  entity,  spectrum  availability,  network  effects,  and  the  effects  of  an  expected  increase  in 
 market  penetration.  While  we  find  that  harm  from  unilateral  action  by  a  combined  ALLTEL/  WWC  is  unlikely  in  most  local  markets,  there  are  specific  markets  for  which  we  believe  the  acquisition  poses  a 
 significant  threat  to  competition. 
 59.  Product  differentiation.  We  agree  with  the  Applicants  that  the  market  for  mobile  telephony  service  can  be  fairly  characterized  as  differentiated.  Wireless  service  carriers  do  not  offer  a  completely 
 homogeneous  service.  Rather,  carriers  compete  vigorously  on  the  basis  not  only  of  price  but  also  on  numerous  non-  price  features,  such  as  service  quality,  thoroughness  of  geographic  coverage,  and  plan 
 features.  169  While  carriers  can  change  some  of  these  attributes  relatively  quickly,  other  attributes  such  as  quality  and  coverage  require  investments  in  spectrum  and  infrastructure  and  are  not  easily  modified. 
 Further,  product  differentiation  in  this  market  may  be  characterized  by  ongoing  dynamic  rivalry,  with  firms  competing  based  upon  research  and  development,  and  by  means  of  investment  in  new  infrastructure 
 and  services. 
 60.  Substitutability.  In  a  market  characterized  by  product  differentiation,  a  merger  may  lead  to  particularly  strong  increases  in  the  merged  firms  ability  to  affect  market  performance  unilaterally  when 
 the  merging  firms  products  were  relatively  close  substitutes  for  one  another.  We  have  previously  found  that  there  is  a  high  degree  of  substitution  between  the  nationwide  carriers.  170  In  analyzing  this  transaction 
 for  unilateral  effects,  however,  the  question  before  us  is  the  substitutability  between  ALLTEL  and  WWC.  Accordingly,  if  a  significant  number  of  customers  view  the  services  offered  by  ALLTEL  and  WWC  as 
 close  substitutes,  the  merger  of  the  two  firms  can  remove  a  strong  constraint  on  ALLTELs  ability  to  raise 
 165  DOJ/  FTC  Merger  Guidelines    2.211. 
 166  Id.    2.212. 
 167  In  this  sector,  for  example,  spectrum  suitable  for  use  in  mobile  telephony  is  an  input  of  finite  supply.  It  is 
 possible  that  rivals  to  the  merged  entity  may  be  unable  to  add  subscribers  so  as  to  function  as  a  competitive  check  if  there  is  an  insufficient  amount  of  spectrum  available  to  them.  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at 
 21570    118;  DOJ/  FTC  Merger  Guidelines    2.22.  168 
 Certain  services  become  more  attractive  to  customers  as  more  customers  use  them,  a  phenomenon  known  as  a  network  effect.  Network  effects  tend  to  be  strongest  in  businesses  whose  main  output  or  product  is  access  to 
 other  persons,  as  is  the  case  with  telephone  service.  169 
 Quality  includes  the  probability  of  blocked  and  dropped  calls,  and  the  quality  of  the  connection.  Also,  customer  support  is  a  separate  but  important  dimension  of  quality  differentiation,  and  surveys  indicate  that  customers  consider 
 this  factor  when  they  switch  carriers.  Coverage  includes  where  the  service  is  available  either  on  the  carriers  own  network  or  on  the  network  of  one  of  its  roaming  partners.  Plan  features  include  various  dimensions  of  subscriber 
 usage.  Usage  means  minutes  of  voice  connection  defined  by  the  time  at  which  a  call  is  placed,  the  location  from  which  it  is  placed,  and  the  destination  to  which  it  is  directed.  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at 
 21572-  73    123-  126.  170 
 See  id.  at  21574    132. 
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 prices  for  its  pre-  transaction  customers,  for  WWCs  former  customers,  or  for  both.  171  Alternatively,  if  most  customers  consider  WWC  and  ALLTEL  to  be  more  distant  substitutes  for  one  another  when 
 evaluating  the  differentiated  choices  available,  or  if  there  are  multiple  choices  available  to  customers  that  they  view  as  similarly  close  substitutes  for  one  another,  then  anticompetitive  unilateral  effects  may  be  less 
 likely  to  occur  or  may  be  less  significant. 
 61.  The  record  contains  neither  empirical  studies  nor  other  information  that  resolve  conclusively  the  question  of  the  closeness  of  substitution  of  the  services  of  ALLTEL  and  WWC  relative  to  other 
 mobile  telephony  operators.  While  both  ALLTEL  and  WWC  are  regional  carriers  that  offer  facilities-based  mobile  voice  and  data  services  with  local/  regional  and  nationwide  coverage,  172  these  two  carriers 
 are  differentiated  in  terms  of  prices,  plans,  and  services  offered.  173  Although  there  is  product  differentiation  between  ALLTEL  and  WWC,  in  certain  markets  consumers  may  consider  these  two  firms 
 to  be  close  substitutes  relative  to  other  facilities-  based  carriers  serving  the  market. 
 62.  We  also  have  analyzed  data  on  wireless  LNP  174  to  gauge  how  consumers  view  the  substitutability  of  ALLTEL  and  WWC.  We  analyzed  data  on  porting  from  January  2004  through 
 December  2004.  175  This  information  includes  each  instance  of  a  customer  porting  a  phone  number  from  one  mobile  carrier  to  another,  and  indicates  both  the  origin  and  destination  carrier.  Thus,  we  can 
 determine  the  aggregate  customer  flows  between  ALLTEL  and  WWC  for  the  markets  identified  by  our  initial  screen.  In  our  analysis  of  this  LNP  data,  we  have  focused  our  review  on  the  11  CEAs  and  19 
 CMAs  identified  by  the  initial  screen.  Since  these  particular  markets  constitute  the  majority  of  markets  in  which  both  ALLTEL  and  WWC  provide  facilities-  based  mobile  telephony  service,  and  are  the  markets 
 171  That  is,  ALLTELs  presence  in  a  market  may  have  been  a  constraint  on  WWCs  prices,  and  WWCs  presence  in 
 a  market  may  have  been  a  constraint  on  ALLTELs  prices.  It  is  not  necessary  for  the  products  to  be  the  next  best  substitutes  for  there  to  be  competitive  harm  arising  from  unilateral  effects,  although  it  makes  the  harm  more  likely. 
 See  Gregory  Werden,  Demand  Elasticities  in  Antitrust  Analysis,  66  ANTITRUST  L.  J.  408  (1998).  172 
 See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20613-  14    36;  ALLTEL  10-  K  at  5-  6;  ALLTEL  Wireless  Plans,  Compare  Plans,  at  http://  www.  alltel.  com/  personal/  wireless/  plans/  compare.  html  (last  visited  May  26,  2005);  WWC 
 10-  K  at  7.  173 
 For  example,  comparing  national  $40-  per-  month  plans  for  Lincoln,  Nebraska  yields  several  differences.  First,  ALLTELs  National  Freedom  plan  is  priced  at  $39.99  per  month,  and  includes  450  anytime  minutes,  1000  night 
 and  weekend  minutes,  and  1000  mobile-  to-  mobile  minutes.  WWC  offers  a  $35  and  a  $45  per  month  national  plan.  The  $45  plan  includes  450  anytime  minutes,  and  unlimited  night  and  weekend  and  mobile-  to-  mobile  minutes. 
 ALLTEL,  Wireless  Plans,  National  Freedom,  at  http://  www.  alltel.  com/  personal/  wireless/  plans/  national_  freedom.  html  (last  visited  May  26,  2005);  Cellular  One,  Plans  and  Coverage,  at  http:  www.  cellularonewest.  com/ 
 rateplans.  asp?  national  (last  visited  May  31,  2005).  Next,  there  are  differences  in  the  regional  plans  as  well.  ALLTEL  offers  a  regional  plan  priced  at  $39.99  per  month,  which  includes  700  anytime  minutes,  1000  night  and 
 weekend  minutes,  and  1000  mobile-  to-  mobile  minutes.  WWC  offers  a  $44.99  per  month  regional  plan.  The  $44.99  plan  includes  1000  anytime  minutes,  and  unlimited  night  and  weekend  and  mobile-  to-  mobile  minutes.  ALLTEL 
 Wireless  Plans,  Greater  Freedom,  at  http://  www.  alltel.  com/  personal/  wireless/  plans/  greater_  freedom.  html  (last  visited  May  31,  2005);  Cellular  One  Plans  and  Coverage,  at  http:  www.  cellularonewest.  com/  rateplans.  asp?  regional 
 (last  visited  May  31,  2005).  Further,  ALLTEL  offers  a  push-  to-  talk  feature  called  Touch2Talk,  whereas  WWC  does  not  offer  this  feature. 
 174  This  LNP  data  was  provided  to  the  Commission  by  NeuStar. 
 175  Wireless  LNP  was  required  in  the  100  largest  markets  as  of  November  24,  2003,  and  required  nationwide  on 
 May  24,  2004.  See  47  C.  F.  R.    52.31;  see  also  Telephone  Number  Portability,  CC  Docket  No.  95-  116,  First  Memorandum  Opinion  and  Order  on  Reconsideration,  12  FCC  Rcd  7236,  7314  (1997);  Verizon  Wireless  Petition 
 for  Partial  Forbearance  from  the  Commercial  Mobile  Radio  Services  Number  Portability  Obligation,  WT  Docket  No.  01-  184  and  CC  Docket  No.  95-  116,  Memorandum  Opinion  and  Order,  17  FCC  Rcd.  14972,  14986  (2002). 
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 where  the  likelihood  of  unilateral  effects  occurring  as  a  result  of  this  transaction  is  the  greatest,  we  believe  examining  these  markets  will  provide  the  most  insight  into  issues  relating  to  substitutability. 
 63.  For  the  11  CEAs  that  were  identified  by  the  initial  screen,  [REDACTED].  For  the  19  CMAs  that  were  identified  by  the  initial  screen  [REDACTED].  The  CEA  and  CMA  figures  may  differ,  in  part, 
 because  the  CEAs  encompass  counties  in  which  there  is  no  service  overlap  between  ALLTEL  and  WWC,  and  therefore  consumers  are  unlikely  in  these  parts  of  the  CEA  to  consider  ALLTEL  and  WWC  as  close 
 substitutes. 
 64.  For  several  reasons,  we  conclude  that  this  porting  information  is  not  a  reliable  indicator  of  the  degree  of  substitutability  between  ALLTELs  and  WWCs  product  offerings.  While  a  good  measure 
 of  substitutability  should  capture  the  degree  to  which  demand  for  one  carriers  products  is  affected  by  a  change  in  the  price  of  the  other  carriers  products,  these  effects  related  to  substitutability  are  likely  to  be 
 confounded  in  the  porting  data  by  the  presence  of  a  number  of  other  factors  and  influences.  First,  consumers  in  different  markets  face  different  switching  options,  and  the  degree  to  which  they  leave  one 
 provider  for  another  depends  on  the  character  and  the  number  of  alternatives  they  have.  Some  consumers  may  not  consider  ALLTEL  and  WWC  as  close  substitutes  but  may  port  from  one  to  the  other  simply 
 because  there  are  a  limited  number  of  carriers  in  the  market.  176  Differences  in  service  contracts  across  providers  also  affect  consumer  decisions  to  switch  providers,  and  these  variations  unrelated  to 
 substitutability  will  be  reflected  in  the  porting  data.  In  addition,  because  the  porting  data  includes  customers  that  switch  providers  for  reasons  unrelated  to  price  changes  and  consumer  satisfaction,  its 
 usefulness  as  an  indicator  of  economic  substitutability  is  limited.  Second,  porting  data  is  an  incomplete  record  of  provider  switching  behavior,  since  it  includes  only  those  customers  that  choose  to  port  their 
 number  to  their  new  provider,  and  customers  which  choose  to  keep  their  numbers  may  differ  in  some  significant  respects  from  customers  that  do  not  port.  Consequently,  we  do  not  use  porting  data  as  a 
 measure  of  substitutability  between  the  offerings  of  ALLTEL  and  WWC. 
 65.  Competitive  responses  by  rivals.  In  evaluating  this  transaction,  we  examine  whether  competitive  responses  by  rivals  to  the  merged  entity    such  as  through  repositioning  by  existing  licensees 
 or  entry  by  a  new  licensee    would  sufficiently  counter  the  merged  entitys  exercise  of  market  power.  Should  a  merged  entity  attempt  to  raise  prices  or  engage  in  other  exercise  of  market  power,  other  firms 
 may  have  the  incentive  or  ability  to  reposition  their  offerings.  In  particular,  where  a  firm  is  already  present  in  a  market,  has  comparable  service  coverage,  and  has  excess  capacity  relative  to  its  current 
 subscriber  base,  it  should  be  able  to  adjust  rates,  plan  features,  handsets,  advertising,  etc.,  in  the  short  run.  Of  course,  there  are  limits  to  repositioning.  Firms  may  not  be  able  to  add  quickly  to  their  operating 
 footprints,  purchase  additional  spectrum  if  needed,  secure  tower  siting  permits,  improve  overall  quality,  or  deploy  a  new  technology.  Whether  addition  of  cell  sites  would  always  be  possible  even  in  this  time 
 frame,  and  whether  it  would  always  be  profitable,  is  unclear.  At  a  minimum,  however,  even  if  a  firm  is  present  in  a  market  and  has  comparable  service  area  coverage,  the  possibility  of  competitive  response  is 
 an  important  factor. 
 66.  We  find  that,  in  several  of  the  markets  identified  by  our  initial  screen,  there  are  few  carriers  in  a  particular  market  that  are  likely  to  be  viewed  as  adequate  substitutes  to  the  merging  parties  in  the 
 short  run.  Although  there  are  rival  carriers  that  have  at  least  some  coverage  in  a  market,  the  population  and  land  area  that  their  networks  cover  are  significantly  less  then  either  ALLTELs  or  WWCs 
 networks.  177  A  carrier  with  only  partial  service  coverage  in  a  geographic  market  may  not  be  perceived  as  a  close  substitute  for  a  carrier  with  ubiquitous  local  coverage.  For  the  reasons  outlined  above,  it  is  not 
 176  See  Appendix  C.  [REDACTED]. 
 177  See  Appendix  C  (discussing  the  competitive  analysis  for  each  market  identified  by  the  initial  screen). 
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 clear  how  quickly  carriers  can  move  from  partial  to  complete  geographic  coverage  in  a  given  market.  Therefore,  we  find  it  unlikely  that  rival  carriers  in  those  markets  would  be  able  to  reposition  themselves 
 sufficiently  to  be  a  disciplining  force  if  the  merged  entity  attempts  to  exercise  market  power. 
 67.  Another  potential  competitive  response  to  the  merged  firm  exercising  market  power  is  entry  by  a  licensee.  However,  in  order  to  mitigate  any  anticompetitive  effects,  entry  needs  to  occur  in  a  timely 
 and  sufficient  manner.  178  The  Applicants  claim  that  entry  barriers  are  relatively  low  especially  for  licensees,  179  and  therefore  entry  would  occur  in  a  timely  and  sufficient  manner.  Generally,  however,  we 
 do  not  find  that  barriers  to  entry  are  low  in  the  mobile  telephony  services  market.  180 
 68.  Barriers  to  entry  in  the  mobile  telephony  services  market  may  include  the  existence  of  first-mover  advantages  and  large  upfront  costs,  as  well  as  difficulties  in  obtaining  access  to  spectrum.  181 
 Therefore,  even  if  a  firm  holds  a  license  in  a  given  market  area,  there  are  three  other  types  of  entry  barriers  that  a  firm  may  face  when  entering  a  new  market  area.  182  The  firm  must  make  significant 
 advertising  expenditures  that,  unlike  tangible  assets  such  as  spectrum  and  network  facilities,  are  irrecoverable  or  sunk.  Incumbents  in  the  market  will  have  already  incurred  this  sunk  cost  whereas  the 
 entrant  has  not,  so  the  entrant  has  a  higher  incremental  cost  and  incremental  risk  to  entry.  In  addition,  the  mobile  telephony  services  market  may  be  characterized  by  extensive  economies  of  scale,  which  implies  a 
 large  minimum  efficient  scale  183  relative  to  the  market.  In  this  situation,  the  entrant  may  depress  price  by  entering  at  minimum  efficient  scale  or  may  need  to  produce  at  less  than  minimum  cost.  Therefore,  in 
 either  scenario,  expected  profitability  is  lower  and  entry  is  deterred.  Finally,  a  further  type  of  entry  barrier  is  the  need  for  firms  to  obtain  sufficient  financing  to  enter  a  market.  An  entrant  needs  an  absolute 
 capital  requirement  in  order  to  enter  at  a  minimum  efficient  scale,  and  if  a  firm  is  unable  to  obtain  this  level  of  financing,  then  entry  will  be  deterred. 
 69.  The  Applicants  also  argue  that  entry  can  occur  within  seven  months  with  minimal  zoning  requirements.  The  Applicants  then  divide  this  entry  process  into  three  categories:  entry  planning, 
 network  implementation,  and  testing  of  facilities.  184  We  believe  that  the  Applicants  have  underestimated  the  time  necessary  for  a  licensee  to  enter  a  market,  and  establish  a  competitive  presence  sufficient  to 
 mitigate  any  anticompetitive  behavior  by  the  merged  firm.  Initially,  both  the  entry  planning  and  network  implementation  phases  may  take  significantly  longer  than  the  estimate  provided  by  the  Applicants.  185 
 Further,  the  Applicants  do  not  take  into  account  the  time  to  establish  or  enhance  customer  service  and  to  market  the  service  in  the  new  area.  186  Finally,  their  analysis  does  not  provide  an  estimate  of  the  time 
 178  DOJ/  FTC  Merger  Guidelines    3. 
 179  Declaration  of  Willig  et  al.  at  18-  19    37. 
 180  See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20645    106. 
 181  See  Spectrum  Aggregation  R&  O,  16  FCC  Rcd.  at  22688-  91,    39-  43. 
 182  See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20644-  45    103-  105. 
 183  The  minimum  efficient  scale  is  measured  by  the  quotient  of  the  average  plant  size  among  the  largest  plants 
 accounting  for  50  percent  of  output  and  total  industry  sales.  See  Willaim  S.  Comanor  &  Thomas  A.  Wilson,  Advertising,  Market  Structure  and  Performance,  49  REV.  OF  ECON.  AND  STATISTICS  425  (Nov.  1967). 
 184  See  Declaration  of  Willig  et  al.  at  18-  19    37. 
 185  Entry  planning  may  require  the  carrier  to  establish  financing  as  well  as  select  a  vendor  and  procure  the  necessary 
 hardware.  Network  implementation  requires  decisions  on  backhauling,  switching,  and  non-  zoning  issues  related  to  cell  site  location. 
 186  Marketing  and  customer  service  may  include  advertising,  customer  support  and  billing,  and  establishing  sales 
 points  of  presence  within  the  market. 
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 needed  for  the  entrant  to  gain  sufficient  share,  or  any  information  on  whether,  and  to  what  extent,  a  new  entrants  marketing  strategy  may  mitigate  the  merged  firms  exercise  of  market  power. 
 70.  The  Applicants  discuss  Viaero  Wirelesss  entry  into  Nebraska  as  an  example  of  low  entry  barriers  and  rapid  deployment  of  service.  In  2004,  Viaero  established  over  60  cell  sites  in  Nebraska  by 
 building  new  sites  or  converting  Nebraska  Wirelesss  cell  sites.  Although  the  Applicants  acknowledge  that  cell  site  conversion  is  easier  then  building  new  sites,  this  expansion  was  very  rapid.  187  We  do  not 
 find  this  example  persuasive  that  sufficient  entry  can  occur  in  the  timeframe  proposed  by  the  Applicants.  Of  the  60  cell  sites  that  Viaero  established,  it  is  not  clear  how  many  were  new  sites  and  not  the  conversion 
 of  existing  sites.  Further,  there  was  no  evidence  in  the  record  about  how  any  of  the  new  cell  sites  expanded  Viaeros  coverage  in  terms  of  either  population  or  land  area,  beyond  its  acquisition  of  Nebraska 
 Wireless,  or  if  consumers  view  Viaero  as  a  close  substitute  to  either  ALLTEL  or  WWC. 
 71.  The  Applicants  also  argue  that  Viaeros  business  model  would  constrain  the  merged  entity.  188  In  order  to  constrain  the  merged  entity  from  exercising  market  power,  a  carriers  entry  would 
 need  to  be  sufficient.  According  to  the  Applicants,  Viaero  has  expanded  to  four  towns  in  southwest  Nebraska,  and  will  expand  into  additional  communities  that  reach  a  certain  threshold  of  interest.  189 
 However,  there  is  no  evidence  in  the  record  that  supports  the  conclusion  that  Viaero  has  implemented  this  business  plan  farther  then  the  four  communities  in  southwest  Nebraska,  or  that  it  will  be  able  to  expand  its 
 service  area  in  a  timely  and  sufficient  manner  to  mitigate  any  anticompetitive  concerns. 
 72.  Therefore,  in  considering  whether  new  facilities-  based  entry  may  counter  the  merged  entitys  attempts  to  exercise  market  power,  we  analyze  on  a  case-  by-  case  basis  whether  the  entry  of 
 potential  competitors  is  likely  in  a  timely  and  sufficient  manner.  Finally,  we  do  not  consider  entry  via  roaming  agreements  to  mitigate  anticompetitive  effects  as  a  result  of  this  transaction.  There  is  no 
 evidence  in  the  record  that  indicates  that  non-  facilities-  based  service  enabled  through  roaming  agreements  is  cost  effective.  Also,  as  discussed  in  Part  IV.  A.  3,  we  find  that  market  participants  for  purposes  of  this 
 transaction  are  limited  to  facilities-  based  providers  using  Cellular,  PCS,  and  SMR  licenses,  although  we  recognize  that  in  some  instances  other  providers  may  provide  additional  constraints  against 
 anticompetitive  behavior. 
 73.  Spectrum  and  advanced  wireless  services.  As  a  result  of  this  transaction,  the  current  spectrum  holdings  of  ALLTEL  and  WWC  would  be  combined,  resulting  in  aggregation  by  one  entity  of 
 as  much  as  70  megahertz  of  applicable  spectrum  in  certain  local  markets.  190  Although  we  no  longer  have  a  per  se  limit  on  the  amount  of  spectrum  suitable  for  mobile  telephony  that  an  entity  may  hold  in  any  one 
 market,  we  are  mindful  of  the  unique  role  of  spectrum  as  a  critical  input  in  the  market  for  wireless  services  and  have  carefully  analyzed  the  potential  impact  of  this  merger  on  that  input.  The  mobile 
 telephony  services  sector  is  characterized  by  ongoing  growth  as  well  as  technological  change.  191  In 
 187  See  Declaration  of  Willig  et  al.  at  10    19. 
 188  Id. 
 189  This  threshold  of  interest  is  200  signatures.  See  Viaero,  Well  Build  a  Tower,  at  http://  www.  viaero.  com/ 
 BuildATower/  Index.  cfm  (visited  May  17,  2005);  see  also  Chadron  Record,  Cell  Phone  Company  Seeks  Local  Customers,  at  http://  www.  southernblackhillsweeklygroup.  com/  articles/  2005/  03/  17/  chadron/  brief/  news72.  txt 
 (visited  May  17,  2005)  (stating  that  the  target  hadnt  been  reached).  190 
 Post-  transaction,  ALLTEL  will  hold  70  megahertz  of  spectrum  in  CMA334  Arkansas  11-  Hempstead  (Clay,  Columbia,  Hempstead,  and  Lafayette  counties),  CMA431  Kansas  4-  Marshall  (Geary,  Pottawatomie,  and  Riley 
 counties),  and  CMA658  Texas  7-  Fannin  (Cass  and  Red  River  counties).  See  Application  at  Exhibit  2.  191 
 See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20667-  73    173-  186  (growth),  20648-  55    124-  142  (technological  change). 
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 particular,  next  generation  technologies  are  being  gradually  rolled  out  by  a  number  of  carriers.  Nonetheless,  we  believe  it  is  speculative  to  predict  either  future  spectrum  requirements  or  when  a  carrier 
 will  need  access  to  additional  spectrum.  The  evidence  we  do  have,  however,  suggests  that  firms  generally  have  access  to  the  spectrum  they  need  to  offer  next-  generation  services  now,  as  seen  by  rollout  of  such 
 services  by  a  number  of  carriers,  including  ALLTEL.  192 
 74.  This  merger  does  not  take  spectrum  away  from  any  competing  carriers.  Therefore,  the  spectrum-  related  harm,  if  any,  would  be  that  the  merger  could  result  in  ALLTEL  holding  a  large  enough 
 share  of  the  available  spectrum  such  that  other  carriers  may  be  constrained  in  the  deployment  of  next-generation  services.  We  believe,  however,  that  carriers  3-  G  related  needs  for  additional  spectrum 
 generally  will  align  with  the  arrival  of  suitable  spectrum  in  future  auctions,  including  those  for  AWS,  and  in  the  upper  and  lower  700  MHz  bands.  193  We  also  note  that  the  Commission  has  a  significant  role  in 
 assuring  to  access  to  spectrum,  within  a  suitable  timeframe,  through  auctions  of  licenses  and  clearing  in  these  bands. 
 75.  Network  effects.  One  of  the  most  obvious  consequences  of  this  merger  would  be  to  increase  the  size  of  the  merged  entity  in  terms  of  subscribers  on  its  network,  as  well  as  to  increase  its  geographic 
 coverage  and  ability  to  provide  improved  service  quality  and  product  features.  Because  of  the  nature  of  telecommunications  and  the  magnitude  of  this  increase  in  the  merged  entitys  size,  we  consider  the 
 potential  network  effects  of  this  merger. 
 76.  Network  effects  arise  when  the  value  of  a  product  increases  with  the  number  of  consumers  who  purchase  it.  For  this  transaction,  network  effects  can  arise  as  a  result  of  incentives  the  merged  entity 
 would  offer  to  its  own  subscribers    for  example,  a  discount  or  the  functional  equivalent  when  calling  other  ALLTEL  subscribers  (unlimited  in-  network  calling),  or  by  limiting  certain  desirable  network 
 features  to  calls  that  remain  within  its  network.  194  These  carrier-  specific  network  effects  can,  potentially,  result  in  both  consumer  benefits  and  an  increased  risk  of  competitive  harms.  On  the  one  hand,  discounted 
 intra-  carrier  calling  offers  real  value  to  consumers.  On  the  other  hand,  this  feature  and  other  incentives 
 192  In  March  2005,  ALLTEL  launched  its  EV-  DO  network  in  three  markets  where  it  holds  25  megahertz    Akron 
 and  Cleveland  Ohio,  and  Tampa,  Florida.  However,  ALLTELs  launch  is  for  high-  speed  laptop  connection  only.  For  spectrum  holdings,  see  the  Commissions  ULS  database;  and  for  EV-  DO  launch  information,  see  Sascha  Segan, 
 ALLTEL  Launches  EV-  DO,  PC  MAGAZINE,  March  2005,  at  http://  www.  findarticles.  com/  articles/  mi_  zdpcm/  is_  200503/  ai_  n13476832/  print  (lasted  visited  5/  27/  05).  Also,  Verizon  Wireless  has  launched  EV-  DO  service  in 
 several  markets  where  it  holds  30  meghertz  of  bandwidth  (i.  e.,  Austin,  Dallas,  and  Fort  Worth  Texas;  Milwaukee  and  Racine,  Wisconsin;  and  Miami,  Orlando,  Tampa,  and  West  Palm  Beach,  Florida)  and  in  several  other  locations 
 where  it  has  begun  to  offer  EV-  DO,  it  is  doing  so  with  35  megahertz  of  spectrum.  For  spectrum  holdings,  see  the  Commissions  ULS  database;  and  for  EV-  DO  launch  information,  see  Verizon  Wireless  Expands  Broadband 
 Access  3G  Network  to  Cover  14  Markets  From  Coast  to  Coast,  at  http://  news.  vzw.  com/  news/  2004/  09/  pr2004-  09-  22c.  html  (lasted  visited  5/  27/  05).  Similarly,  Dobson  has  announced  launch  of  EDGE  service  throughout  its  16-  state 
 territory,  where  it  holds  no  more  than  30  megahertz  of  bandwidth  in  over  90  percent  of  the  applicable  counties.  For  spectrum  holdings,  see  the  Commissions  ULS  database;  and  for  EDGE  launch  information,  see  Dobson  launches 
 EDGE  services  in  16-  state  service  area,  RCR  WIRELESS  NEWS,  October  18,  2004,  at  22.  193 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21577    140.  194 
 For  example,  telephone  service  to  an  individual  subscriber  becomes  more  valuable  to  that  subscriber  as  the  number  of  other  people  he  or  she  can  reach  using  the  telephone  increases.  Since  wireless  carriers  permit  physical 
 interconnection  among  their  individually-  owned  networks,  wireless  subscribers  may  complete  a  call  to  subscribers  on  all  other  carriers  networks.  Therefore,  this  merger  does  not  have  the  potential  to  disadvantage  any  other 
 carriers  subscribers  with  regard  to  access  to  the  communications  network.  Nor  does  this  merger  raise  the  typical  network  effects  possibility  that  the  large  network  will  attract  customers  away  from  smaller  networks  and  drive  out 
 the  smaller  networks. 
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 could  potentially  alter  an  ALLTEL  subscribers  calculation  when  deciding  whether  to  stay  with  ALLTEL  or  switch  to  a  different  carrier,  and  therefore  could  potentially  reduce  the  ability  of  other  carriers  to  act  as 
 disciplinary  forces  with  regard  to  ALLTEL. 
 77.  Although  there  is  evidence  in  the  record  that  ALLTEL  (like  other  carriers)  is  attempting  to  market  to  increase  network  effects,  we  do  not  have  evidence  yet  that  these  effects  are  a  major  influence  in 
 consumer  mobile  telephony  choices,  or  that  either  the  benefits  or  the  harms  from  these  effects  are  particularly  strong  at  this  point.  On  balance,  we  find  that  because  all  mobile  networks  interconnect  to 
 each  other    and  of  course  to  the  wireline  network  as  well    it  appears  unlikely  that  a  mobile  network  with  more  subscribers  would  be  more  attractive  to  additional  customers  simply  because  of  its  size. 
 Network  effects,  therefore,  do  not  weigh  heavily  in  our  analysis  of  the  unilateral  effects  of  the  merger.  195 
 78.  Penetration.  Another  factor  we  consider  in  determining  the  consequences  of  a  unilateral  attempt  to  exercise  market  power  is  penetration  rate,  both  the  current  rate  in  a  local  market  as  well  as  the 
 potential  for  growth  in  the  market  penetration.  First,  we  believe  that  carriers  are  currently  planning  for  and  investing  in  anticipation  of  significant  growth.  This  gives  added  confidence  that  existing  operators 
 would  have  the  capacity  to  attract  customers  and  increase  output  should  the  merged  entity  attempt  to  exercise  market  power.  Second,  were  the  merged  firm  to  raise  prices  or  adversely  modify  plan  features,  it 
 would  stand  to  lose  not  only  some  percentage  of  existing  customers,  but  also  new  customers  in  significant  numbers.  And,  third,  since  potential  new  customers,  by  definition,  are  not  tied  by  contract  to  an  existing 
 firm,  they  are  able  immediately  to  avoid  less  attractive  offerings  of  the  merged  firm  and  sign  up  with  another  operator.  In  local  markets  where  mobile  telephony  penetration  is  lower  than  the  U.  S.  average, 
 these  effects  should  be  particularly  strong.  In  addition,  relatively  under-  penetrated  markets  may  be  the  most  attractive  markets  for  new  entrants,  all  other  factors  being  equal.  Entry  will  be  particularly  likely  for 
 these  markets  where  spectrum  is  available  on  the  secondary  market. 
 79.  The  Applicants  also  argue  that,  since  ALLTEL  currently  does  not  attempt  to  exercise  market  power,  future  unilateral  attempts  to  exercise  market  power  are  unlikely.  The  Applicants  claim  that 
 nationwide  carriers  are  present  in  each  of  the  overlap  markets  and  provide  competitive  pressure  through  advertising  and  Internet  sites.  196  Even  in  markets  where  ALLTEL  does  not  compete  directly  with  a 
 national  carrier,  ALLTEL  has  introduced  new  products  and  services  that  the  national  carriers  offer  in  other  markets.  These  include  family  plans,  free  long  distance,  and  in-  network  calling.  197  Also  according 
 to  ALLTEL,  if  ALLTEL  tried  to  raise  prices  in  a  particular  CMA,  it  would  face  consumer  resistance  because  consumers  are  aware  of  the  prices  and  plans  nationwide  carriers  are  offering  in  other  markets.  198 
 80.  The  Applicants  also  argue  that  ALLTEL  sets  its  price  on  a  nationwide  basis  and  no  single  CMA  or  CEA  dictates  price.  A  nationwide  pricing  strategy  allows  ALLTEL  to:  (1)  use  common 
 platforms  and  information  for  all  of  its  call  centers;  (2)  more  effectively  train  sales  staff;  (3)  reduce  complications  of  billing  system  administration;  and  (4)  deploy  common  advertising  across  areas.  199 
 Given  these  efficiencies,  individual  rate  plans  for  particular  CMAs  or  CEAs  would  be  difficult  and  costly  to  implement.  200  Since  ALLTEL  prices  on  a  nationwide  basis,  this  indicates  that  the  costs  of  setting 
 195  For  a  discussion  of  the  benefits  to  a  wireless  provider  of  increased  scale  and  scope,  see  infra  Part  IV.  C.  6. 
 196  Application,  Exhibit  1  at  14;  Declaration  of  Willig  et  al.  at  15    30. 
 197  Declaration  of  Willig  et  al.  at  16    31. 
 198  Id.  at  17-  18    34. 
 199  See  id.  at  10,  11    19,  21. 
 200  Id.  at  10-  11    20. 
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 prices  on  a  local  level  are  greater  than  the  benefits  of  such  a  pricing  strategy.  201  If  a  local  pricing  strategy  were  profitable,  then  ALLTEL  would  have  had  an  incentive  to  do  so  in  markets  with  three  or  fewer 
 providers  where  it  offers  service.  202 
 81.  The  Applicants  discuss  other  potential  ways  that  ALLTEL  could  price  discriminate  at  the  local  level  and  refute  these  as  likely  strategies.  First,  ALLTEL  could  price  discriminate  by  offering 
 localized  promotions;  however,  ALLTEL  has  not  done  so  because  the  costs  significantly  outweigh  the  benefits.  203  Second,  ALLTEL  could  charge  different  prices  for  handsets  based  on  local  market 
 conditions.  In  this  context,  ALLTEL  has  offered  a  special  discount  on  selected  handsets  in  five  NFL  team  cities  where  it  is  attempting  to  increase  its  presence  and  name  recognition.  204  Aside  from  these  five 
 cities,  ALLTEL  sets  the  same  handset  prices  across  the  rest  of  its  coverage  area.  205  Third,  ALLTEL  could  also  discriminate  by  limiting  the  local  coverage  area  for  CMAs  or  CEAs  where  there  are  fewer 
 competitors.  The  Applicants  argue  that  the  merger  would  not  affect  the  scope  of  any  individual  CMA  or  CEA  coverage  area  because  it  would  be  costly  to  implement.  206  Fourth,  the  Applicants  also  discuss  the 
 possibility  that,  in  markets  with  fewer  competitors,  service  quality  improvements  are  less  likely  to  be  made.  However,  ALLTEL  claims  to  make  its  decisions  on  cell  site  construction  and  location  based  on  a 
 business  model  that  is  not  directly  dependent  on  the  number  of  competitors  or  the  degree  of  concentration.  207 
 82.  Finally,  the  Applicants  argue  that  ALLTEL  is  unlikely  to  identify  customers  in  more  concentrated  areas  with  enough  accuracy  to  make  differentiated  pricing  profitable.  If  ALLTEL  were  to 
 increase  its  price  by  five  percent  in  an  area  it  considered  less  competitive,  and  some  percentage  of  customers  targeted  for  the  price  increase  were  able  to  obtain  service  from  a  carrier  in  an  adjacent  market 
 or  over  the  internet,  a  percentage  of  these  customers  would  be  inclined  to  switch,  lowering  the  profitability  of  the  price  increase.  208 
 83.  We  acknowledge  that  there  is  evidence  that  ALLTEL  currently  sets  its  price  on  a  nationwide  basis,  and  does  not  offer  many  localized  promotions  for  either  pricing  plans  or  handsets.  However,  the 
 Applicants  do  not  quantify  the  cost  savings  or  customer  gains  from  using  a  nationwide  versus  a  geographically  differentiated  strategy.  Although  a  nationwide  strategy  may  be  cost  effective  at  the 
 present  time,  there  is  no  evidence  in  the  record  that  this  situation  would  be  unchanged  post-  transaction.  We  find  it  reasonable  to  assume  that  if  geographically  differentiated  strategies  became  profitable  in  the 
 future,  ALLTEL  would  implement  these  strategies,  since  this  is  a  strategy  that  has  been  used  regularly  in  the  mobile  telephony  market.  The  Commission  has  previously  found  that  mobile  telephony  providers 
 offer  plan  and  handset  promotions,  different  handsets,  and  varying  service  and  technology  deployment  for 
 201  Id.  at  12    23. 
 202  See  id.  at  16-  17,  18-  19    33,  36-  37. 
 203  Id.  at  12    23. 
 204  The  five  NFL  cities  include  Charlotte,  Cleveland,  New  Orleans,  Phoenix,  and  Tampa  Bay.  Id.  at  12-  13    24. 
 205  Id.  at  12-  13    24. 
 206  Id.  at  13    25,  n.  12. 
 207  Id.  at  13    25,  n.  13. 
 208  Id.  at  20-  21    40-  41. 
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 different  geographic  markets,  and  therefore  that  the  actual  cost  of  mobile  telephony  service  to  the  consumer  is  not  national.  209 
 84.  In  summary,  while  harm  arising  from  unilateral  effects  is  unlikely  in  most  of  the  markets  involved  in  this  transaction,  for  the  reasons  discussed  above  we  find  that  this  transaction  is  likely  to  result 
 in  adverse  unilateral  effects  in  many  of  the  limited  number  of  markets  identified  by  the  initial  screen.  In  these  markets,  where  ALLTEL  and  WWC  service  areas  currently  overlap,  it  appears  that  ALLTEL  and 
 WWC  are  relatively  close  substitutes  for  each  other  in  the  eyes  of  consumers.  In  many  of  these  markets,  other  providers  generally  are  unable  to  match  the  price/  service  options  offered  by  the  applicants.  In 
 addition,  other  licensees  in  these  markets  have  limited  ability  to  reposition  in  response  to  any  attempted  exercise  of  market  power  by  the  merged  firm.  Further,  entry  by  firms  not  currently  providing  service  in 
 these  markets  cannot  be  counted  on  to  prevent  possible  exercise  of  market  power.  And,  forces  pushing  firms  away  from  setting  differing  prices  across  local  markets  cannot  be  counted  on  to  prevent  such 
 differential  pricing  in  the  future.  Therefore,  as  further  described  in  the  market-  by-  market  analysis  in  Part  IV.  B.  4.  b,  below,  and  in  the  Confidential  Appendix,  we  find  a  number  of  markets  in  which  other  providers 
 are  not  present  or  do  not  possess  the  capacity  to  prevent  the  exercise  of  unilateral  market  power. 
 b.  Coordinated  Interaction 
 85.  In  markets  where  only  a  few  firms  account  for  most  of  the  sales  of  a  product,  those  firms  may  be  able  to  exercise  market  power  by  either  explicitly  or  tacitly  coordinating  their  actions.  210 
 Accordingly,  one  way  in  which  a  merger  may  create  or  enhance  market  power  or  facilitate  its  exercise  is  by  making  such  coordinated  interaction  among  firms  more  likely,  more  successful,  or  more  complete.  211 
 Successful  coordination  depends  critically  on  two  key  factors.  212  The  first  is  the  ability  to  reach  terms  that  are  profitable  for  each  of  the  firms  involved,  and  the  second  is  the  ability  to  detect  and  punish 
 deviations  that  would  undermine  the  coordinated  interaction. 
 86.  Significant  increases  in  market  share  and  high  post-  merger  concentration  levels  may  indicate  that  a  merger  could  facilitate  coordinated  interaction  in  some  mobile  telephony  markets  identified  by  the 
 structural  analysis  in  Parts  IV.  A  and  IV.  B.  However,  such  increases  in  concentration  and  high  concentration  levels  in  the  relevant  markets  post-  transaction  do  not  by  themselves  provide  a  sufficient 
 basis  for  determining  that  the  merger  will  facilitate  coordinated  interaction,  for  two  related  reasons.  First,  the  ability  to  reach  and  enforce  terms  of  coordination  may  also  depend  on  many  other  distinctive 
 characteristics  of  individual  markets  apart  from  concentration.  213  A  number  of  market  conditions  may  affect  coordination,  including  the  availability  of  information  about  market  conditions,  the  extent  of  firm 
 and  product  homogeneity,  and  the  presence  of  maverick  carriers.  Second,  although  a  high  concentration  level  is  among  the  factors  that  may  make  coordinated  interaction  easier  and  therefore  more  likely,  there  is 
 no  unique  critical  threshold  of  market  concentration  above  which  the  exercise  of  market  power  through 
 209  See  Ninth  Competition  Report,  19  FCC  Rcd.  at  20644,  20665-  66    113,  169  (pricing  plan  differences),  20644   
 113  (handset  differences),  20618,  20651-  53    49,  130-  135  (technology  and  service  deployment).  210 
 DOJ/  FTC  Merger  Guidelines    0.1.  211 
 The  DOJ/  FTC  Merger  Guidelines  define  coordinated  interaction  as  comprising  actions  by  a  group  of  firms  that  are  profitable  for  each  of  the  firms  involved  only  because  the  other  firms  react  by  accommodating  these  actions 
 rather  than  attempting  to  undercut  them.  Id.    2.1.  212 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21580    151;  DOJ/  FTC  Merger  Guidelines    2.11.  213 
 Barry  C.  Harris  and  David  D.  Smith,  The  Merger  Guidelines  vs.  Economics:  A  Survey  of  Economic  Studies,  at  10-  12,  in  PERSPECTIVES  ON  FUNDAMENTAL  ANTITRUST  THEORY  (A.  B.  A.,  Sec.  of  Antitrust  L.  July  2001). 
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 coordinated  interaction  is  likely.  214  Therefore,  the  Commission  will  also  consider  whether  conditions  in  the  post-  merger  environment  other  than  market  concentration  will  be  conducive  to  reaching  and  enforcing 
 the  terms  of  coordination. 
 87.  The  Applicants  claim  that  this  transaction  would  not  increase  the  likelihood  of  coordinated  interaction  in  the  mobile  telephony  services  market.  They  argue  that  the  transaction  would  not  change  the 
 relevant  markets  enough  to  make  coordination  profitable,  because  (1)  there  are  a  significant  number  of  facilities-  based  competitors  in  each  geographic  market,  and  (2)  the  market  is  characterized  by 
 heterogeneity  in  costs,  elements  of  service,  and  product  offerings.  215  Also,  coordination  between  ALLTEL  and  other  carriers  is  unlikely  due  to  the  lack  of  geographic  price  discrimination  by  ALLTEL.  216 
 The  Applicants  also  argue  that  any  competitor  that  possesses  excess  capacity  could  increase  its  output  if  demand  warranted,  and  therefore  these  competitors  would  have  an  incentive  to  deviate  from  the 
 coordinated  strategy.  217 
 88.  The  Applicants  also  argue  that  the  merger  would  not  create  or  enhance  the  ability  of  carriers  to  detect  or  punish  deviations  from  a  coordinated  strategy.  For  example,  a  competitor  could  cheat  by 
 selling  capacity  to  a  reseller  or  via  a  roaming  agreement,  and  this  deviation  would  be  difficult  to  detect.  218  Also,  demand  in  the  mobile  telephony  services  market  can  be  characterized  as  dynamic  and  uncertain,  and 
 therefore  it  may  be  difficult  to  determine  whether  a  divergence  from  a  coordinated  strategy  is  the  result  of  an  intentional  deviation  from  the  coordinated  outcome  or  from  an  exogenous  shock.  219  Finally,  the 
 Applicants  argue  that  the  market  can  be  characterized  by  significant  product  and  technological  innovations,  and  the  dynamic  and  temporary  nature  of  any  competitive  advantages  realized  from  these 
 innovations  makes  maintaining  a  coordinated  outcome  difficult.  220 
 89.  Transparency  of  information.  Terms  of  coordination  are  often  easier  to  reach,  and  detection  and  punishment  of  deviations  is  often  more  rapid  and  more  effective,  when  key  information  about  specific 
 transactions  or  individual  price  or  output  levels  is  routinely  available  to  rival  firms.  221  There  is  ample  evidence  that  the  carriers  regularly  monitor  their  rivals  pricing  plans,  promotions,  marketing  strategies, 
 and  other  aspects  of  their  rivals  operations,  222  and  further  that  the  carriers  use  this  information  as  a  basis  for  improving  their  own  ability  to  compete  in  attracting  and  retaining  customers,  either  by  matching  the 
 offers  of  rivals  or  by  making  more  aggressive  offers.  223  However,  there  is  nothing  in  the  record  to  indicate  that  the  transaction  would  alter  market  conditions  in  such  a  way  as  to  increase  the  ability  and 
 incentive  of  the  remaining  carriers  to  exploit  transparency  of  pricing  plans  and  other  features  for  the  purpose  of  detecting  and  punishing  deviations. 
 214  Id. 
 215  See  Application,  Exhibit  1  at  16;  Declaration  of  Willig  et  al.  at  23    45. 
 216  Declaration  of  Willig  et  al.  at  22    43. 
 217  Id.  at  23    46. 
 218  Application,  Exhibit  1  at  16. 
 219  Id.  at  16. 
 220  Id.  at  16-  17. 
 221  DOJ/  FTC  Merger  Guidelines    2.11-  2.12. 
 222  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21581-  82    154;  [REDACTED]. 
 223  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21581-  82    154;  [REDACTED]. 
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 90.  Firm  and  product  homogeneity.  A  market  condition  that  may  facilitate  the  ability  to  reach  terms  of  coordination  is  firm  and  product  homogeneity.  224  However,  since  the  proposed  merger  combines 
 two  regional  carriers  with  limited  geographic  overlap,  it  would  not  contribute  to  a  decreased  presence  by  any  nationwide  provider,  nor  would  a  regional  provider  be  lost  in  most  markets.  Therefore,  the  evidence 
 suggests  that  the  existing  level  of  competitor  asymmetries  that  are  currently  present  in  the  market  would  not  be  altered  by  this  transaction.  225  Also,  we  agree  with  the  Applicants  that  demand  and  product  and 
 technical  innovations  in  this  market  are  dynamic,  and  this  may  contribute  to  difficulties  in  maintaining  a  coordinated  outcome  in  the  mobile  telephony  services  market.  Further,  there  is  nothing  in  the  record  that 
 indicates  that  this  merger  would  reduce  product  heterogeneity  in  the  mobile  telephony  services  market.  Therefore,  we  conclude  that  the  current  level  of  heterogeneity  would  continue  to  constrain  the  ability  of 
 competing  carriers  to  reach  terms  of  coordination  and  that  the  proposed  merger  would  not  narrow  competitor  asymmetries  in  such  a  way  as  to  remove  or  undermine  this  constraint. 
 91.  Presence  of  mavericks.  In  some  circumstances,  maverick  firms  can  effectively  prevent  or  limit  coordinated  interaction.  226  Maverick  firms  are  firms  that  have  a  greater  economic  incentive  to 
 deviate  from  the  terms  of  coordination  than  do  most  of  their  rivals.  Therefore,  a  merger  may  make  coordinated  interaction  more  likely,  more  successful,  or  more  complete  if  it  involves  the  acquisition  of  a 
 maverick  firm.  227 
 92.  We  do  not  find  that  this  transaction  would  result  in  the  loss  of  a  maverick  carrier.  No  commenters  have  suggested  this  possibility,  and  there  is  nothing  in  the  record  that  indicates  that  WWC 
 should  be  considered  a  maverick  firm. 
 93.  Implications.  We  are  persuaded  by  the  Applicants  argument  that  certain  characteristics  of  the  mobile  telephony  market  environment,  including  firm  heterogeneity  and  the  presence  of  carriers  with 
 excess  spectrum  or  network  capacity,  may  continue  to  make  it  difficult  for  carriers  first  to  reach  terms  of  coordination  and  then  effectively  to  detect  and  punish  deviations  in  specific  markets.  In  addition,  we  note 
 that  there  is  no  evidence  in  the  record  to  indicate  that  mobile  telephony  carriers  have  successfully  restricted  competition  on  price  or  non-  price  terms  through  coordinated  interaction  in  specific  markets,  or 
 that  this  merger  would  make  such  interaction  more  likely  as  a  general  matter.  We  acknowledge,  however,  that  there  is  considerable  variation  across  local  geographic  markets  with  regard  to  the  number  and  identity 
 of  competing  carriers,  firm  homogeneity,  and  the  presence  of  excess  spectrum  or  network  capacity.  Because  of  this  local  variation,  it  is  difficult  to  generalize  about  the  impact  of  the  transaction  in 
 facilitating  coordinated  interaction  to  restrict  competition  on  price  or  non-  price  terms  in  specific  markets.  Therefore,  although  our  analysis  tends  strongly  to  discount  the  possibility  that  the  transaction  would  make 
 coordinated  interaction  more  likely,  more  successful,  or  more  complete,  as  a  precaution  we  take  the  possibility  of  coordinated  interaction  into  account  in  our  analysis  of  specific  markets  by  carefully 
 scrutinizing,  among  other  variables,  the  presence  and  capacity  of  rival  carriers. 
 224  DOJ/  FTC  Merger  Guidelines    2.11. 
 225  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21582-  83    157. 
 226  DOJ/  FTC  Merger  Guidelines    2.12. 
 227  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21584    160. 
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 c.  Cellular  One  Brand 
 94.  Dobson  alleges  that  ALLTELs  acquisition  of  WWC  would  negatively  affect  Dobson,  because  ALLTEL  would  thereby  acquire  the  Cellular  One  brand.  228  Specifically,  Dobson  expresses 
 concern  that  ALLTELs  acquisition  of  WWC  would  result  in  severe  harm  to  the  Cellular  One  brand,  which  in  turn  would  adversely  affect  Dobsons  substantial  investment  in  Cellular  One  and  Dobsons 
 ability  to  compete.  229  Dobson  requests  that  the  Commission  order  WWC  to  divest  the  Cellular  One  brand  to  a  buyer  with  the  incentive  to  promote  and  develop  the  brand.  230 
 95.  Dobson  uses  the  Cellular  One  brand  name  in  all  but  three  of  its  markets  pursuant  to  a  licensing  agreement  with  the  Cellular  One  Group.  231  Western  Wireless  also  provides  service  under  the 
 Cellular  One  brand  name,  and  ALLTEL  has  announced  that  it  would  re-  brand  the  current  Western  Wireless  properties  operating  under  the  Cellular  One  brand  name  to  the  ALLTEL  brand  name.  232 
 However,  ALLTEL  would  retain  WWCs  rights  in  the  Cellular  One  brand.  Dobson  argues  that  it  would  be  harmed  by  ALLTEL  assuming  WWCs  interest  in  the  brand  name  Dobson  uses  to  market  service  in 
 many  markets,  particularly  given  that  ALLTEL  branded  service  and  Cellular  One  branded  service  would  be  in  competition  in  some  markets.  233  Dobson  claims  that  ALLTEL,  by  acquiring  the  Cellular  One  brand, 
 would  have  the  economic  incentive  to  destroy  the  Cellular  One  brand  and  promote  the  ALLTEL  brand.  234 
 96.  Dobson  further  argues  that,  by  re-  branding  Western  Wirelesss  Cellular  One  properties,  ALLTEL  would  eliminate  the  Cellular  One  brand  from  41  percent  of  its  covered  markets.  235  Thus,  public 
 awareness  of  the  brand  in  those  markets  would  decrease.  Even  if  ALLTEL  were  to  allow  continued  use  of  the  Cellular  One  brand  name  in  those  markets,  Dobson  argues  that  ALLTEL  could  harm  the  brand  by 
 licensing  it  to  weak  carriers.  Dobson  likens  the  degradation  of  the  Cellular  One  brand  to  the  loss  of  a  competitor  in  the  market  236  and  argues  that  this  effect  is  particularly  harmful  in  Dobsons  rural  markets.  237 
 228  See  Dobson  Petition  at  1-  2.  The  Applicants  argue  that  Dobson  lacks  standing.  The  Applicants  state  that 
 Dobsons  license  will  not  suffer  harm,  because  Dobson  will  still  enjoy  its  licensed  use  of  the  Cellular  One  brand  name.  The  Applicants  further  argue  that  the  uncertain  nature  of  the  merged  entitys  future  actions  fail  to  establish 
 the  requisite  direct  injury  to  Dobson  to  confer  standing.  Joint  Opposition  at  17-  18.  Dobson  responds  that  it  has  proper  standing  to  file  a  petition  to  deny.  Dobson  states  that  ALLTELs  alleged  incentive  and  ability  to  destroy  the 
 brand  and  ALLTELs  alleged  goal  of  increased  competitor  concentration  confer  proper  standing  on  Dobson.  See  Reply  of  Dobson  Cellular  Systems,  Inc.  and  American  Cellular  Corporation,  filed  Mar.  28,  2005,  at  1-  2  (  Dobson 
 Reply).  We  need  not  decide  the  standing  issue  because,  as  discussed  below,  this  issue  is  moot  in  light  of  the  divestiture  of  the  Cellular  One  Brand  ordered  in  the  DOJ  consent  decree. 
 229  Dobson  Petition  at  2. 
 230  Id. 
 231  Id. 
 232  See  id.  at  3. 
 233  See  id.  at  3-  4. 
 234  Id. 
 235  Id.  at  3. 
 236  Id. 
 237  Id. 
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 Thus,  Dobson  seeks  divestiture  of  the  Cellular  One  brand  to  a  buyer  with  the  incentive  to  promote  and  develop  the  brand.  238 
 97.  The  Applicants  respond  that  the  License  Agreement  governs  the  relationship  between  Cellular  One  and  Dobson,  239  a  fact  conceded  by  Dobson.  240  The  Applicants  cite  this  agreement  as 
 indicative  of  ALLTELs  incentive  in  promoting  the  Cellular  One  brand.  241  Concluding  that  contract  law  governs  this  matter,  the  Applicants  argue  the  Commission  has  no  jurisdiction  over  this  issue.  242  Dobson 
 replies  that  the  existence  of  the  license  agreement  does  not  alleviate  the  potential  harm  of  the  merger.  243  Therefore,  despite  contract  enforcement,  the  merger  may  nevertheless  result  in  competitive  harm.  244  The 
 Applicants  also  argue  that  Dobson  asks  the  Commission  to  equalize  competition  by  maintaining  a  specific  competitive  balance  under  the  License  Agreement.  245  Dobson  replies  that  it  only  seeks  a  standard 
 divestiture  remedy  to  ensure  that  the  Cellular  One  brand  is  sold  to  a  party  likely  to  make  competitive  use  of  the  asset.  246  Furthermore,  the  Applicants  argue  that  Dobsons  equating  the  loss  of  the  Cellular 
 One  brand  with  the  loss  of  a  competitor  is  illogical.  247  Because  the  Applicants  find  the  loss  of  a  brand  to  differ  from  the  loss  of  a  service  provider,  they  conclude  the  potential  loss  of  a  brand  does  not  affect  the 
 number  of  competitors  or  the  degree  of  competition  in  a  rural,  or  any,  market.  248 
 98.  Pursuant  to  the  consent  decree  entered  into  by  DOJ  and  the  Applicants,  the  Cellular  One  brand  and  related  assets  must  be  divested.  249  DOJ  reiterates  that,  when  divestitures  are  ordered  to  remedy 
 the  loss  of  competition  as  a  result  of  the  merger,  it  seeks  to  make  certain  that  the  potential  buyer  acquired  or  has  access  to  all  assets  that  it  may  need  to  be  a  viable  and  substantial  competitor.  250  In  its  analysis  of 
 the  competitive  effects  of  this  transaction,  DOJ  explains  that  an  established  name  is  an  important  asset  that  can  impact  the  ability  of  the  buyer  to  quickly  come  into  a  market  and  attract  customers,  and  that  the 
 buyer  of  the  DOJ  divestiture  assets  may  need  the  Cellular  One  brand  to  provide  continuity  for  existing  customers  or  attract  new  business.  251  Thus,  DOJ  concludes  that,  [  i]  n  order  to  ensure  that  the  buyer  has 
 unimpaired  access  to  the  Cellular  One  mark  and  that  the  mark  is  in  the  hands  of  an  owner  who  will 
 238  Id.  at  2. 
 239  See  Joint  Opposition  at  14. 
 240  See  Dobson  Petition  at  4. 
 241  Joint  Opposition  at  14. 
 242  Id. 
 243  Dobson  Reply  at  3. 
 244  Id. 
 245  Joint  Opposition  at  14. 
 246  Dobson  Reply  at  3. 
 247  Joint  Opposition  at  15. 
 248  Id. 
 249  DOJ  requires  the  divestiture  of  all  right,  title  and  interest  in  trademarks,  trade  names,  service  marks,  service 
 names,  designs,  and  intellectual  property,  all  license  agreements  for  use  of  the  Cellular  One  mark,  technical  information,  computer  software  and  related  documentation,  and  all  records  relating  to  the  divestiture  assets.  DOJ 
 Competitive  Impact  Statement  at  3.  See  also  DOJ  Proposed  Final  Judgment  at  13.  250 
 DOJ  Competitive  Impact  Statement  at  13.  251 
 Id.  DOJ  further  states  that  ALLTEL  has  no  need  for  the  Cellular  One  brand  as  it  markets  under  the  ALLTEL  brand  name.  See  id. 
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 aggressively  act  to  promote  and  preserve  it,  the  Applicants  must  sell  the  Cellular  One  brand  name  to  an  appropriate  purchaser  with  the  intent  and  capability  to  maintain  the  value  of  the  Cellular  One  brand 
 name.  252  Because  DOJ  has  ordered  the  divestiture  of  the  Cellular  One  brand,  we  find  that  this  issue  is  moot. 
 3.  Vertical  Issues    Roaming 
 99.  In  this  section,  we  consider  the  potential  vertical  or  other  non-  horizontal  harms  of  the  proposed  transaction.  A  vertical  merger  is  one  that  occurs  between  firms  at  different  but  adjacent  levels 
 of  production  or  distribution  of  a  good  or  service.  253  The  only  issue  of  this  type  on  the  record  or  that  we  identify  in  our  independent  analysis  is  the  possible  impact  of  the  proposed  transaction  on  roaming. 
 a.  Background 
 100.  Several  petitioners  and  commenters  have  raised  concerns  regarding  the  impact  of  the  proposed  merger  on  the  availability  and  cost  of  roaming  arrangements.  They  claim  that  the  proposed 
 transaction  could  result  in  ALLTEL  being  able  to  engage  in  anticompetitive  roaming  practices  and  that  such  practices  would  be  particularly  harmful  to  small  carriers  which  rely  heavily  on  roaming  agreements 
 to  augment  their  limited  service  areas.  254 
 101.  Roaming  occurs  when  the  subscriber  of  one  commercial  mobile  radio  services  (  CMRS)  provider  travels  beyond  the  service  area  of  that  provider  and  utilizes  the  facilities  of  another  CMRS 
 provider  to  place  an  outgoing  call,  to  receive  an  incoming  call,  or  to  continue  an  in-  progress  call.  255  A  subscriber  establishes  a  roaming  arrangement  with  a  CMRS  provider  manually  by  personally  entering 
 into  a  contractual  agreement  with  that  provider  for  the  right  to  roam  on  its  network  (e.  g.,  giving  the  provider  a  credit  card  number  to  pay  for  roaming  charges).  256  In  contrast,  automatic  roaming  involves 
 an  agreement  between  two  carriers  and  allows  all  of  the  subscribers  of  a  carrier  to  make  calls  on  the  network  of  the  other  without  taking  any  action  beyond  the  making  of  the  call.  257  Thus,  automatic  roaming 
 is  far  more  convenient  for  a  subscriber  than  manual  roaming  and,  as  a  practice,  has  become  increasingly  widespread.  258 
 102.  Section  20.12  of  the  Commissions  rules  imposes  on  CMRS  providers  the  obligation  to  provide  manual  roaming  arrangements  to  the  subscriber  of  another  provider  on  request.  259  Conversely, 
 the  rule  does  not  impose  on  a  provider  any  obligation  to  provide  automatic  roaming  arrangements.  260 
 252  Id. 
 253  See  Brown  Shoe  Co.  v.  United  States,  370  U.  S.  294  (1962)  (  Economic  arrangements  between  companies 
 standing  in  a  supplier-  customer  relationship  are  characterized  as  vertical.  ).  254 
 See  discussion  of  petitioners  and  commenters  concerns,  infra  paras.  104-  05,  107.  255 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21586    166;  see  also  Automatic  and  Manual  Roaming  Obligations  Pertaining  to  Commercial  Mobile  Radio  Service,  WT  Docket  No.  00-  193,  Notice  of  Proposed 
 Rulemaking,  15  FCC  Rcd.  21628,  21629    2  (2000)  (  Roaming  Notice).  256 
 Roaming  Notice,  15  FCC  Rcd.  at  21629    3.  257 
 Id.  at  21629-  30    4.  258 
 Id.  at  21634    13;  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21588    174.  259 
 47  C.  F.  R.    20.12(  c)  specifically  provides: 
 (continued.) 
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 103.  In  the  Application,  ALLTEL  and  WWC  address  the  impact  of  the  merger  on  the  availability  of  automatic  roaming  services.  They  assert  that  the  merger,  while  reducing  ALLTELs  need 
 to  obtain  automatic  roaming  services  for  its  own  subscribers  by  expanding  its  network  coverage,  may  simultaneously  increase  the  automatic  roaming  services  that  it  offers  to  other  carriers.  261  The  Applicants 
 explain  that  WWC,  while  using  CDMA  to  provide  service  to  its  subscribers,  has  deployed  a  GSM  overlay  on  its  network  in  order  to  provide  automatic  roaming  services  to  other  GSM  carriers.  262  If  the  merger  is 
 approved,  they  assert,  ALLTEL  would  have  the  benefit  of  WWCs  expertise  in  this  area,  and  would  evaluate  whether  to  establish  a  similar  overlay  on  its  network  to  provide  expanded  automatic  roaming 
 agreements.  263  Thus,  they  argue,  the  merger  may  have  pro-  competitive  benefits  in  the  automatic  roaming  market. 
 104.  Lamar  and  RTG  assert,  however,  that  the  merger  should  be  denied  because  it  would  create  the  opportunity  for  ALLTEL  to  engage  in  anticompetitive  roaming  practices.  264  They  note  that 
 roaming  arrangements  can  only  be  made  with  a  technologically  compatible  network,  and  that  the  proposed  merger  would  result  in  a  two-  to-  one  reduction  in  analog  carriers  in  many  markets,  leaving 
 analog-  only  carriers  with  only  one  possible  roaming  partner  in  those  areas.  265  They  suggest  that  this  sort  of  market  consolidation  may  lead  larger  carriers  to  favor  each  other  with  sweetheart  roaming  deals  or  to 
 charge  rural  carriers  roaming  premiums.  266  They  further  assert  that  rural  carriers  may  lose  roaming  coverage  previously  provided  by  WWC  if  ALLTEL  chooses  not  to  honor  the  WWC  roaming  agreements, 
 and  that  ALLTEL  may  further  restrict  roaming  availability  by  not  entering  into  any  new  agreements  in  the  future.  267  They  note  that  because  small  carriers  have  limited  service  areas,  the  availability  of 
 automatic  roaming  arrangements  is  crucial  to  their  ability  to  compete.  268  Lamar  and  RTG  therefore 
 (Continued  from  previous  page)  Each  carrier  subject  to  this  section  must  provide  mobile  radio  service  upon  request  to  all 
 subscribers  in  good  standing  to  the  services  of  any  carrier  subject  to  this  section,  including  roamers,  while  such  subscribers  are  located  within  any  portion  of  the  licensees  licensed  service 
 area  where  facilities  have  been  constructed  and  service  to  subscribers  has  commenced,  if  such  subscribers  are  using  mobile  equipment  that  is  technically  compatible  with  the  licensee's  base 
 stations.  260 
 Id.  261 
 See  Application  at  4-  5,  8.  262 
 Id.  at  8.  263 
 Id.  264 
 See  Lamar  Petition  at  8-  9;  Comments  in  Opposition  of  Rural  Telecommunications  Group,  Inc.,  filed  Mar.  9,  2005,  at  2,  8-  9  (  RTG  Petition)  (filing  a  pleading  titled  Comments  in  Opposition;  however,  as  RTG  requests  the 
 denial  of  the  applications,  we  will  treat  its  pleading  as  if  it  were  a  petition  to  deny).  The  Applicants  argue  that  Lamar  and  RTG  lack  standing  to  challenge  the  applications  for  transfer  of  control.  See  Joint  Opposition  at  15-  18. 
 The  Applicants  argue  that  none  of  the  petitioners  has  demonstrated  that  it  is  a  party  in  interest  as  required  by  section  309(  d)  of  the  Communications  Act,  as  amended.  Having  reviewed  these  arguments,  we  have  doubts 
 regarding  whether  all  of  the  petitioners  have  adequately  demonstrated  that  they  have  standing.  However,  we  need  not  decide  the  standing  issue  for  any  of  the  petitioners  because  we  do  not,  in  any  case,  find  the  petitioners 
 arguments  for  denial  of  the  applications  to  be  persuasive.  265 
 RTG  Petition  at  8-  9.  266 
 Lamar  Petition  at  9;  RTG  Petition  at  9.  267 
 Lamar  Petition  at  9;  RTG  Petition  at  9.  268 
 Lamar  Petition  at  9;  RTG  Petition  at  8;  see  also  Comments  of  United  States  Cellular  Corporation,  filed  Mar.  9,  2005,  at  3  (  USCC  Comments). 
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 suggest  that,  at  a  minimum,  the  Commission  should  condition  the  proposed  merger  on  a  requirement  that  ALLTEL  allow  automatic  roaming  access  to  the  merged  network  by  all  carriers  at  rates  no  less  favorable 
 than  it  has  been  charging  WWC  since  the  merger  was  announced.  269 
 105.  USCC  expresses  a  similar  concern  that  national  sized-  carriers,  such  as  the  proposed  merged  entity,  could  in  the  future  refuse  to  sign  roaming  agreements  with  smaller  carriers,  and  that  the 
 inability  to  obtain  automatic  roaming  would  put  these  smaller  carriers  out  of  business,  reducing  competitive  pressures  on  the  larger  carriers  even  further.  270  USCC  acknowledges  that,  in  its  past 
 negotiations  with  ALLTEL  and  WWC,  it  has  experienced  no  anticompetitive  conduct,  particularly  in  connection  with  roaming  arrangements  for  voice  service.  271  It  asserts,  however,  that  if  national  carriers 
 engage  in  such  impermissible  conduct  in  the  future,  the  Commission  would  need  to  intervene.  272  It  states  that,  to  ensure  the  availability  of  automatic  roaming  and  protect  competition,  the  Commission  should 
 declare  that  national  carriers  must  make  available  automatic  roaming  agreements  for  voice  and  data  traffic  to  smaller  carriers  on  reasonable  terms,  and  that  a  general  refusal  to  do  so  would  be  an  unreasonable 
 practice  under  sections  201  and  202  of  the  Act.  273  Doing  so  in  this  merger  is  appropriate,  USCC  argues,  because  it  will  help  to  preserve  the  remaining  competition  and  because  the  rapid  development  of  the  data 
 service  market  makes  it  urgent  to  address  data  roaming  now.  274 
 106.  In  their  Joint  Opposition,  the  Applicants  argue  that  the  Petitioner  and  commenters  are  in  effect  seeking  to  modify  section  20.12  to  require  automatic  roaming  in  addition  to  manual  roaming,  and 
 that  this  change  in  policy  is  more  appropriately  addressed  in  a  rulemaking  proceeding  than  a  merger  review.  275  This  is  particularly  true,  they  argue,  given  that  the  Commission  already  has  a  pending 
 rulemaking  proceeding  in  which  it  specifically  sought  comment  on  whether  to  require  carriers  to  provide  automatic  roaming.  276  They  further  assert  that  there  is  no  evidence  demonstrating  that  the  merger  would 
 enable  the  new  entity  to  engage  in  anticompetitive  roaming  practices,  and  that  the  Commission  has  already  rejected  the  claim  that  a  two-  to-  one  reduction  in  analog  carriers  in  a  market  would  cause  a 
 significant  adverse  effect  on  the  roaming  market.  277  They  argue  that,  because  the  merged  entity  would  still  need  roaming  service  from  other  carriers  in  many  areas,  it  would  not  have  any  incentive  to  impose 
 269  Lamar  Petition  at  9;  RTG  Petition  at  9. 
 270  USCC  Comments  at  3. 
 271  Id.  at  4.  USCC  states  that  it  anticipates  that  it  will  have  an  agreement  with  ALLTEL  for  data  roaming  next  year. 
 Id.  at  4-  5  n.  7.  272 
 Id.  at  5.  273 
 Id.  at  4-  5,  8.  The  Rural  Cellular  Association  (RCA)  similarly  suggests  that  we  adopt  measures  or  policies  in  this  proceeding  to  ensure  the  availability  of  voice  and  data  automatic  roaming  services  and  limit  the  anticompetitive 
 effects  of  wireless  mergers  in  rural  areas.  See  Ex  Parte  Letter  from  David  L.  Nace,  Counsel  for  Rural  Cellular  Association,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission  (filed  April  5,  2005). 
 274  USCC  Comments  at  9-  10. 
 275  Joint  Opposition  at  8. 
 276  Joint  Opposition  at  8  n.  18.  See  generally,  Roaming  Notice.  As  USCC  notes,  the  Wireless  Telecommunications 
 Bureau  has  also,  more  recently,  put  out  a  notice  that  seeks  comment,  inter  alia,  on  the  availability  of  automatic  roaming  and  whether  an  absence  of  automatic  roaming  in  an  area  is  related  to  the  number  of  wireless  carriers  in  the 
 area.  See  WTB  Seeks  Comment  on  CMRS  Market  Competition,  WT  Docket  No.  05-  71,  Public  Notice,  DA  05-  487  (rel.  Feb.  25,  2005);  USCC  Comments  at  4  n.  6. 
 277  Joint  Opposition  at  9-  10  (citing  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21590  178). 
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 unreasonably  high  or  discriminatory  rates  for  roaming,  and  that  if  it  did  attempt  to  impose  such  rates,  carriers  could  obtain  relief  through  sections  201  and  202  of  the  Act.  278 
 107.  Lamar  and  RTG  respond  that  raising  the  roaming  issue  in  the  merger  review  is  appropriate,  and  that,  because  the  rulemaking  proceeding  addressed  to  roaming  has  been  pending  for  four 
 years,  the  issue  is  therefore  ripe  for  a  decision.  279  USCC  argues  that  the  Commission  has  established  general  policies  in  merger  reviews  before.  280  It  further  argues  that  it  does  not  seek  a  change  in  section 
 20.12,  only  a  clarification  of  carriers  obligations  under  the  provisions  of  sections  201  and  202  of  the  Act.  281  USCC  urges  the  Commission  not  to  accept  the  mere  contention  by  the  Applicants  that  the  new 
 entity  would  not  engage  in  anticompetitive  roaming  practices,  given  that  no  promises  were  made  to  provide  roaming  services  for  data  traffic.  282 
 b.  Discussion 
 108.  The  commenters  raise  important  concerns  about  the  current  state  of  the  roaming  market  in  rural  areas.  Our  existing  rules  address  many  of  these  concerns,  and  offer  possible  avenues  for  relief. 
 Our  manual  roaming  rule  requires  other  carriers  to  complete  calls  initiated  by  ALLTELs  customers  where  ALLTEL  cannot  because  it  has  neither  its  own  signal  nor  an  automatic  roaming  agreement.  283  In 
 addition,  to  further  ensure  compliance,  we  adopt  as  a  condition  to  our  grant  in  this  Order  a  reciprocal  duty,  i.  e.,  that  ALLTEL  may  not  prevent  its  customers  from  reaching  another  carrier  and  completing  their 
 calls  in  these  circumstances,  unless  specifically  requested  to  do  so  by  a  subscriber.  We  also  note  that  if  a  roaming  partner  believes  that  ALLTEL  is  charging  unreasonable  roaming  rates,  it  can  always  file  a 
 complaint  with  the  Commission  under  section  208  of  the  Communications  Act.  284 
 109.  We  recognize  that  the  manual  roaming  requirement  and  the  ability  to  file  a  section  208  complaint  may  not  fully  address  the  concerns  raised  by  the  commenters.  However,  given  the  broad  scope 
 of  the  concerns  raised    many  of  which  seem  to  call  for  a  reevaluation  of  the  Commissions  roaming  rules  and  policies    they  are  more  appropriately  addressed  in  the  context  of  a  rulemaking  proceeding.  In  the 
 near  future,  the  Commission  plans  to  initiate  a  proceeding  to  examine  whether  our  rules  regarding  the  roaming  requirements  applicable  to  CMRS  providers  should  be  modified  to  take  into  account  current 
 market  conditions  and  developments  in  technology.  This  proceeding  will  afford  interested  parties  an  opportunity  to  comment  on  a  variety  of  roaming  issues,  including  manual  and  automatic  roaming, 
 technical  considerations,  and  small  and  rural  carrier  roaming  concerns. 
 278  Id.  at  12. 
 279  Reply  to  Joint  Opposition  to  Petitions  to  Deny  and  Comments  of  Lamar  County  Cellular,  filed  Mar.  28,  2005,  at 
 4-  5  (  Lamar  Reply);  Comments  in  Response  to  Joint  Opposition  to  Petitions  to  Deny  and  Comments,  filed  Mar.  28,  2005,  at  3. 
 280  Reply  of  United  States  Cellular  Corporation,  filed  Mar.  28,  2005,  at  2-  3  (  USCC  Reply). 
 281  Id.  at  3. 
 282  Id. 
 283  See  47  C.  F.  R.    20.12;  see  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21592    182. 
 284  47  U.  S.  C.    208.  See  also  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21592    182. 
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 4.  Market-  by-  Market  Evaluation 
 a.  Analytical  Standard 
 110.  As  discussed  in  Part  IV.  B.  1  above,  a  calculation  of  the  HHI  in  a  market  and  our  spectrum  analysis  were  only  the  beginning  of  our  analysis  of  the  competitive  effects  of  the  merger,  because  the 
 purpose  of  that  effort  is  to  eliminate  from  further  analysis  markets  in  which  there  is  no  potential  for  competitive  harm.  And,  in  our  analyses  of  potential  unilateral  effects,  coordinated  interaction,  and  vertical 
 issues,  discussed  in  Parts  IV.  B.  2  and  IV.  B.  3  above,  we  provided  a  general  assessment  of  factors  beyond  concentration  that  are  important  to  determining  the  likely  competitive  effects  of  the  proposed  merger.  On 
 the  basis  of  these  combined  analyses,  we  have  concluded  that,  as  a  general  matter,  most  of  the  markets  identified  for  further  review  by  our  preliminary  HHI  and  spectrum  analysis  are  likely  to  suffer 
 anticompetitive  effects  as  a  result  of  the  merger.  Having  evaluated  these  markets  on  generalized  bases,  we  note  that  the  actual  array  and  combination  of  these  factors  in  any  one  of  these  markets  could  lead  to  a 
 different  conclusion  for  that  particular  market.  Our  next  step,  therefore,  is  to  apply  those  general  analyses  on  a  market-  specific  basis  to  determine  those  markets  in  which  anticompetitive  effects  are  likely. 
 111.  The  variables  we  used  to  conduct  this  analysis,  which  we  drew  from  those  larger  analyses,  can  be  divided  into  two  basic  categories,  discussed  in  greater  detail  below.  The  first  category 
 consists  of  variables  selected  to  take  account  of  the  responses  of  rival  carriers  to  a  price  increase  and  output  reduction,  or  an  adverse  change  in  other  terms  and  conditions  of  service,  by  the  combined  entity. 
 In  addition  to  unilateral  effects,  the  variables  in  the  first  category  also  take  account  of  conditions  affecting  the  likelihood  of  adverse  coordinated  effects.  The  second  category  consists  of  variables  selected  to 
 account  for  distinguishing  characteristics  of  the  combined  entity  that  may  affect  its  incentive  to  raise  price  and  suppress  output,  or  to  make  an  adverse  change  in  other  terms  and  conditions  of  service.  Apart  from 
 the  variables  relating  to  the  responses  of  rival  carriers  and  the  characteristics  of  the  merged  entity,  we  also  examined  whether  the  near-  term  availability  of  additional  spectrum  suitable  for  the  provision  of  mobile 
 telephony  services  will  affect  the  likelihood  of  adverse  competitive  effects  in  specific  markets. 
 112.  Potential  Response  of  Rivals.  The  merged  entity  proposed  in  this  transaction  would  have  little  incentive  to  raise  its  price  or  alter  other  terms  and  conditions  of  service  to  the  detriment  of 
 consumers  if,  after  the  merger,  a  sufficiently  large  number  of  its  customers  could  obtain  comparable  services  on  what  would  now  be  better  terms  from  other  carriers.  This  ability  would  depend,  in  turn,  on 
 both  the  presence  and  the  capacity  of  rival  carriers  in  specific  markets  to  provide  comparable  services,  rather  than  simply  on  their  current  subscriber  market  shares.  To  take  account  of  the  presence  of  rival 
 carriers,  we  identified  the  number  of  rival  carriers  that  provide  substantial  service  to  customers  in  the  relevant  market.  285 
 113.  If  rival  carriers  face  binding  capacity  constraints,  such  as  the  inability  to  obtain  access  to  needed  spectrum  in  the  relatively  near-  term,  then  they  likely  will  not  be  able  to  respond  to  the  combined 
 carriers  price  increase  or  other  harmful  conduct  in  a  manner  sufficient  in  the  aggregate  to  make  the  action  of  the  combined  carrier  unprofitable.  In  other  words,  if  the  rival  carriers  do  not  have  the  capacity  to  add 
 customers  (or  do  not  have  the  capacity  to  do  so  without  a  noticeable  deterioration  in  service  quality),  then  they  will  not  be  attractive  alternatives  for  customers  and  will  not  restrain  the  combined  carriers  price 
 increase.  On  the  other  hand,  as  discussed  in  Part  IV.  B.  2.  a,  above,  even  rival  carriers  with  relatively  small 
 285  We  used  American  Roamer  and  Census  Bureau  data  to  evaluate  whether  rival  carriers  had  substantial  network 
 coverage  in  terms  of  both  population  and  land  area  of  the  market.  Although,  for  reasons  outlined  above,  we  were  more  concerned  in  this  instance  about  the  possibility  of  adverse  unilateral  affects  than  coordinated  effects  in  specific 
 markets,  we  note  that  this  variable  would  also  be  useful  for  identifying  specific  markets  in  which  adverse  coordinated  effects  are  likely. 
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 market  shares  currently  may  have  the  ability  to  discipline  the  market  in  the  future  if  they  do  have  adequate  capacity  to  add  customers.  To  account  for  the  capacity  of  rival  carriers,  we  examined  the 
 amount  of  spectrum  suitable  for  the  provision  of  mobile  telephony  services  that  each  rival  carrier  controls  in  the  relevant  market  and  also  the  geographic  coverage  of  each  rival  carriers  network  in  the  market.  286 
 114.  As  discussed  previously,  the  fewer  the  rivals  in  a  market,  the  easier  it  may  be  for  them  to  reach  an  understanding,  either  explicit  or  tacit,  not  to  compete  vigorously  against  each  other.  287  In 
 addition,  a  rival  carrier  may  have  a  strong  incentive  to  deviate  from  the  terms  of  coordination  if  it  has  excess  spectrum  and/  or  network  capacity  relative  to  the  traffic  generated  by  its  existing  customer  base. 
 Therefore,  the  variables  selected  to  measure  the  presence  and  capacity  of  rival  carriers  were  used  to  take  into  account  coordinated  effects  as  well  as  unilateral  effects. 
 115.  Incentives  of  Merged  Entity.  We  consider  two  variables  that  affect  the  incentives  of  the  merged  entity  to  raise  price  and  suppress  output,  or  to  make  an  adverse  change  in  other  terms  and 
 conditions  of  service.  The  first  is  the  subscriber  market  share  of  the  combined  entity.  The  transaction  affords  the  combined  entity  a  larger  base  of  sales  on  which  to  gain  from  a  price  increase,  and  eliminates  a 
 competitor  to  which  customers  otherwise  might  have  diverted  their  business.  However,  the  incentive  to  raise  price  depends  on  whether  the  gain  on  sales  made  at  the  higher  price  outweighs  the  loss  in  sales  due 
 to  the  price  increase.  A  large  market  share  may  make  it  more  likely  that  a  price  increase  will  be  profitable  by  reducing  the  size  of  the  output  restriction  needed  to  produce  a  given  price  increase.  The  second 
 variable  in  this  category  is  the  amount  of  spectrum  suitable  for  the  provision  of  mobile  telephony  services  that  the  combined  entity  would  control  in  the  relevant  markets.  The  transaction  may  make  a  price 
 increase  particularly  profitable  in  markets  where  it  gives  the  combined  carrier  control  of  a  large  share  of  the  total  relevant  spectrum,  leaving  little  capacity  for  competing  carriers  to  use  to  attract  the  combined 
 carriers  customers. 
 116.  Access  to  Additional  Spectrum.  Apart  from  the  presence  and  current  capacity  of  rival  carriers,  the  response  of  rivals  to  a  price  increase  or  reduction  in  quality  by  the  merged  entity  may  also 
 depend  on  their  abilities  to  obtain  access  to  additional  spectrum  suitable  for  the  provision  of  mobile  telephony  services  in  the  relevant  market  in  a  reasonably  short  period  of  time.  Access  to  additional 
 spectrum  may  also  deter  adverse  unilateral  effects  in  specific  markets  by  making  possible  the  entry  of  new  carriers.  However,  we  did  not  find  spectrum  to  be  dispositive  in  any  of  our  divestiture  markets, 
 therefore  this  criteria  did  not  factor  heavily  into  our  analysis  for  this  transaction. 
 117.  Interaction  of  Variables.  To  summarize,  we  relied  on  the  following  variables  to  identify  markets  where  the  transaction  is  likely  to  diminish  competition:  (1)  the  number  of  rival  carriers  and  their 
 market  shares  that  offer  competitive  nationwide  service  plans  as  well  as  regional  and  local  plans;  (2)  the  spectrum  holdings  of  each  of  the  rival  carriers;  (3)  the  geographic  coverage  of  their  respective  networks; 
 (4)  the  combined  entitys  post-  transaction  market  share;  and  (5)  the  share  of  spectrum  suitable  for  the  provision  of  mobile  telephony  services  controlled  by  the  combined  entity.  In  reaching  determinations  on 
 specific  markets,  we  balanced  these  factors  on  a  market-  specific  basis,  and  considered  the  totality  of  the  circumstances  in  each  market.  Thus,  for  example,  if  our  count  of  the  number  of  rival  carriers  and  our 
 scrutiny  of  their  spectrum  holdings  and  network  coverage  indicated  that  the  response  of  rival  carriers  will  likely  be  sufficient  to  limit  the  ability  and  incentive  of  the  combined  entity  to  raise  price  unilaterally,  we 
 found  that  the  transaction  is  not  harmful  to  competition  in  a  specific  market  even  in  the  presence  of  a 
 286  We  placed  greater  weight  in  this  regard  on  the  six  national  carriers  and  the  three  major  regional  carriers.  We 
 assumed  that  each  of  these  carriers  operating  in  the  market  already  has  significant  name  recognition  and  advertising  presence  in  the  market,  and  had  sufficient  access  to  any  capital  or  equipment  necessary  to  expand. 
 287  See  discussion  supra  Part  IV.  B.  2.  b  (discussing  coordinated  effects). 
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 relatively  high  post-  transaction  market  share  of  the  combined  entity.  We  also  scrutinized,  and  based  our  determinations  on,  the  uniformity  of  competitive  conditions  in  local  markets.  Thus,  in  some  instances,  we 
 found  that  the  transaction  is  not  harmful  to  competition  in  a  particular  market  if  the  potential  harm  from  the  transaction  is  confined  to  a  small  enclave  within  the  market,  and  this  harm  is  likely  to  be  ameliorated 
 by  the  more  favorable  competitive  conditions  in  the  majority  of  the  market. 
 b.  Results  of  Analysis 
 118.  As  discussed  above,  there  is  a  significant  likelihood  of  unilateral  effects  or  coordinated  interaction  as  a  result  of  this  transaction,  in  most  of  the  markets  identified  by  the  initial  screen. 
 Conducting  further  analysis  on  a  case-  by-  case  basis  confirmed  that  this  remained  true  for  most  markets,  except  for  those  markets  in  which,  post-  transaction,  there  would  still  be  four  or  more  genuine  competitors 
 in  the  market,  each  with  a  sufficiently  built-  out  network  and  sufficient  bandwidth  to  be  able  to  attract  customers  away  from  ALLTEL  should  it  attempt  to  increase  price  or  reduce  service.  In  these  latter 
 markets,  we  conclude  that  even  a  relatively  high  post-  merger  market  share  for  ALLTEL  does  not  indicate  likely  competitive  harm.  As  for  any  markets  in  which  the  merger  would  reduce  the  number  of 
 competitors  to  two  or  fewer,  the  resulting  degree  of  concentration  presents  a  significant  likelihood  of  successful  unilateral  effects  and/  or  coordinated  interaction  even  if  the  merged  entitys  market  share  is  not 
 especially  high.  In  between  these  two  scenarios  were  markets  that  presented  less  clear  pictures  with  regard  to  the  factors  discussed  above,  and  we  have  examined  each  in  detail  to  determine  whether  there 
 would  be  sufficient  competitive  forces  remaining  after  the  merger  to  conclude  that  the  merger  is  not  likely  to  result  in  competitive  harm  in  that  market. 
 119.  Using  the  analytical  standard  outlined  above,  our  market-  specific  analysis  eliminated  only  three  of  the  markets  identified  by  the  initial  screen  for  further  review.  Based  on  our  examination  of 
 the  different  variables  and  the  interaction  among  them,  we  find  that,  in  these  eliminated  markets,  the  transaction  is  unlikely  to  diminish  competition  through  either  unilateral  action  by  the  merged  entity  or 
 coordinated  interaction  among  competing  carriers.  Thus,  although  the  structure  of  these  eliminated  markets  would  change  as  a  result  of  the  transaction,  our  market-  specific  analysis  indicates  that 
 competitive  pressure  to  attract  and  retain  customers  would  still  be  sufficient  to  constrain  carrier  conduct  with  regard  to  pricing  and  other  terms  and  conditions  of  service. 
 120.  Specific  Markets  in  which  Competitive  Harm  is  Likely.  We  list,  below,  the  sixteen  markets  in  which  our  case-  by-  case  analysis  indicated  that  competitive  harm  is  likely  as  a  result  of  this 
 transaction.  Detailed  discussion  of  these  markets  is  contained  in  Appendix  C.  As  we  note  above,  the  transaction  would  almost  certainly  be  harmful  to  competition  if  it  resulted  in  a  reduction  in  the  number  of 
 rival  carriers  from  3  to  2  or  2  to  1.  In  several  markets,  we  see  just  such  a  reduction,  and  in  each  case  we  find  competitive  harm  and  impose  a  remedy.  The  remaining  markets  are  on  the  list  based,  on  the  totality 
 of  the  circumstances,  on  the  interaction  of  the  variables  we  analyzed.  In  particular,  these  latter  markets  represent  markets  in  which  the  post-  transaction  market  share  or  spectrum  holdings  of  the  combined  entity 
 likely  make  it  profitable  for  the  entity  to  raise  price  and  restrict  output,  and  the  presence  and  capacity  of  rival  carriers,  taking  into  account  near-  term  opportunities  to  obtain  access  to  additional  spectrum,  are  such 
 that  the  response  of  rival  carriers  is  likely  insufficient  to  deter  such  unilateral  actions. 
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 121.  Most  of  these  sixteen  markets  are  smaller  markets  with  high  market  shares  for  the  merged  entity  and  few  competing  carriers.  In  these  markets,  we  are  concerned  that,  post-  merger,  competing 
 carriers  would  not  be  sufficiently  numerous  to  deter  anticompetitive  behavior  by  the  merged  entity.  288 
 CMA  Name 
 CMA334  Arkansas  11  -  Hempstead 
 CMA430  Kansas  3  -  Jewell 
 CMA431  Kansas  4  -  Marshall 
 CMA435  Kansas  8  -  Ellsworth 
 CMA436  Kansas  9  -  Morris 
 CMA437  Kansas  10  -  Franklin 
 CMA441  Kansas  14  -  Reno 
 CMA534  Nebraska  2  -  Cherry 
 CMA535  Nebraska  3  -  Knox 
 CMA536  Nebraska  4  -  Grant 
 CMA537  Nebraska  5  -  Boone 
 CMA538  Nebraska  6  -  Keith 
 CMA539  Nebraska  7  -  Hall 
 CMA540  Nebraska  8  -  Chase 
 CMA541  Nebraska  9  -  Adams 
 CMA542  Nebraska  10  -  Cass 
 122.  CMA658  Texas  7-  Fannin.  In  the  markets  of  concern  listed  above,  we  did  not  include  CMA658  Texas  7-  Fannin.  Lamar  and  RTG  each  raised  concerns  about  this  particular  market.  For  the 
 reasons  below,  we  are  not  persuaded  by  these  arguments,  and  conclude  that  this  market  should  not  be  included  in  our  list  of  markets  of  concern. 
 123.  Lamar  argues  that  there  are  specific  competitive  harms  in  CMA658  Texas  7-  Fannin  that  would  occur  as  a  result  of  this  transaction.  It  claims  that  ALLTEL  would  hold  70  megahertz  of  spectrum 
 in  this  market  and  this  would  give  ALLTEL  many  anticompetitive  opportunities  and  incentives.  289  By  allowing  ALLTEL  to  aggregate  more  than  41  percent  of  the  available  spectrum  in  this  CMA,  Lamar 
 asserts  the  price  of  spectrum  in  this  market  would  rise,  preventing  Lamar  or  another  carrier  from  expanding  their  services.  290  Further,  ALLTEL  would  have  70  megahertz  of  spectrum  in  other  markets, 
 and  this  would  negatively  affect  these  other  markets  as  well.  291  Finally,  Lamar  argues  that  the  merged  firms  high  market  share  would  create  a  potential  barrier  to  entry.  292 
 288  For  convenience,  we  limit  our  discussion  of  the  markets  of  concern  to  CMAs  because,  upon  completing  our 
 competitive  analysis,  we  find  that  the  most  exact  divestiture  area  to  eliminate  concerns  of  competitive  harm  would  be  CMAs. 
 289  Lamar  Petition  at  7;  Lamar  Reply  at  2. 
 290  Lamar  Petition  at  7;  Lamar  Reply  at  2. 
 291  Lamar  Petition  at  8. 
 292  Id.  at  7. 
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 124.  CMA658  Texas  7-  Fannin  was  identified  by  our  initial  screen  and  was  subject  to  a  case-by-  case  review  based  on  the  analytical  standards  discussed  above.  That  review  did  not  indicate  that 
 competitive  harms  were  likely  to  result  from  this  transaction  in  CMA658.  293  Our  analysis  of  spectrum  aggregation  in  this  market  reveals  that  ALLTEL  would  hold  70  megahertz  in  only  2  out  of  15  counties  in 
 this  CMA,  and  that  these  counties  represent  only  11  percent  of  the  CMA  population.  294  Moreover,  ALLTEL  does  not  hold  any  spectrum  in  9  counties,  295  making  it  is  a  facilities-  based  carrier  in  only  a 
 portion  of  CMA658.  One  of  the  9  counties  in  which  ALLTEL  does  not  hold  spectrum  is  Lamar  County,  the  sole  county  where  Lamar  holds  spectrum  and  offers  a  facilities-  based  service.  296  Therefore,  the 
 ALLTEL-  WWC  transaction  would  not  result  in  the  loss  of  a  competitor  in  Lamar  County. 
 125.  We  also  find  it  unlikely  that  post-  transaction  ALLTEL  would  be  able  to  deter  entry  into  CMA658.  Although  ALLTELs  market  share  would  increase  as  a  result  of  the  transaction  to 
 [REDACTED]  percent,  297  other  carriers,  including  Cingular,  Sprint,  and  Verizon,  are  also  in  the  market  with  substantial  market  share  and  network  coverage.  298  We  find  that  entry  into  this  market  has  already 
 occurred  and  further  that  ALLTELs  market  share  relative  to  the  other  providers  would  not  give  ALLTEL  the  ability  to  limit  either  entry  or  expansion  of  mobile  telephony  service  in  CMA658. 
 126.  Lamar  claims  that  ALLTEL  would  be  able  to  engage  in  anticompetitive  pricing  to  force  Lamar  and  potentially  other  competitors  out  of  the  market.  299  This  argument  implies  that  ALLTEL  would 
 have  the  incentive  and  ability  to  implement  a  predatory  pricing  strategy  300  in  CMA658  Texas  7-  Fannin.  Based  on  the  record  and  a  careful  review  of  conditions  in  CMA658,  we  find  that  the  merged  entity  would 
 likely  be  unable  to  engage  in  successful  price  predation.  Even  if  ALLTEL  believed  such  a  strategy  was  profitable  in  the  long-  run,  it  is  unlikely  that  it  would  succeed  since  there  are  five  national  companies  with 
 network  coverage  in  this  CMA  that  have  more  subscribers  and  revenues  nationwide  than  ALLTEL  post-transaction.  301  If  the  merged  entity  were  to  attempt  to  engage  in  predatory  pricing,  it  is  highly  unlikely 
 293  See  Appendix  D. 
 294  ALLTEL  will  hold  70  megahertz  in  Cass  and  Red  River  counties  in  Texas.  See  Application,  Exhibit  3  at  5.  For 
 population  statistics,  see  U.  S.  Department  of  Commerce,  U.  S.  Census  Bureau,  Census  2000  (  Census  2000).  295 
 ALLTEL  does  not  hold  spectrum  in  Delta,  Fannin,  Hopkins,  Hunt,  Lamar,  Marion,  Rains,  Upshur,  and  Wood  counties.  See  Application,  Exhibit  3  at  5. 
 296  See  Lamar  Petition  at  2;  Lamar  Reply  at  2-  3;  see  also  Application,  Exhibit  1,  Attachment  2  at  5. 
 297  See  NRUF  data,  June  2004. 
 298  [REDACTED].  See  American  Roamer,  January  2005  data;  Census  2000. 
 299  Lamar  Reply  at  3. 
 300  Predatory  pricing  occurs  when  a  firm  first  lowers  its  price  to  drive  its  rivals  out  of  the  market  as  well  as  to  deter 
 entry,  and  then  raises  its  price  once  its  rivals  exit  the  market.  Generally,  when  a  firm  adopts  a  predatory  pricing  strategy  it  sets  price  below  some  measure  of  cost.  See  CARLTON  &  PERLOFF,  supra  note  147,  at  334-  339,  739.  The 
 Supreme  Court  explained  in  Matsushita  Electric  Industrial  Co.  v.  Zenith  Radio  Corp  that  the  success  of  such  [predatory]  schemes  is  inherently  uncertain:  the  short-  run  loss  is  definite,  but  the  long-  run  gain  depends  on 
 successfully  neutralizing  the  competition.  Moreover  it  is  not  enough  simply  to  achieve  monopoly  power,  as  monopoly  pricing  may  breed  quick  entry  by  new  competitors  eager  to  share  in  excess  profits.  The  success  of  any 
 predatory  scheme  depends  on  maintaining  monopoly  power  for  long  enough  both  to  recoup  the  predators  losses  and  to  harvest  some  additional  gain.  For  this  reason,  there  is  consensus  among  commentators  that  predatory 
 pricing  schemes  are  rarely  tried,  and  even  more  rarely  successful.  See  Matsushita  Electric  Industrial  Co  v.  Zenith  Radio  Corp.,  475  U.  S.  574,589  (1986)  (citing  ROBERT  BORK,  THE  ANTITRUST  PARADOX  149-  155  (1978)). 
 301  Based  on  publicly  available  information,  each  of  the  other  major  wireless  carriers  had  a  significantly  greater 
 number  of  subscribers  and  substantially  greater  revenues  than  ALLTEL.  At  the  end  of  the  first  quarter  of  2005,  (continued.) 
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 that  it  could  maintain  an  artificially  low  price  for  a  sufficient  period  of  time  to  drive  out  any  of  these  nationwide  carriers  in  this  market. 
 127.  Lamar  also  argues  that  the  loss  of  a  potential  competitor  in  this  market  would  be  further  exacerbated  by  the  approval  of  the  Sprint-  Nextel  merger.  302  Both  Sprint  and  Nextel  have  network 
 coverage  within  this  CMA,  and  the  Sprint-  Nextel  transaction  may  affect  the  mobile  telephony  services  structure  and  conduct  in  this  market.  However,  we  find  it  unlikely  that  the  Sprint-  Nextel  transaction 
 would  result  in  competitive  harm  in  the  markets  where  both  ALLTEL  and  WWC  currently  provide  service,  because  of  Sprint  and  Nextels  small  market  shares  in  these  markets.  Furthermore,  we  find  that 
 this  argument  is  more  appropriately  considered  in  the  ongoing  Sprint-  Nextel  proceeding.  303 
 128.  Finally,  Lamar  suggests  that  the  Commission  require  ALLTEL  to  divest  10  megahertz  of  spectrum  in  the  Texas  7-  Fannin  market,  because  it  would  be  in  the  public  interest  and  would  prevent  harm 
 to  Lamar  by  making  spectrum  available  to  strengthen  an  incumbent  competitor  or  to  allow  a  new  entrant  into  the  market.  304  As  discussed  above,  our  case-  by-  case  analysis  did  not  indicate  that  this  transaction 
 would  result  in  competitive  harms  in  CMA658  Texas  7-  Fannin,  and  on  balance  the  transaction  is  in  the  public  interest.  Therefore,  we  reject  Lamar  County  Cellulars  request  for  a  10  megahertz  divestiture  in 
 this  market. 
 129.  Lamar  and  RTG  claim  that  the  Applicants  have  not  provided  sufficient  information  for  the  Commission  or  interested  parties  to  conduct  a  case-  by-  case  analysis  of  the  competitive  effects  of  this 
 transaction.  They  claim  that  ALLTEL  did  not  disclose  spectrum  aggregation  in  markets  where  ALLTEL  would  hold  less  than  a  10  percent  ownership  interest  in  a  license.  305  Lamar  County  Cellular  and  RTG 
 request  that  the  Commission  require  the  Applicants  to  provide  information  on  licenses  where  they  hold  less  than  a  10  percent  interest  or  deny  the  Applications.  306  They  further  argue  that,  if  the  Commission 
 requests  the  additional  information,  there  should  be  a  new  Public  Notice  period  for  these  Applications.  307 
 130.  The  Commission  issued  an  interrogatory  request  that  both  ALLTEL  and  WWC  provide  a  list  of  entities  in  which  they  hold  a  10  percent  or  less  interest.  308  Both  ALLTEL  and  WWC  responded  to  this 
 (Continued  from  previous  page)  Cingular  had  50.4  million  subs  and  revenues  of  $8.2  billion.  See  Cingular  Wireless  LLC,  Form  10-  Q,  at  1,  22  (filed 
 May  4,  2005).  Nextel  had  15.5  million  subs  and  revenues  of  $3.6  billion.  See  Nextel  Communications  Inc.,  Form  10-  Q,  at  4,  16  (filed  May  10,  2005).  Sprint  had  18.3  million  subs  and  revenues  of  $3.9  billion.  See  Sprint  Corp., 
 Form  10-  Q,  at  27-  28  (filed  May  9,  2005);  Sprint  Investor  Update  1Q  2005,  at  1-  2  (April  20,  2005),  available  at  http://  www.  sprint.  com/  sprint/  ir/  fn/  qe/  1q05.pdf  (last  visited  June  2,  2005).  T-  Mobile  had  over  18  million  subs  and 
 revenues  of  $3.  4  billion.  See  T-  Mobile  USA  Reports  First  Quarter  2005  Results,  Press  Release,  at  2,  3,  available  at  http://  www.  t-  mobile.  com/  company/  investors/  financial_  releases/  2005_  Q1.  pdf  (last  visited  June  2,  2005).  Verizon 
 had  45.  5  million  subs  and  revenues  of  $7.  4  billion.  See  Cellco  Partnership,  Form  10-  Q,  at  1,  8  (filed  May  9,  2005).  Combining  ALLTELs  and  WWCs  subscribers  and  revenues  from  the  first  quarter  2005  yields  10.2  million 
 subscribers  and  revenues  of  $1.  9  billion.  See  ALLTEL  Communications  Corporation,  Form  10-  Q,  at  19  (filed  May  5,  2005);  WWC  10-  Q  at  3,  22. 
 302  Lamar  Reply  at  2. 
 303  Applications  of  Nextel  Communications,  Inc.  and  Sprint  Corporation  For  Consent  to  Transfer  Control  of 
 Licenses  and  Authorizations,  WT  Docket  No.  05-  63.  304 
 Lamar  Reply  at  4.  305 
 Lamar  Petition  at  4;  RTG  Petition  at  4.  306 
 Lamar  Petition  at  5;  RTG  Petition  at  5.  307 
 Lamar  Petition  at  5;  RTG  Petition  at  5.  308 
 See  Information  Request  at  4  (question  II.  16). 
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 interrogatory  request  on  March  15,  2005.  309  Their  response  to  the  request  occurred  13  days  prior  to  the  end  of  the  pleading  cycle.  310  Further,  this  docket  is  permit-  but-  disclose  and  parties  to  this  proceeding 
 could  have  gained  access  to  this  information  and  subsequently  provided  analysis  of  any  competitive  harms  that  may  arise  from  ownership  interest  by  these  firms  of  less  than  10  percent.  311  Further,  the 
 interrogatory  response  was  provided  in  a  sufficiently  timely  manner  that  enabled  staff  to  incorporate  this  information  in  order  to  determine  whether  on  balance  this  transaction  is  in  the  public  interest.  Therefore, 
 we  deny  Lamars  and  RTGs  request  to  place  the  Applications  on  a  second  Public  Notice  after  receiving  this  ownership  information. 
 131.  Finally,  Lamar  and  RTG  claim  that  the  Applicants  transfer  Application  is  incomplete,  based  on  ALLTELs  statement  in  the  application  that  some  licenses  may  have  been  inadvertently  omitted, 
 and  argue  that  these  licenses  should  be  included  in  the  Commissions  approval.  312  We  find  that  the  Applicants  statement  reflects  a  housekeeping  request  related  to  ancillary  non-  CMRS  licenses.  If  CMRS 
 licenses  were  inadvertently  omitted,  they  would  be  subject  to  a  separate  review.  The  Commission  has  no  reason  to  believe  there  will  be  any  such  licenses. 
 C.  Public  Interest  Benefits 
 1.  Introduction 
 132.  In  addition  to  assessing  the  potential  competitive  harms  of  the  proposed  transaction,  we  also  consider  whether  the  combination  of  these  companies  wireless  operations  is  likely  to  generate 
 verifiable,  merger-  specific  public  interest  benefits.  313  In  doing  so,  we  ask  whether  the  combined  entity  would  be  able,  and  would  be  likely,  to  pursue  business  strategies  resulting  in  demonstrable  and  verifiable 
 benefits  to  consumers  that  could  not  be  pursued  but  for  the  combination.  314 
 133.  The  Applicants  claim  that  a  number  of  public  interest  benefits  would  result  from  this  transaction.  They  contend  that  the  proposed  transaction  would  strengthen  ALLTEL  as  a  competitor  in  the 
 wireless  telecommunications  marketplace.  First,  the  Applicants  note  that,  although  post-  transaction,  ALLTEL  would  not  be  a  nationwide  provider  of  telecommunications  services,  it  would  expand  its 
 wireless  footprint  into  nine  states.  315  Second,  the  Applicants  maintain  that  the  combined  entity  would  achieve  economies  of  scale  and  scope  allowing  ALLTEL  to  more  effectively  compete  against  the 
 nationwide  carriers.  316  Third,  the  increased  resources  would  enable  ALLTEL  to  deploy  advanced  wireless  services  in  rural  areas  more  rapidly  than  either  existing  company  currently  has  or  could  achieve 
 on  its  own.  317  Fourth,  the  merger  would  create  a  business  base  broad  enough  for  ALLTEL  to  consider  the 
 309  See  March  15,  2005  Response  to  Information  Request  at  1. 
 310  See  Comment  Public  Notice,  20  FCC  Rcd.  2337. 
 311  See  id. 
 312  Lamar  Petition  at  4  (citing  Application,  Exhibit  1  at  19);  RTG  Petition  at  4  (same). 
 313  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21599    201;  Bell  Atlantic-  GTE  Order,  15  FCC  Rcd. 
 at  14130    209;  Applications  of  Ameritech  Corp.,  Transferor,  and  SBC  Communications  Inc.,  Transferee,  For  Consent  to  Transfer  of  Control,  14  FCC  Rcd.  14712,  14825    256  (1999)  (  SBC-  Ameritech  Order);  WorldCom-MCI 
 Order,  13  FCC  Rcd.  at  18134-  35    194.  314 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21599    201.  315 
 See  Application,  Exhibit  1  at  3.  316 
 Id.  at  4.  317 
 Id. 
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 deployment  of  additional  technologies  that  would  expand  the  availability  of  automatic  roaming  agreements  in  rural  areas.  318  Furthermore,  commenters  have  raised  public  safety  and  homeland  security 
 improvements  as  other  possible  public  interest  benefits.  319 
 134.  As  discussed  below,  we  find  that  the  proposed  transaction  is  likely  to  result  in  some  merger-  specific  public  interest  benefits.  We  reach  this  conclusion  recognizing  that  many  of  these  benefits 
 may  be  challenging  to  achieve  in  the  near  future  because  of  sizable  technological  and  financial  requirements.  As  a  result,  it  is  difficult  for  us  to  quantify  very  precisely  either  the  magnitude  of  or  the 
 time  horizon  in  which  these  benefits  will  be  realized. 
 2.  Analytical  Framework 
 135.  The  Commission  has  recognized  that  [  e]  fficiencies  generated  through  a  merger  can  mitigate  competitive  harms  if  such  efficiencies  enhance  the  merged  firms  ability  and  incentive  to 
 compete  and  therefore  result  in  lower  prices,  improved  quality,  enhanced  service  or  new  products.  320  Under  Commission  precedent,  however,  the  Applicants  bear  the  burden  of  demonstrating  that  the 
 potential  public  interest  benefits  of  the  proposed  transfer  outweigh  the  potential  public  interest  harms.  321 
 136.  There  are  several  criteria  the  Commission  applies  in  deciding  whether  a  claimed  benefit  should  be  considered  and  weighed  against  potential  harms.  First,  the  claimed  benefit  must  be  transaction- 
 or  merger-  specific.  This  means  that  the  claimed  benefit  must  be  likely  to  be  accomplished  as  a  result  of  the  merger  but  unlikely  to  be  realized  by  other  means  that  entail  fewer  anticompetitive  effects.  322 
 Second,  the  claimed  benefit  must  be  verifiable.  Because  much  of  the  information  relating  to  the  potential  benefits  of  a  merger  is  in  the  sole  possession  of  the  Applicants,  they  are  required  to  provide  sufficient 
 evidence  supporting  each  benefit  claim  so  that  the  Commission  can  verify  the  likelihood  and  magnitude  of  the  claimed  benefit.  323  In  addition,  as  the  Commission  has  noted,  the  magnitude  of  benefits  must  be 
 318  Id. 
 319  See  discussion  infra  Part  IV.  D.  8. 
 320  See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21599    204;  EchoStar-  DirecTV  HDO,  17  FCC  Rcd. 
 at  20630    188;  Applications  of  NYNEX  Corporation,  Transferor,  and  Bell  Atlantic  Corporation,  Transferee,  for  Consent  to  Transfer  Control,  12  FCC  Rcd.  19885,  20063    158  (1997)  (  Bell  Atlantic-  NYNEX  Order);  see  also 
 DOJ/  FTC  Merger  Guidelines    4.  321 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21599    204;  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at  20630    188;  see  also  Bell  Atlantic-  NYNEX  Order,  12  FCC  Rcd.  at  20063    157;  SBC-  Ameritech  Order,  14  FCC 
 Rcd.  at  14825    256.  322 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21599    205;  accord  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at  20630    189;  Bell  Atlantic-  NYNEX  Order,  12  FCC  Rcd.  at  20063    158  (  Pro-  competitive  efficiencies  include  only 
 those  efficiencies  that  are  merger-  specific,  i.  e.,  that  would  not  be  achievable  but  for  the  proposed  merger.  Efficiencies  that  can  be  achieved  through  means  less  harmful  to  competition  than  the  proposed  merger  .  .  .  cannot  be 
 considered  to  be  true  pro-  competitive  benefits  of  the  merger.);  SBC-  Ameritech  Order,  14  FCC  Rcd.  at  14825    255  (  Public  interest  benefits  also  include  any  cost  saving  efficiencies  arising  from  the  merger  if  such  efficiencies  are 
 achievable  only  as  a  result  of  the  merger.  .  .  .);  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  from  Comcast  Corporation  and  AT&  T  Corp.,  Transferors,  to  AT&  T  Comcast  Corporation,  Transferee,  MB  Docket 
 No.  02-  70,  Memorandum  Opinion  and  Order,  17  FCC  Rcd.  23246,  23313    173  (2002)  (Commission  considers  whether  benefits  are  merger-  specific)  (  AT&  T-  Comcast  Order).  Cf.  DOJ/  FTC  Merger  Guidelines    4. 
 323  See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205;  see  also  EchoStar-  DirecTV  HDO,  17  FCC 
 Rcd.  at  20630    190;  Bell  Atlantic-  NYNEX  Order,  12  FCC  Rcd.  at  20063    157  (  These  pro-  competitive  benefits  include  any  efficiencies  arising  from  the  transaction  if  such  efficiencies  .  .  .  are  sufficiently  likely  and  verifiable.  .  . 
 .);  AT&  T-  Comcast  Order,  17  FCC  Rcd.  at  23313    173  (Commission  considers  whether  benefits  are  verifiable);  (continued.) 
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 calculated  net  of  the  cost  of  achieving  them.  324  Furthermore,  speculative  benefits  that  cannot  be  verified  will  be  discounted  or  dismissed.  Thus,  as  the  Commission  explained  in  the  Cingular-  AT&  T  Wireless 
 Order,  benefits  that  are  to  occur  only  in  the  distant  future  may  be  discounted  or  dismissed  because,  among  other  things,  predictions  about  the  more  distant  future  are  inherently  more  speculative  than 
 predictions  about  events  that  are  expected  to  occur  closer  to  the  present.  325  Third,  the  Commission  has  stated  that  it  will  more  likely  find  marginal  cost  reductions  to  be  cognizable  than  reductions  in  fixed 
 cost.  326  The  Commission  has  justified  this  criterion  on  the  ground  that,  in  general,  reductions  in  marginal  cost  are  more  likely  to  result  in  lower  prices  for  consumers.  327 
 137.  Finally,  the  Commission  applies  a  sliding  scale  approach  to  evaluating  benefit  claims.  Under  this  sliding  scale  approach,  where  potential  harms  appear  both  substantial  and  likely,  the 
 Applicants  demonstration  of  claimed  benefits  also  must  reveal  a  higher  degree  of  magnitude  and  likelihood  than  we  would  otherwise  demand.  328 
 3.  Increased  Footprint 
 138.  The  Applicants  state  that  this  transaction  would  expand  the  companys  wireless  footprint  into  nine  states.  329  The  Applicants  and  some  commenters  assert  that  this  expansion  would  allow  ALLTEL 
 to  be  a  more  effective  competitor  with  the  nationwide  CMRS  providers.  330  Specifically,  the  Applicants  (Continued  from  previous  page) 
 SBC-  Ameritech  Order,  14  FCC  Rcd.  at  14825    255;  DOJ/  FTC  Merger  Guidelines    4  ([  T]  he  merging  firms  must  substantiate  efficiency  claims  so  that  the  Agency  can  verify  by  reasonable  means  the  likelihood  and  magnitude  of 
 each  asserted  efficiency,  how  and  when  each  would  be  achieved  (and  any  costs  of  doing  so),  [and]  how  each  would  enhance  the  merged  firm's  ability  to  compete.  .  .  .). 
 324  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205;  accord  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at 
 20630    190.  325 
 Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205  (citing  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at  20630    190). 
 326  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205;  accord  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at 
 20630    190.  See  also  DOJ/  FTC  Merger  Guidelines    4.  327 
 See  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205;  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at  20630    191;  see  also  DOJ/  FTC  Merger  Guidelines    4. 
 328  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21600    205;  accord  EchoStar-  DirecTV  HDO,  17  FCC  Rcd.  at 
 20630    192  (citing  SBC-  Ameritech  Order,  14  FCC  Rcd.  at  14825).  Cf.  DOJ/  FTC  Merger  Guidelines    4  (  The  greater  the  potential  adverse  competitive  effect  of  a  merger  .  .  .  the  greater  must  be  cognizable  efficiencies  in  order 
 for  the  Agency  to  conclude  that  the  merger  will  not  have  an  anticompetitive  effect  in  the  relevant  market.  When  the  potential  adverse  competitive  effect  of  a  merger  is  likely  to  be  particularly  large,  extraordinarily  great  cognizable 
 efficiencies  would  be  necessary  to  prevent  the  merger  from  being  anticompetitive.).  329 
 See  Application,  Exhibit  1  at  3-  4;  Joint  Opposition  at  5.  330 
 See  Application,  Exhibit  1  at  5;  see  also  Letter  from  Mike  Beebe,  Attorney  General,  State  of  Arkansas,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Arkansas  Attorney 
 General  Beebe  Comment);  Letter  from  Jay  Scott  Emler,  State  Senator,  State  of  Kansas,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Kansas  State  Senator  Emler 
 Comment);  Letter  from  George  M.  Israel,  III,  President  and  CEO,  Georgia  Chamber  of  Commerce,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Georgia  Chamber  of 
 Commerce  Comment);  Letter  from  Jack  Fleischauer,  Jr.,  Regional  CEO,  Regions  Financial  Corp.,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Regions  Financial  Corp. 
 Comment);  Letter  from  Tony  Rogers,  Director,  Rosebud  Sioux  Tribe  Utility  Commission,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Rosebud  Sioux  Tribe  Utility 
 Commission  Comment);  Letter  from  Ken  W.  Davis,  Chairman,  Turtle  Mountain  Band  of  Chippewa  Indians,  to  (continued.) 
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 state  that,  by  combining  the  two  networks  and  infrastructure,  roaming  costs  would  be  eliminated  in  many  areas.  331  According  to  the  Applicants  and  some  commenters,  the  expanded  footprint  and  subscriber  base 
 would  also  allow  ALLTEL  to  provide  more  expansive  in-  network  calling  to  subscribers,  because  the  number  and  location  of  ALLTEL  customers  would  increase.  This  in  turn  will  afford  ALLTEL 
 subscribers  the  ability  to  call  a  greater  number  of  ALLTEL  subscribers  for  free.  332 
 139.  Currently,  ALLTEL  provides  Cellular  and  PCS  service  to  rural  areas  and  mid-  sized  cities  in  24  states.  333  WWC  provides  similar  Cellular  and  PCS  service  to  rural  areas  and  mid-  sized  cities  in  19 
 states.  334  Post-  transaction,  the  footprint  of  the  combined  company  would  cover  33  states.  Specifically,  the  proposed  merger  would  allow  ALLTEL  to  expand  its  existing  wireless  footprint  into  nine  additional 
 states    California,  Idaho,  Minnesota,  Montana,  Nevada,  North  Dakota,  South  Dakota,  Utah,  and  Wyoming    and  expand  its  existing  wireless  operations  in  Arizona,  Colorado,  New  Mexico,  and  Texas.  335 
 Furthermore,  ALLTEL  and  WWC  currently  have  a  licensed  service  area  encompassing  approximately  62.5  and  11.5  million  people,  respectively;  336  the  combined  company,  however,  would  have  a  licensed 
 service  area  of  approximately  72  million  people.  337 
 140.  The  Commission  has  previously  noted  the  consumer  benefits  that  flow  from  expanded  footprints.  338  With  a  larger  footprint,  a  carrier  can  offer  competitive  service  to  more  consumers  across  the 
 (Continued  from  previous  page)  John  Muleta,  Chief,  Wireless  Telecommunications  Bureau,  and  Marlene  Dortch,  Secretary,  Federal 
 Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Turtle  Mountain  Band  of  Chippewa  Indians  Comment);  Letter  from  John  R.  Marks,  III,  Mayor,  City  of  Tallahassee,  to  Marlene  Dortch,  Secretary,  Federal  Communications 
 Commission,  at  1  (filed  Mar.  14,  2005)  (  Mayor  Marks  of  Tallahassee  Comment);  Letter  from  Cindy  K.  Johnson,  President,  Grand  Island  Area  Chamber  of  Commerce,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications 
 Commission,  at  1  (filed  Mar.  24,  2005)  (  Grand  Island  Area  Chamber  of  Commerce  Comment);  Letter  from  Thomas  Hastings,  President,  Hastings  Area  Chamber  of  Commerce,  to  Marlene  H.  Dortch,  Secretary,  Federal 
 Communications  Commission,  at  1  (filed  Mar.  24,  2005)  (  Hastings  Area  Chamber  of  Commerce  Comment);  Letter  from  Doran  Dee  Haussler,  Executive  Director,  Hastings  Economic  Development  Corporation,  to  Marlene 
 H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  24,  2005)  (  Hastings  Economic  Development  Corporation  Comment);  Letter  from  Tom  R.  Tunnell,  President,  Kansas  Grain  &  Feed  Association, 
 to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  24,  2005)  (  Kansas  Grain  &  Feed  Assoc.  Comment);  Letter  from  Dave  Heinman,  Governor,  State  of  Nebraska,  to  Marlene  H.  Dortch, 
 Secretary,  Federal  Communications  Commission,  at  1  (filed  Apr.  19,  2005)  (  Governor  Heineman  of  Nebraska  Comment). 
 331  Application,  Exhibit  1  at  5;  Joint  Opposition  at  5. 
 332  See  Application,  Exhibit  1  at  5;  see  also  Regions  Financial  Corp.  Comment  at  1,  Rosebud  Sioux  Tribe  Utility 
 Commission  Comment  at  1;  Turtle  Mountain  Band  of  Chippewa  Indians  Comment  at  1;  Grand  Island  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic 
 Development  Corporation  Comment  at  1;  Kansas  Grain  &  Feed  Assoc.  Comment  at  1.  333 
 ALLTEL  states  that  they  provide  PCS  and  Cellular  service  in  24  states;  however,  they  hold  a  10  percent  or  greater  interest  ownership  interest  in  PCS  and  Cellular  licenses  in  28  states.  Compare  Application,  Exhibit  1,  at  4, 
 with  March  15,  2005  Response  to  Information  Request  at  3.  See  also  description  of  ALLTEL  supra  Part  II.  A.  1.  334 
 Application,  Exhibit  1  at  4.  335 
 Id.  336 
 See  discussion  supra  paras.  4,  7.  337 
 Application,  Exhibit  1  at  4-  5.  338 
 See,  e.  g.,  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21604    217;  SBC-  BellSouth  Order,  15  FCC  Rcd.  at  25480    48. 
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 country.  In  addition,  its  customers  may  enjoy  enhanced  service  and/  or  lower  prices  because  of  factors  such  as  the  wider  area  in  which  the  carriers  full  handset  functionality  is  operative  and  the  carriers 
 lessened  reliance  on  roaming  agreements  to  fill  out  its  coverage.  339 
 4.  Improvements  in  Service  Quality 
 141.  The  Applicants,  along  with  some  commenters,  assert  that  improvements  in  the  combined  companys  network  would  allow  ALLTEL  to  offer  its  consumers  a  higher  quality  product  and  greater 
 services.  340  They  state  that,  in  areas  where  the  Applicants  networks  overlap,  the  combination  of  networks  would  reduce  dead  spots  and  improve  in-  market  coverage.  341  Because  the  proposed  transaction 
 involves  the  integration  of  existing  networks,  the  Applicants  claim  that  improvements  would  occur  in  the  near  term  because  of  the  ability  to  integrate  established  and  technically  compatible  operating 
 networks.  342  Specifically,  the  Applicants  state  that  ALLTEL  and  WWC  operate  separate  systems  and  generally  do  not  collocate  on  the  same  facilities,  so  the  coverage  area  of  both  systems  is  not  identical.  343 
 The  Applicants  thus  conclude  that  the  combination  of  the  different  footprints  would  eliminate  many  of  the  dead  spots  that  existed  in  each  network  on  a  stand-  alone  basis.  344  Furthermore,  the  Applicants  have 
 identified  areas  where  WWCs  network  provides  superior  coverage  to  ALLTELs  network.  345  The  Applicants  state  that  all  ALLTEL  handsets  have  CDMA  and  analog  capabilities,  so  customers  should 
 experience  improved  coverage  even  if  the  Western  Wireless  network  is  analog  only.  346  Moreover,  the  Applicants  note  that  ALLTEL  sells  tri-  mode  handsets,  capable  of  communications  on  both  800  MHz  and 
 1.9  GHz  networks;  therefore,  customers  of  the  combined  company  would  be  able  to  utilize  the  networks 
 339  Cingular-  AT&  T  Wireless  Order,  19  FCC  Rcd.  at  21604    217. 
 340  See  Declaration  of  Jeffrey  R.  Gardner,  Executive  Vice  President  and  Chief  Financial  Officer,  ALLTEL 
 Corporation,  at  21  (  Declaration  of  Gardner),  available  at  Application,  Exhibit  1,  at  Attachment  1;  see  also  Arkansas  Attorney  General  Beebe  Comment  at  1;  Letter  from  Richard  J.  Hobbs,  Executive  Vice  President, 
 Associated  General  Contractors  of  Ohio,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Associated  General  Contractors  of  Ohio  Comment);  Letter  from  Senator  Tom  Baker, 
 Chairman,  Committee  on  Transportation  &  Telecommunications,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Nebraska  State  Senator  Baker  Comment);  Letter  from 
 James  B.  Black,  Speaker,  North  Carolina  House  of  Representatives,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Speaker  Black  of  the  North  Carolina  House  Comment); 
 Kansas  State  Senator  Emler  Comment  at  2;  Letter  from  Frank  P.  DeTillio,  President,  Lorain  County  Chamber  of  Commerce,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005) 
 (  Lorain  County  Chamber  of  Commerce  Comment);  Letter  from  Representative  Danny  F.  McComas,  North  Carolina  House  of  Representatives,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1 
 (filed  Mar.  9,  2005)  (  North  Carolina  Representative  McComas  Comment);  Letter  from  Keith  R.  Olsen,  President,  Nebraska  Farm  Bureau  Federation,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed 
 Mar.  9,  2005)  (  Nebraska  Farm  Bureau  Federation  Comment);  Rosebud  Sioux  Tribe  Utility  Commission  Comment  at  1;  Turtle  Mountain  Band  of  Chippewa  Indians  Comment  at  1;  Letter  from  Chris  Holman,  Publisher,  The  Greater 
 Lansing  Business  Monthly,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  21,  2005)  (  The  Greater  Lansing  Business  Monthly  Comment);  Governor  Heineman  of  Nebraska  Comment  at  1. 
 341  Declaration  of  Gardner  at  2. 
 342  Id. 
 343  See  March  15,  2005  Response  to  Information  Request  at  18. 
 344  Id. 
 345  See  id.  at  18-  19. 
 346  Id.  at  19. 
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 of  both  companies,  which  would  result  in  coverage  advantages  over  ALLTELs  existing  network.  347  The  Applicants  maintain  that  theses  synergies  would  not  be  available  to  the  Applicants  separately,  even  if  they 
 were  able  to  purchase  spectrum,  because  new  spectrum  would  require  the  acquisition  of  tower  sites  and  equipment,  which  would  significantly  delay  any  improvements.  348 
 142.  Additionally,  ALLTEL  states  that  the  proposed  transaction  would  allow  the  combined  company  to  increase  product  development  beyond  what  each  company  would  be  able  to  accomplish  on  its 
 own.  349  ALLTEL  notes  that  implementing  new  products,  such  as  its  Touch2Talk  feature,  is  easier  for  a  larger  company,  because  the  expense  is  applied  against  a  larger  customer  base.  350  [REDACTED].  351 
 [REDACTED].  352  ALLTEL  concludes  that  the  proposed  transaction  would  reduce  delays  associated  with  rolling  out  new  product  offerings  in  the  future.  353 
 5.  Promotion  of  Next-  Generation  Services 
 143.  The  Applicants  argue  that  deployment  of  advanced  services  in  rural  areas  generally  lags  behind  urban  areas,  because  larger  carriers  focus  their  attention  on  urban  and  suburban  areas  where  the 
 demand  for  such  services  is  highest  and  regional  carriers  lack  the  economies  to  deploy  advanced  services.  354  The  Applicants,  along  with  some  commenters,  assert  that  the  proposed  transaction  would 
 promote  the  deployment  of  advanced  services  in  rural  areas  more  quickly  than  would  be  possible  by  the  Applicants  individually.  355  Specifically,  the  Applicants  state  that  the  incentive  for  deployment  is 
 enhanced  by  the  increased  purchasing  power  and  resources  of  the  combined  company.  356  For  instance,  the  Applicants  state  while  the  nationwide  carriers  already  have  begun  rolling  out  advanced  services, 
 ALLTEL  will  commence  launching  EV-  DO  in  select  markets  in  2005,  357  and  WWC  has  not  announced  specific  deployment  plans  for  EV-  DO  or  UMTS.  358  ALLTEL  states  that  it  has  decided  to  implement  EV- 
 347  See  id.  at  19. 
 348  Declaration  of  Gardner  at  3. 
 349  March  15,  2005  Response  to  Information  Request  at  5;  Joint  Opposition  at  5. 
 350  See  March  15,  2005  Response  to  Information  Request  at  5. 
 351  Id. 
 352  Id. 
 353  Id. 
 354  Application,  Exhibit  1  at  6-  7. 
 355  See  id.;  Joint  Opposition  at  5;  see  also  Kansas  State  Senator  Emler  Comment  at  1;  Georgia  Chamber  of 
 Commerce  Comment  at  1;  Letter  from  Frank  Landis,  Commissioner,  State  of  Nebraska  Public  Service  Commission,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Nebraska  Public 
 Service  Commission);  Nebraska  Farm  Bureau  Federation  Comment  at  1;  Rosebud  Sioux  Tribe  Utility  Commission  Comment  at  1;  Mayor  Marks  of  Tallahassee  Comment  at  1;  Grand  Island  Area  Chamber  of  Commerce  Comment  at 
 1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic  Development  Corporation  Comment  at  1;  Kansas  Grain  &  Feed  Assoc.  Comment  at  1;  Governor  Heineman  of  Nebraska  Comment  at  1.  ALLTEL  states 
 that,  [  a]  lthough  [it]  has  not  quantified  how  much  faster  the  combined  company  will  be  able  to  deploy  advanced  services,  ALLTEL  expects  the  combined  company  to  have  the  scale  to  deploy  faster  than  either  company  could 
 afford  to  individually.  March  15,  2005  Response  to  Information  Request  at  5.  356 
 Application,  Exhibit  1  at  7.  357 
 Id.  ALLTEL  states  that  it  is  launching  EV-  DO  in  the  following  metro  areas  within  the  first  quarter  of  2005:  [REDACTED].  See  March  15,  2005  Response  to  Information  Request  at  8.  [REDACTED].  See  id.  at  8-  9. 
 358  March  15,  2005  Response  to  Information  Request  at  5.  [REDACTED].  See  id  at  5,  9. 
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 DO  in  its  larger  markets  and  anticipates  incorporating  similar  WWC  markets  into  this  strategy.  359  Accordingly,  the  Applicants  claim,  subscribers  in  some  WWC  markets  would  have  access  to  advanced 
 services  sooner  as  a  result  of  the  proposed  merger.  360 
 6.  Economies  of  Scale  and  Operating  Synergies 
 144.  The  Applicants  and  some  commenters  allege  that  the  substantial  synergies  produced  as  a  result  of  the  proposed  transaction  would  allow  ALLTEL  to  be  a  more  effective  competitor  with  the 
 nationwide  carriers.  361  The  Applicants  assert  that  the  proposed  transaction  would  create  operational  synergies  with  a  net  present  value  of  more  than  $600  million.  362  The  Applicants  state  that  these  savings 
 are  the  result  of  reductions  in  operational  expenses,  costs  per  gross  additional  subscriber,  and  maintenance/  administrative  costs.  363  Additionally,  the  Applicants  assert  that  ALLTELs  acquisition  of 
 WWC  will  result  in  substantial  interest  savings.  364  Specifically,  the  savings  would  come  from  a  number  of  factors,  such  as  the  diminished  need  for  tower  additions,  consolidating  advertising  and  marketing  costs, 
 elimination  of  duplicative  functions,  and  the  refinancing  of  WWCs  debt  at  lower  interest  rates  that  are  available  to  ALLTEL.  365 
 145.  The  Applicants  stress  that  their  use  of  the  same  CDMA  technology  would  facilitate  ALLTELs  ability  to  integrate  the  two  networks  expeditiously  and  with  little  disruption  to  subscribers.  366 
 The  Applicants  highlight  that  ALLTEL  is  experienced  with  integrating  newly-  acquired  companies  into  its  network  while  achieving  substantial  synergies  and  economies  of  scale.  367 
 146.  The  Applicants  also  allege  that  the  proposed  transaction  would  result  in  the  reduction  in  costs  associated  with  the  purchase  of  network  equipment,  because  equipment  prices  fluctuate  based  on 
 volume.  368  The  Applicants  state  that  the  combined  company  would  be  able  to  purchase  equipment  in  larger  quantities  than  either  company  individually,  reducing  the  costs  associated  with  network 
 359  Id.  at  5-  6. 
 360  See  id. 
 361  See  Application,  Exhibit  1  at  5;  Declaration  of  Gardner  at  3;  see  also  Associated  General  Contractors  of  Ohio 
 Comment  at  1;  Kansas  State  Senator  Emler  at  1;  Georgia  Chamber  of  Commerce  Comment  at  1;  Letter  from  L.  Lynn  Rex,  Executive  Director,  League  of  Nebraska  Municipalities  to  Marlene  Dortch,  Secretary,  Federal 
 Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  League  of  Nebraska  Municipalities  Comment);  Nebraska  Farm  Bureau  Federation  Comment  at  1;  Regions  Financial  Corp.  Comment  at  1;  Rosebud  Sioux  Tribe  Utility 
 Commission  Comment  at  1;  Turtle  Mountain  Band  of  Chippewa  Indians  Comment  at  1;  Mayor  Marks  of  Tallahassee  Comment  at  1;  The  Greater  Lansing  Business  Monthly  Comment  at  1;  Grand  Island  Area  Chamber  of 
 Commerce  Comment  at  1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic  Development  Corporation  Comment  at  1;  Kansas  Grain  &  Feed  Assoc.  Comment  at  1. 
 362  Application,  Exhibit  1  at  5  (citing  Declaration  of  Gardner  at  3). 
 363  See  Declaration  of  Gardner  at  4. 
 364  See  id.  at  5. 
 365  Id.  at  4-  5. 
 366  Application,  Exhibit  1  at  5. 
 367  Id.  at  6. 
 368  Id. 
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 equipment.  369  Some  commenters  also  support  ALLTELs  assertion  that  the  increased  bargaining  power  would  aid  its  ability  to  obtain  the  latest  technology.  370 
 147.  The  Applicants  and  commenters  further  allege  that  the  combined  company  would  be  able  to  provide  a  broader  selection  of  customer  equipment,  at  more  competitive  prices,  and  containing  more 
 features  and  services  demanded  by  customers.  371  The  Applicants  state  that  ALLTEL,  [REDACTED],  372  has  developed  relationships  with  six  of  the  major  CDMA  mobile  phone  Original  Equipment 
 Manufacturers  (  OEMs).  373  The  Applicants  explain  that  such  a  direct  relationship  with  OEMs  provides  a  carrier  the  ability  to  negotiate  software  customization,  lower  phone  pricing  and  other  incentives,  such 
 as  volume  incentive  rebates,  price  protection  on  inventory,  [and]  product  rebates.  374  The  Applicants  further  explain  that  ALLTEL  [REDACTED].  375  [REDACTED].  376  [REDACTED].  377  Thus,  the  merger 
 would  extend  the  benefits  obtained  by  ALLTEL  to  WWCs  markets  and  customers  and  increase  the  benefits  received  by  the  combined  company.  378 
 148.  The  Applicants  argue  that,  not  only  would  the  combined  company  be  able  to  purchase  handsets  with  more  features  and  services  and  at  lower  prices,  the  combined  companys  increased 
 purchasing  power  would  result  in  a  greater  willingness  of  handset  manufacturers  to  customize  handsets  specific  to  ALLTELs  service  offerings.  379  The  Applicants  further  state  that  such  customizations  often 
 involve  handset  software  enabling  user  authentication  for  data  networks,  more  accurate  roaming  indicators,  more  efficient  Mobile  Web  usage,  and  overall  infrastructure  integration.  380  As  an  example,  the 
 Applicants  discuss  how  ALLTEL  collaborated  with  OEMs  to  develop  customized  handsets  for  its  Touch2Talk  product  offering.  381  Specifically,  ALLTEL  provides  documentation  [REDACTED].  382 
 Likewise,  ALLTEL  is  in  the  process  [REDACTED].  383  [REDACTED].  384  [REDACTED].  385  The 
 369  Id. 
 370  See  Nebraska  Public  Service  Commission  at  1;  Rosebud  Sioux  Tribe  Utility  Commission  Comment  at  1;  Mayor 
 Marks  of  Tallahassee  Comment  at  1;  Grand  Island  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic  Development  Corporation  Comment  at  1;  Kansas  Grain 
 &  Feed  Assoc.  Comment  at  1.  371 
 See  Application,  Exhibit  1  at  6;  Declaration  of  Gardner  at  3;  see  also  Rosebud  Sioux  Tribe  Utility  Commission  Comment  at  1;  Mayor  Marks  of  Tallahassee  Comment  at  1;  Grand  Island  Area  Chamber  of  Commerce  Comment  at 
 1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic  Development  Corporation  Comment  at  1;  Kansas  Grain  &  Feed  Assoc.  Comment  at  1. 
 372  March  15,  2005  Response  to  Information  Request  at  7. 
 373  Id. 
 374  Id. 
 375  Id.  [REDACTED]. 
 376  March  15,  2005  Response  to  Information  Request  at  7.  [REDACTED].  Id. 
 377  Id. 
 378  See  id. 
 379  Application,  Exhibit  1  at  6;  March  15,  2005  Response  to  Information  Request  at  7. 
 380  March  15,  2005  Response  to  Information  Request  at  8. 
 381  See  id.  at  7-  8. 
 382  [REDACTED]. 
 383  [REDACTED] 
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 Applicants  conclude  that  [  t]  he  combination  with  WWC  will  enhance  ALLTELs  ability  to  continue  purchasing  [such]  phones  with  customizations  necessary  to  provide  an  optimum  experience  on 
 ALLTELs  networks.  386 
 149.  Finally,  the  Applicants  discuss  the  operating  synergies  achieved  by  combining  the  best  practices  developed  by  the  separate  companies.  387  The  Applicants  state  that  [  a]  s  established  regional 
 providers,  both  ALLTEL  and  WWC  have  developed  a  series  of  practices  to  efficiently  and  effectively  meet  customer  needs  and  comply  with  regulatory  mandates.  388  As  an  example,  the  applicants  cite 
 WWCs  experience  with  deployment  of  a  GSM  network  overlay  to  provide  service  to  roamers  within  their  service  areas.  389  The  engineering  experience  and  vendor  relationships  achieved  by  WWC  in 
 building  and  operating  a  GSM  network  would  enable  ALLTEL  to  determine  whether  to  create  such  roaming  opportunities  and  take  advantage  of  WWCs  established  relationships  with  GSM  vendors.  390 
 Additionally,  ALLTEL  asserts  that  it  has  experience,  through  prior  acquisitions,  of  consolidating  various  billing  operations  into  a  single  scalable  system  that  significantly  reduced  billing  costs  per  subscriber.  391 
 The  Applicants  also  suggest  that  the  proposed  transaction  would  benefit  network  operations  and  management,  purchasing,  billing,  customer  service,  and  general  and  administrative  practices.  392  The 
 Applicants  state  that  the  implementation  of  the  best  of  these  and  other  practices  from  each  company  will  inure  to  the  benefit  of  the  combined  companys  subscribers.  393 
 150.  Based  on  the  evidence  presented  by  Applicants,  we  believe  that  the  transaction  is  likely  to  enable  the  merged  entity  to  achieve  certain  economies  of  scope  and  scale  and  operating  synergies  of 
 the  type  asserted  and  that,  absent  the  transaction,  the  Applicants  individually  could  not  have  achieved.  However,  the  record  does  not  contain  sufficient  supporting  evidence  for  us  to  verify  and  quantify  the 
 claimed  savings  or  to  determine  the  extent  to  which  they  are  specific  to  this  transaction.  Thus,  we  cannot  confirm  the  total  savings  estimated  by  Applicants  and  do  not  give  significant  weight  to  them  in  our 
 balancing  of  potential  public  interest  harms  and  benefits. 
 151.  However,  we  do  recognize  one  specific  category  of  cost  savings  in  this  context.  ALLTELs  merger  with  WWC  would  reduce  its  roaming  costs  in  geographic  markets  where  ALLTEL 
 and  WWCs  service  areas  do  not  overlap,  and  the  elimination  of  roaming  agreements  in  these  markets  would  directly  benefit  those  of  its  customers  who  would  no  longer  be  charged  to  roam  in  those  areas.  394 
 (Continued  from  previous  page)  384  [REDACTED] 
 385  [REDACTED] 
 386  March  15,  2005  Response  to  Information  Request  at  8. 
 387  See  Application,  Exhibit  1  at  6. 
 388  Declaration  of  Gardner  at  2. 
 389  Application,  Exhibit  1  at  6;  Declaration  of  Gardner  at  2. 
 390  Application,  Exhibit  1  at  6;  Declaration  of  Gardner  at  2.  Documentation  provided  by  ALLTEL  demonstrates 
 [REDACTED].  391 
 Declaration  of  Gardner  at  2.  392 
 See  Application,  Exhibit  1  at  6;  see  also  Declaration  of  Gardner  at  3,  4.  393 
 Declaration  of  Gardner  at  3.  394 
 See  Application,  Exhibit  1  at  5;  see  also  League  of  Nebraska  Municipalities  Comment  at  1;  Regions  Financial  Corp.  Comment  at  1;  Turtle  Mountain  Band  of  Chippewa  Indians  Comment  at  1;  Grand  Island  Area  Chamber  of 
 Commerce  Comment  at  1;  Hastings  Area  Chamber  of  Commerce  Comment  at  1;  Hastings  Economic  Development  (continued.) 
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 Specifically,  ALLTEL  states  that  currently  its  subscribers  roam  when  they  travel  into  California,  Idaho,  Minnesota,  Montana,  Nevada,  North  Dakota,  South  Dakota,  Utah,  and  Wyoming.  395  Post-  transaction, 
 ALLTEL  would  be  able  to  provide  service  to  its  subscribers  in  portions  of  these  states  without  having  to  rely  on  roaming  arrangements.  396  We  further  recognize  that  the  cost  savings  generated  by  the  elimination 
 of  roaming  agreements  in  overlapping  markets  have  the  potential  to  benefit  ALLTELs  customers  indirectly  by  giving  ALLTEL  the  ability  and  the  incentive  to  compete  more  aggressively  with  regard  to 
 pricing,  coverage,  and  the  provision  of  advanced  data  services.  We  emphasize,  however,  that  the  realization  of  these  indirect  benefits  and  their  magnitude  will  depend  on  whether,  and  the  extent  to  which, 
 ALLTEL  passes  on  cost  savings  to  its  customers  through  lower  prices  or  product  improvements  such  as  better  voice  service  and  advanced  data  services. 
 7.  Improved  Roaming  in  Rural  Areas 
 152.  The  Applicants  assert  that  the  combined  company  would  be  a  more  attractive  roaming  partner  for  other  carriers  because  of  its  expanded  footprint,  which  would  allow  it  to  provide  other  carriers 
 with  access  to  a  far  more  expansive  rural  network  for  roaming.  397  They  state  that  the  combined  company  would  expand  opportunities  for  carriers  to  obtain  low  cost  roaming  services  and  potentially  justify  the 
 expansion  of  the  scope  of  the  free  calling  areas  available  to  subscribers.  398  Ultimately,  the  Applicants  argue,  this  may  result  in  a  roaming  partner  choosing  to  offer  its  service  at  a  lower  price.  399 
 153.  The  Applicants  further  argue  that  the  combined  companys  enhanced  ability  to  deploy  advanced  services  makes  it  a  more  attractive  roaming  partner.  400  The  Applicants  state  that  roaming 
 partners  may  want  to  enter  into  roaming  agreements  to  extend  the  geographic  area  in  which  advanced  services  are  offered  to  their  subscribers.  401 
 154.  Additionally,  the  Applicants  claim  that  the  combined  company  would  explore  ways  to  increase  roaming  opportunities  on  their  network  for  other  carriers.  402  The  Applicants  assert  that  they  have 
 entered  into  hundreds  of  roaming  agreements  and  that  these  agreements  account  for  10  percent  of  their  revenues.  403  The  Applicants  explain  that  WWC  currently  provides  service  to  its  subscribers  on  a  CDMA 
 network;  however,  WWC  has  deployed  a  GSM  overlay  solely  for  the  purpose  of  serving  roamers.  The  Applicants  note  that  WWCs  GSM  overlay  has  been  an  important  part  of  its  business  as  it  has  increased 
 WWCs  revenue  stream.  404  The  Applicants  further  allege  that  the  engineering  experience  and  vendor  relationships  obtained  by  WWC  would  be  used  by  ALLTEL  to  ascertain  whether  it  would  be  technically 
 and  economically  feasible  to  deploy  similar  overlays  that  would  permit  the  company  to  offer  roaming  to  (Continued  from  previous  page) 
 Corporation  Comment  at  1;  Kansas  Grain  &  Feed  Assoc.  Comment  at  1;  Governor  Heineman  of  Nebraska  Comment  at  1. 
 395  Application,  Exhibit  1  at  5. 
 396  Id. 
 397  See  Application,  Exhibit  1  at  8;  March  15,  2005  Response  to  Information  Request  at  10. 
 398  March  15,  2005  Response  to  Information  Request  at  10. 
 399  Id. 
 400  See  id. 
 401  Id. 
 402  See  Application,  Exhibit  1  at  8. 
 403  Id.  at  8. 
 404  See  March  15,  2005  Response  to  Information  Request  at  11. 
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 carriers  regardless  of  the  underlying  technology.  405  The  Applicants  state  that  the  merger  would  facilitate  the  development  of  a  GSM  overlay  in  ALLTELs  territory  because  ALLTEL  would  benefit  from  WWCs 
 engineering  and  planning  personnel  responsible  for  rolling  out  WWCs  GSM  overlay.  The  Applicants  conclude  that  the  proposed  transaction  has  the  potential  to  benefit  not  only  the  Applicants  existing 
 subscribers,  but  also  the  subscribers  of  other  carriers  who  would  benefit  from  the  expanded  roaming  agreements  and  services.  406 
 8.  Support  for  Homeland  Security  and  Public  Safety 
 155.  In  general,  many  commenters  believe  that  ALLTEL  and  WWC  continue  to  make  progress  in  their  E911  deployment,  and  that  the  capabilities  of  each  company  to  implement  and  improve 
 911  services  would  be  strengthened  by  this  merger  and  thus  provide  for  better  public  safety  and  encourage  competition.  407  For  example,  E911  coordinators  in  many  states  as  well  as  police  departments 
 support  the  merger,  stating  that  ALLTEL  continues  to  work  diligently  towards  meeting  its  obligations,  as  reflected  in  the  deployment  of  Wireless  Phase  II  service  with  367  Public  Safety  Answering  Points 
 (  PSAPs)  and  Wireless  Phase  I  service  with  745  PSAPs.  408  In  particular,  they  commend  ALLTELs  diligent  and  consistent  implementation  efforts  for  wireless  E911  services.  409  One  Commenter  also  notes 
 405  Application,  Exhibit  1  at  8.  See  also  supra  note  388. 
 406  See  Application,  Exhibit  1  at  8. 
 407  See,  e.  g.,  Letter  from  Lindsey  Thomas,  Senior  Vice  President  Governmental  Relation,  AGL  Resources,  to 
 Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  AGL  Resources  Comment);  Nebraska  State  Senator  Baker  Comment  at  1;  Letter  from  Steve  Marzolf,  Virginia  PSC  Coordinator, 
 Virginia  Wireless  E-  911  Services  Board,  to  Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Virginia  Wireless  E-  911  Services  Board  Comment). 
 408  See,  e.  g.,  Letter  from  Susan  Nelson,  E911  Coordinator,  Alachua  County  Combined  Communications  Center,  to 
 Marlene  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Alachua  County  Combined  Communications  Center  Comment);  Letter  from  Lt.  Tim  Webb,  Searcy  Police  Department,  to  Marlene 
 Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Searcy  Police  Department  Comment);  Letter  from  Carmen  M.  Bryant,  Administrator,  CMRS  Emergency  Telephone  Services  Board,  to 
 Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  CMRS  Emergency  Telephone  Services  Board  Comment);  Letter  from  Fred  Stevens,  Director,  Hot  Spring  County  911,  to  Marlene  H. 
 Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Hot  Spring  County  911  Comment);  Letter  from  Debbie  ONeill,  Office  of  Emergency  Services  Administrator  Assistant,  Independence 
 County  Dispatch,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Independence  County  OES  Comment);  Letter  from  Susan  MacFarlane,  Maricopa  Region  911  Administrator, 
 City  of  Phoenix  Fire  Department,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Maricopa  Region  911  Comment);  Letter  from  Wes  Ashley,  Director,  Martinsville-  Henry 
 County  Communications  Center,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Martinsville-  Henry  County  911  Communications  Center  Comment);  Letter  from  William  W. 
 Willis,  Director,  Wayne  County  E-  911,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9,  2005)  (  Wayne  County  E911  Comment);  Letter  from  John  Benson,  E911  Program  Manager,  Iowa 
 Homeland  Security  and  Emergency  Management  Division,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  14,  2005)  (  Iowa  Homeland  Security  and  Emergency  Management 
 Division  Comment).  409 
 See  CMRS  Emergency  Telephone  Services  Board  Comment  at  1;  Maricopa  Region  911  Comment  at  1;  Martinsville-  Henry  County  911  Communications  Center  Comment  at  1;  Letter  from  Richard  N.  Taylor,  ENP,  to 
 Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1-  2  (filed  Mar.  9.  2005)  (  Taylor  ENP  Comment);  Virginia  Wireless  E-  911  Services  Board  Comment  at  1;  Wayne  County  E911  Comment  at  1;  Iowa 
 Homeland  Security  and  Emergency  Management  Division  Comment  at  1. 
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 that  the  increased  coverage  area  of  the  combined  company  would  expand  the  areas  in  which  subscribers  can  access  E911.  410  This  commenter  claims  that  one  of  the  limitations  of  wireless  E911  service  is  that  it 
 is  coverage  dependent,  since  [  e]  mergency  service  providers  need  ubiquitous  E911  service  from  both  wireline  and  wireless  providers.  411  Thus,  this  commenter  concludes  that  the  combined  companys 
 coverage  would  directly  benefit  the  public  interest  and  promoting  the  Commissions  statutory  public  safety  mandate.  412 
 156.  Many  commenters  representing  States  and  municipalities  in  rural  areas  also  express  their  support  of  the  pending  merger,  because  they  believe  that  the  merger  would  result  in  better  coverage, 
 improved  reliability,  enhanced  call  quality,  and  better  implementation  of  E911  services.  413  Based  on  ALLTELs  good  faith  implementation  of  E911  in  the  past,  they  believe  that  the  merger  would  enhance 
 the  capability  of  the  combined  company  to  implement  and  improve  E911  service,  providing  more  ubiquitous  E911  services  to  rural  areas.  414 
 157.  Nevertheless,  we  do  not  consider  improved  E911  deployment  to  be  a  benefit  of  this  merger,  as  the  Applicants  have  indicated  that  they  may  not  comply  with  the  Commission's  E911  handset 
 penetration  deadline  at  the  end  of  this  year.  415  We  confirm  our  commitment  to  the  E911  rules  and  remind  the  Applicants  that  they,  like  all  carriers,  are  obligated  to  comply  with  our  E911  rules,  including  the 
 requirement  that  carriers  electing  a  handset-  based  E911  solution  achieve  95  percent  penetration  by  the  end  of  this  year.  416  We  will  not  hesitate  to  take  enforcement  action  if  this  deadline  is  not  met. 
 9.  Conclusion 
 158.  We  find  that  the  proposed  transaction  would  result  in  many  of  the  transaction-  specific  public  interest  benefits  discussed  above.  Specifically,  in  those  markets  where  there  are  no  overlaps  or 
 410  See  Taylor  ENP  Comment  at  1. 
 411  Id. 
 412  See  Taylor  ENP  Comment  at  1. 
 413  See,  e.  g.,  Nebraska  State  Senator  Baker  Comment  at  1;  Speaker  Black  of  the  North  Carolina  House  Comment  at 
 1.  414 
 See,  e.  g.,  Senator  Jay  Scott,  Kansas  State  Legislature  Comment  at  1;  League  of  Nebraska  Municipalities  Comment  at  1;  North  Carolina  Representative  McComas  Comment  at  1;  Letter  from  James  W.  Rion,  Esq.,  Project 
 Manager,  South  Carolina  CMRS  E911,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  at  1  (filed  Mar.  9.  2005)  (  South  Carolina  CMRS  E911  Comment). 
 415  See  ALLTEL  Communications,  Inc.,  E-  911  Eleventh  Quarterly  Report,  CC  Docket  No.  94-  102,  at  2  (filed  May 
 2,  2005)  (stating  that  ALLTEL  may  have  difficulty  complying  with  the  December  31,  2005  requirement  to  have  [location-]  capable  handsets  deployed  to  95  [percent]  of  its  subscribers.);  Quarterly  Report  of  Western  Wireless 
 Corporation  on  its  Enhanced  911  Phase  II  Deployment,  CC  Docket  No.  94-  102,  at  6-  7  (filed  May  2,  2005)  (explaining  that  WWC  had  not  determined  whether  it  would  be  capable  of  meeting  the  95  percent  objective  by 
 December  31,  2005,  and  that  it  would  keep  the  Commission  informed  regarding  the  status  of  [its]  efforts.);  see  also  Letter  from  Kathryn  A.  Zachem,  counsel  for  ALLTEL  Corporation,  to  Marlene  H.  Dortch,  Secretary,  Federal 
 Communications  Commission,  CC  Docket  No.  94-  102  (filed  July  28,  2005)  (explaining  that  ALLTEL  expects  to  reach  approximately  85  [percent]  penetration  by  the  end  of  2005  and  anticipates  it  could  take  until  the  end  of 
 2007  to  reach  the  95  [percent]  penetration  level.  .  .  .);  Letter  from  Michele  C.  Farquhar,  counsel  for  Western  Wireless  Corporation,  to  Marlene  H.  Dortch,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  94- 
 102  (filed  May  2,  2005)  (discussing  that  meeting  the  95  percent  handset  penetration  deadline  will  be  a  considerable  challenge.  .  .  .). 
 416  See  47  C.  F.  R    20.18(  g)(  1)(  v). 
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 where  the  overlaps  are  unlikely  to  cause  competitive  harm,  we  find  that  this  transaction  results  in  many  public  interest  benefits  and  would  allow  the  combined  entity  to  more  effectively  compete  with  the 
 nationwide  carriers.  However,  while  we  find  that  this  transaction  is  likely  to  result  in  transaction-  specific  public  interest  benefits  and  result  in  the  combined  company  being  a  more  effective  competitor,  we  are  not 
 able  on  the  basis  of  this  record,  using  the  sliding  scale  approach  described  above,  to  conclude  that  they  are  sufficiently  large  or  imminent  to  outweigh  the  potential  harms  we  have  identified  in  certain  individual 
 markets.  In  those  markets,  therefore,  remedies  are  necessary  to  reduce  the  harms. 
 V.  CONDITIONS/  REMEDIES 
 159.  Using  the  analytical  standards  outlined  above,  we  found  that  the  Applicants  proposed  transaction  would  pose  significant  competitive  harms  in  a  number  of  local  mobile  telephony  markets.  We 
 conclude  that,  in  these  markets,  these  potential  harms  would  not  be  outweighed  by  the  proposed  transactions  alleged  public  interest  benefits.  Thus,  if  our  analysis  ended  at  this  point,  we  would  have  to 
 conclude  that  the  Applicants  have  not  demonstrated  that  the  proposed  transaction,  on  balance,  would  serve  the  public  interest,  convenience,  and  necessity. 
 160.  In  its  review  of  transactions,  the  Commission  is  empowered  to  impose  conditions  on  the  transfer  of  control  of  Commission  licenses  to  mitigate  the  harms  the  transaction  would  likely  create.  Such 
 conditions  are  tailored  to  address  the  specific  harms  anticipated  based  on  economic  analysis,  examination  of  documents  submitted  in  response  to  our  inquiry,  and  public  comment  contained  in  the  record  of  this 
 proceeding.  We  conclude  that  the  conditions  set  forth  below  alter  the  public  interest  balance  of  the  proposed  transaction  by  mitigating  the  potential  public  interest  harms.  Accordingly,  with  the  conditions 
 that  we  adopt  in  this  Order,  and  assuming  the  Applicants  compliance  with  these  conditions,  we  find  that  the  Applicants  have  demonstrated  that  the  proposed  transfer  of  licenses  would  serve  the  public  interest, 
 convenience,  and  necessity. 
 161.  We  received  a  number  of  additional  proposals  during  the  comment  period  from  commenters.  As  we  discuss  more  fully  below,  we  decline  to  impose  additional  conditions  proposed  by 
 various  commenters  that  we  find  are  not  tied  to  merger-  specific  harms. 
 A.  Operating  Unit  Divestitures 
 162.  In  Part  IV.  B.  4.  b,  we  found  that  the  transaction,  as  proposed,  would  be  likely  to  cause  significant  competitive  harm  in  certain  geographic  markets.  Specifically,  our  analysis  indicated  that,  in 
 certain  markets,  there  would  not  be  an  adequate  number  of  competing  carriers  remaining,  post-  merger,  with  sufficient  network  and  spectrum  assets  to  deter  anticompetitive  behavior  by  the  merged  entity.  We 
 therefore  condition  this  grant  of  authority  to  transfer  control  of  licenses  from  WWC  to  ALLTEL  on  the  divestiture  of  WWC  operating  units  (including  spectrum  associated  with  such  operating  units,  with  the 
 exception  of  PCS  spectrum  and  assets  used  solely  to  operate  WWCs  GSM  roaming  business,  including  GSM  roaming  contracts  and  equipment).  Because  ALLTELs  spectrum  holdings  are  not  particularly  high 
 in  the  markets  where  we  find  a  likelihood  of  competitive  harm    spectrum  holdings  are  under  45  megahertz    we  do  not  require  divestiture  of  WWCs  PCS  spectrum  in  these  markets.  Divestiture  of 
 WWCs  Cellular  spectrum  is  adequate  to  ensure  that  there  would  be  a  sufficient  number  of  competitors  with  the  presence  and  capacity  to  respond  to  a  price  increase  by  the  merged  company  in  the  listed 
 markets. 
 CMA  Name 
 CMA334  Arkansas  11  -  Hempstead 
 CMA430  Kansas  3  -  Jewell 
 CMA431  Kansas  4  -  Marshall 
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 CMA435  Kansas  8  -  Ellsworth 
 CMA436  Kansas  9  -  Morris 
 CMA437  Kansas  10  -  Franklin 
 CMA441  Kansas  14  -  Reno 
 CMA534  Nebraska  2  -  Cherry 
 CMA535  Nebraska  3  -  Knox 
 CMA536  Nebraska  4  -  Grant 
 CMA537  Nebraska  5  -  Boone 
 CMA538  Nebraska  6  -  Keith 
 CMA539  Nebraska  7  -  Hall 
 CMA540  Nebraska  8  -  Chase 
 CMA541  Nebraska  9  -  Adams 
 CMA542  Nebraska  10  -  Cass 
 B.  Operation  of  Divestitures 
 163.  Divestiture  of  operating  units  including  associated  spectrum,  with  the  exception  of  the  PCS  spectrum  and  GSM  roaming  business,  as  set  forth  above  (the  Divestiture  Assets),  will  be 
 accomplished  in  the  following  way.  A  management  trustee  (  Management  Trustee)  shall  be  appointed  to  serve  as  manager  of  the  Divestiture  Assets  until  such  assets  are  sold  to  third  party  purchasers  or 
 transferred  to  a  divestiture  trustee  (who  may  be  the  same  person  as  the  Management  Trustee).  During  the  period  in  which  the  Management  Trustee  is  in  day-  to-  day  control  of  the  Divestiture  Assets,  the  Applicants 
 shall  retain  de  jure  control  and  shall  have  the  sole  power  to  market  and  dispose  of  the  Divestiture  Assets  to  third  party  buyers,  subject  to  the  Commissions  regulatory  powers  and  process  with  respect  to  license 
 transfers  and  assignments. 
 164.  Accordingly,  we  require  that,  within  three  calendar  days  from  the  date  of  release  of  this  Order,  the  Applicants  file  an  appropriate  application  with  the  Bureau  to  transfer  the  Divestiture  Assets 
 into  the  trust  with  the  Management  Trustee,  which  application  shall  also  include  a  request  to  approve  the  identity  of  the  Management  Trustee  and  the  terms  of  the  trust  agreement.  We  further  require  that  the 
 Divestiture  Assets  shall  be  transferred  to  the  trust  in  accordance  with  the  terms  of  this  Order  no  later  than  upon  consummation  of  this  proposed  transaction,  or  within  three  calendar  days  after  the  Bureau  approves 
 the  appropriate  applications  transferring  the  Divestiture  Assets  to  the  Management  Trustee,  if  the  Bureau  does  not  act  on  such  applications  prior  to  the  consummation  of  the  proposed  transaction.  The  trust 
 agreement  shall  include  all  reasonable  and  necessary  rights,  powers,  and  authorities  to  permit  the  Management  Trustee  to  perform  his  duties  of  day-  to-  day  management  of  the  Divestiture  Assets,  in  the 
 ordinary  course  of  business,  in  order  to  permit  expeditious  divestiture.  417  The  Management  Trustee  will  serve  at  the  cost  and  expense  of  the  Applicants. 
 165.  From  the  date  of  release  of  this  Order,  and  until  the  divestitures  ordered  herein  have  been  consummated,  both  the  Applicants  and  the  Management  Trustee  shall  preserve,  maintain,  and  continue  to 
 support  the  Divestiture  Assets  and  shall  take  all  steps  to  manage  them  in  a  way  as  to  permit  prompt 
 417  The  duties  and  responsibilities  of  the  Management  Trustee  and  the  terms  relating  to  how  the  Divestiture  Assets 
 are  to  be  preserved  during  the  term  of  the  trust  are  more  fully  set  forth  in  the  DOJ  Stipulation  and  the  DOJ  Proposed  Final  Judgment  filed  in  the  District  Court  for  the  District  of  Columbia  on  July  6,  2005.  See  discussion  supra  Part 
 II.  C.  2.  Except  to  the  extent  that  any  provisions  herein  conflict,  we  require  that  the  Applicants  and  the  Management  Trustee  fully  comply  with  such  provisions  as  if  they  were  set  forth  herein  in  extenso. 
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 divestiture.  We  require  that  the  Applicants  and  the  Management  Trustee  abide  by  the  same  provisions  relating  to  the  duties  of  the  Management  Trustee  and  the  preservation  of  the  Divestiture  Assets  as  those 
 contained  in  the  Stipulation  that  the  Applicants  have  entered  into  with  the  DOJ.  We  also  require  that,  to  the  extent  the  Stipulation  requires  that  the  Applicants  or  the  Management  Trustee  provide  the  DOJ  with 
 any  reports  or  requires  that  the  Applicants  seek  any  approvals  from  the  DOJ,  the  Applicants  will  also  provide  such  reports  to,  and  seek  such  approvals  from,  the  Commission. 
 166.  The  Applicants  will  be  allowed  120  days  from  the  closing  of  their  transaction  or  five  days  after  notice  of  entry  of  the  Final  Judgment,  whichever  is  later  (the  Management  Period),  to  divest  the 
 Divestiture  Assets  prior  to  the  second  stage  of  the  divestiture  procedures  becoming  operative.  Upon  application  by  the  Applicants  to  the  Bureau,  the  Bureau  may  grant  one  or  more  extensions  to  the 
 Management  Period  not  to  exceed  60  days  in  the  aggregate  to  allow  the  Applicants  further  time  to  dispose  of  the  Divestiture  Assets.  418 
 167.  Upon  expiration  of  the  Management  Period,  any  Divestiture  Assets  that  remain  owned  by  the  Applicants  shall  be  irrevocably  transferred  to  a  divestiture  trustee  (the  Divestiture  Trustee),  who 
 shall  be  solely  responsible  for  accomplishing  disposal  of  the  Divestiture  Assets.  The  Applicants  will  submit  to  the  Bureau,  for  approval,  both  the  name  of  the  proposed  Divestiture  Trustee  and  a  draft  of  the 
 trust  agreement  419  to  be  entered  into  with  said  trustee  together  with  an  appropriate  application  to  effect  such  transfer  no  later  than  30  days  prior  to  the  expiration  of  the  Management  Period.  420  The  Divestiture 
 Trustee  will  serve  at  the  cost  and  expense  of  the  Applicants  and  shall  file  monthly  reports  with  the  Bureau  setting  forth  his  efforts  to  divest  the  Divestiture  Assets. 
 168.  The  Divestiture  Trustee  shall  use  its  best  efforts  to  sell  the  Divestiture  Assets  within  six  months  of  his  appointment,  subject  to  the  Commissions  regulatory  powers  and  process  with  respect  to 
 license  transfers  and  assignments.  The  expeditious  disposal  of  the  Divestiture  Assets  during  this  period  is  of  greater  importance  than  the  price  that  might  otherwise  be  obtained  for  such  assets.  If  a  sale  of  any  of 
 the  Divestiture  Assets  that  consist  of  operating  units  and  associated  spectrum  has  not  been  effectuated  within  such  period,  the  Divestiture  Trustee  shall  file  a  report  with  the  Bureau  explaining  the  Divestiture 
 Trustees  efforts  to  sell  the  Divestiture  Assets,  the  reasons  why  the  Divestiture  Assets  have  not  been  sold,  and  the  Divestiture  Trustees  recommendations.  The  Commission  will  consider  such  report  and  will  issue 
 such  further  orders  as  it  considers  appropriate. 
 169.  To  the  extent  that  any  of  the  Divestiture  Assets  are  included  within  the  Stipulation  and  Final  Judgment,  we  are  willing  to  allow  the  Applicants  to  proceed  to  divest  such  assets  in  accordance  with 
 the  terms  of  the  agreements  that  are  contained  in  those  documents.  To  the  extent  that  this  Order  requires  divestitures  in  any  market  that  are  more  extensive  than  those  required  by  the  DOJ,  we  require  that  the 
 Applicants  comply  with  this  Order  and  completely  dispose  of  the  Divestiture  Assets  included  in  such  markets.  To  the  extent  that  we  are  requiring  divestitures  in  additional  markets  to  those  of  the  DOJ,  we 
 will  require  the  Applicants,  prior  to  closing  their  transaction,  to  provide  the  Commission  with 
 418  If  the  Applicants  have  filed  an  application  with  the  Commission  seeking  consent  to  the  sale  of  any  of  the 
 Divestiture  Assets  to  a  third  party  within  the  time  periods  set  forth  above  but  the  Commission  has  not  acted  by  the  end  of  such  period,  such  period  will  be  extended  and  shall  expire  five  days  after  the  Commissions  action  with 
 respect  to  such  Divestiture  Assets.  419 
 The  Bureau  will  consult  with  the  Office  of  General  Counsel  on  matters  relating  to  the  name  of  the  proposed  divestiture  trustee  and  the  terms  of  the  divestiture  trust. 
 420  Except  to  the  extent  that  any  provisions  herein  conflict,  the  duties  and  responsibilities  of  the  Divestiture  Trustee 
 are  more  fully  set  forth  in  the  Final  Judgment  and  we  require  that  the  Applicants  and  the  Divestiture  Trustee  fully  comply  with  such  provisions  as  if  they  were  set  forth  herein  in  extenso. 
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 documentation  substantially  similar  to  that  provided  to  the  DOJ  with  respect  to  the  additional  divestitures  that  we  require  herein. 
 VI.  CONCLUSION 
 170.  We  find  that  competitive  harm  is  unlikely  in  most  mobile  telephony  markets  as  a  result  of  this  transaction.  As  discussed  above,  however,  with  regard  to  sixteen  local  mobile  telephony  markets,  our 
 case-  by-  case  analysis  shows  that  likely  competitive  harms  exceed  likely  benefits  of  the  transaction,  and  we  therefore  require  remedies  to  ameliorate  the  expected  harm.  We  emphasize  that  our  judgment  in  this 
 matter  does  not  mean  that  our  analysis  would  be  the  same  if  additional  consolidation  in  this  sector  were  to  be  proposed  in  the  future.  Clearly,  there  is  a  point  beyond  which  further  consolidation  would  not  be  in 
 the  public  interest.  As  we  have  here,  when  reviewing  any  future  applications  of  this  nature,  we  will  look  closely  at  the  competitive  circumstances  pertaining  at  that  time  in  the  affected  markets  and  will  make  a 
 considered  judgment  based  on  careful  weighing  of  all  the  relevant  circumstances. 
 VII.  ORDERING  CLAUSES 
 171.  Accordingly,  having  reviewed  the  applications,  the  petitions,  and  the  record  in  this  matter,  IT  IS  ORDERED  that,  pursuant  to  sections  4(  i)  and  (j),  309,  310(  d)  of  the  Communications  Act  of 
 1934,  as  amended,  47  U.  S.  C.    154(  i),  (j),  309,  310(  d),  the  applications  for  the  transfer  of  control  of  licenses  from  WWC  to  ALLTEL  are  GRANTED,  to  the  extent  specified  in  this  order  and  subject  to  the 
 conditions  specified  below. 
 172.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  section  1.9030  of  the  Commissions  rules,  47  C.  F.  R.    1.9030,  the  application  for  the  transfer  of  control  of  a  de  facto  transfer  lease  authorization 
 from  WWC  to  ALLTEL  is  GRANTED,  to  the  extent  specified  in  this  order  and  subject  to  the  conditions  specified  below. 
 173.  IT  IS  FURTHER  ORDERED  that  the  above  grant  shall  include  authority  for  ALLTEL  to  acquire  control  of:  (a)  any  license  or  authorization  issued  to  WWC  and  its  subsidiaries  during  the 
 Commission's  consideration  of  the  transfer  of  control  applications  or  the  period  required  for  consummation  of  the  transaction  following  approval;  (b)  construction  permits  held  by  such  licensees  that 
 mature  into  licenses  after  closing;  and  (c)  applications  filed  by  such  licensees  and  that  are  pending  at  the  time  of  consummation  of  the  proposed  transfer  of  control. 
 174.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  section  214  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    214,  and  section  63.24  of  the  Commission's  rules,  47  C.  F.  R.    63.24,  the 
 applications  to  (1)  transfer  control  from  WWC  to  Widgeon  of  an  international  section  214  authorization  and  (2)  assign  from  WWC  to  Widgeon  an  international  section  214  to  provide  global  facilities-  based  and 
 resold  international  services  are  GRANTED,  subject  to  the  conditions  applicable  to  international  section  214  authorizations. 
 175.  IT  IS  FURTHER  ORDERED  that  the  Commissions  grant  of  the  transfer  of  control  of  licenses  from  WWC  to  ALLTEL  is  conditioned  upon  the  completion  of  the  divestitures  described  in  Part 
 V  of  this  Order. 
 176.  IT  IS  FURTHER  ORDERED  that,  with  respect  to  roaming,  ALLTEL  may  not  prevent  its  customers  from  completing  calls  in  the  manner  contemplated  in  47  C.  F.  R.    20.12(  c),  unless  specifically 
 requested  to  do  so  by  a  subscriber. 
 177.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  sections  4(  i)  and  (j),  309,  and  310(  d)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  (j),  309,  310(  d),  the  Petitions  to  Deny 
 the  transfer  of  control  of  licenses  and  authorizations  from  WWC  to  ALLTEL  filed  by  Dobson  Cellular 
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 Systems,  Inc.  and  American  Cellular  Corporation,  Lamar  County  Cellular,  Inc.,  and  Rural  Telecommunications  Group,  Inc.  are  DENIED  for  the  reasons  stated  herein. 
 178.  IT  IS  FURTHER  ORDERED  that  this  Memorandum  Opinion  and  Order  SHALL  BE  EFFECTIVE  upon  release.  Petitions  for  reconsideration  under  section  1.106  of  the  Commission's  rules, 
 47  C.  F.  R.    1.106,  may  be  filed  within  thirty  days  of  the  date  of  public  notice  of  this  order. 
 FEDERAL  COMMUNICATIONS  COMMISSION 
 Marlene  H.  Dortch  Secretary 
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 APPENDIX  A  COMMENTING  PARTIES  AND  PETITIONERS 
 Petitions  to  Deny  Filed  by: 
 Dobson  Cellular  Systems,  Inc. 
 Lamar  County  Cellular,  Inc. 
 Comments  in  Opposition  Filed  by: 
 Rural  Telecommunications  Group,  Inc. 
 Comments  Filed  by: 
 AGL  Resources 
 Alachua  County  Combined  Communications  Center 
 Associated  General  Contractors  of  Ohio 
 Baker,  Senator  Tom,  Nebraska  State  Legislature 
 Arkansas  Attorney  General  Mike  Beebe 
 Speaker  James  B.  Black,  North  Carolina  House  of  Representatives 
 City  of  Searcy  Police  Department 
 CMRS  Emergency  Telephone  Services  Board 
 E911  Program  Manager  Iowa  Homeland  Security  and  Emergency  Management  Division 
 Senator  Jay  Scott  Emler,  Kansas  State  Legislature 
 Georgia  Chamber  of  Commerce 
 Grand  Island  Area  Chamber  of  Commerce 
 The  Greater  Lansing  Business  Monthly 
 Hastings  Area  Chamber  of  Commerce 
 Hastings  Economic  Development  Corporation 
 Dave  Heineman,  Governor  of  Nebraska 
 Hot  Spring  County  911 
 Independence  County  Office  of  Emergency  Services 
 Kansas  Grain  &  Feed  Association 
 Commissioner  Frank  E.  Landis,  Nebraska  Public  Service  Commission 
 The  League  of  Nebraska  Municipalities 
 Lorain  County  Chamber  of  Commerce 
 Maricopa  Region  911  Office 
 Mayor  John  R.  Marks,  III,  City  of  Tallahassee 
 Martinsville-  Henry  County  9-  1-  1  Communications  Center 
 Representative  Daniel  Francis  McComas,  North  Carolina  General  Assembly 
 Nebraska  Farm  Bureau  Federation 
 Regions  Financial  Corp. 
 Rosebud  Sioux  Tribe  Utility  Commission 
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 Rural  Cellular  Association 
 SC  State  CMRS  E9-  1-  1 
 Richard  N.  Taylor,  ENP 
 Turtle  Mountain  Band  of  Chippewa  Indians 
 United  States  Cellular  Corporation 
 Virginia  Wireless  E-  911  Services  Board 
 Wayne  County  E-  911 
 Joint  Opposition  to  Petitions  to  Deny  and  Comments  Filed  by: 
 ALLTEL  Corporation  and  Western  Wireless  Corporation 
 Reply  Comments  Filed  by: 
 Dobson  Cellular  Systems  Inc. 
 Lamar  County  Cellular,  Inc.  Rural  Telecommunications  Group,  Inc. 
 United  States  Cellular  Corporation 
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 APPENDIX  B  LIST  OF  MARKETS  IDENTIFIED  FOR  FURTHER  ANALYSIS  BY  INITIAL  SCREEN 
 CEAs: 
 CEA  Name 
 CEA1920*  Dallas,  TX-  OK  CEA3760*  Kansas  City,  MO-  KS 
 CEA4360  Lincoln,  NE  CEA4400*  Little  Rock-  North  Little  Rock,  AR 
 CEA6660  Rapid  City,  SD-  MT-  NE-  ND  CEA9040  Wichita,  KS-  OK 
 CEA9514  Manhattan,  KS  CEA9532  Grand  Island,  NE 
 CEA9533  North  Platte,  NE-  CO  CEA9534  Norfolk,  NE 
 CEA9535  Scottsbluff,  NE-  WY 
 CMAs: 
 CMA  Name 
 CMA172  Lincoln,  NE  CMA334*  Arkansas  11  -  Hempstead 
 CMA430  Kansas  3  -  Jewell  CMA431*  Kansas  4  -  Marshall 
 CMA435  Kansas  8  -  Ellsworth  CMA436  Kansas  9  -  Morris 
 CMA437  Kansas  10  -  Franklin  CMA441  Kansas  14  -  Reno 
 CMA512  Missouri  9  -  Bates  CMA534  Nebraska  2  -  Cherry 
 CMA535  Nebraska  3  -  Knox  CMA536  Nebraska  4  -  Grant 
 CMA537  Nebraska  5  -  Boone  CMA538  Nebraska  6  -  Keith 
 CMA539  Nebraska  7  -  Hall  CMA540  Nebraska  8  -  Chase 
 CMA541  Nebraska  9  -  Adams  CMA542  Nebraska  10  -  Cass 
 CMA658*  Texas  7  -  Fannin 
 *  Markets  in  which  the  combined  company  will  hold  70  megahertz  or  more  of  spectrum. 
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 APPENDIX  C  MARKET-  SPECIFIC  ANALYSIS  OF  MARKETS  INVOLVING  DIVESTITURE 
 Set  forth  below  is  a  detailed  examination  of  each  of  the  CMA  markets  in  which  we  determined  that  the  public  interest  would  not  be  served  by  the  proposed  transfer  of  control  of  Western  Wireless  to 
 ALLTEL  and  would  likely  lead  to  anticompetitive  harms  that  require  a  remedy. 
 The  market  share  and  HHI  information  appearing  herein  are  derived  from  our  analysis  of  three  sets  of  data:  geographic  service  provision  data,  Local  Number  Portability  (LNP)  data,  and  data  compiled 
 in  our  Numbering  Resource  Utilization  /  Forecast  (NRUF)  database.  Using  these  different  sets  of  data  to  cross-  check  against  each  other,  we  find  that  they  essentially  corroborate  each  other.  When  combined  with 
 the  other  factors  in  our  multi-  factor,  market-  specific  analysis,  we  have  a  reliable  basis  for  drawing  competition-  related  conclusions  based  on  the  totality  of  the  circumstances  that  are  present  in  a  given 
 market. 
 Arkansas  11  -  Hempstead  (CMA  334) 
 In  terms  of  market  share  in  this  CMA  (which  has  a  population  of  more  than  67,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED] 
 percent  of  the  subscribers.  If  ALLTEL  and  Western  Wireless  were  merged  in  this  market,  the  post-merger  share  would  rise  to  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are 
 Sprint,  with  [REDACTED]  percent  of  the  subscribers,  and  Nextel,  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  this  CMA  would  be  [REDACTED],  constituting  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees  in  this  CMA.  The  merged  entity  would  hold  a  total  of  70  MHz  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched 
 service  in  all  four  counties  of  the  CMA  and  have  network  coverage  throughout  it  as  well.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to 
 Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  (reflecting 
 [REDACTED]  percent  of  Western  Wirelesss  ports). 
 Sprint  and  Nextel  hold  or  control  lesser  amounts  of  spectrum  in  all  four  counties  in  the  CMA.  Four  other  licensees    Cingular,  Leap,  T-  Mobile,  and  Verizon    hold  lesser  amounts  of  spectrum  in 
 various  counties  in  the  Hempstead  CMA.  Sprint  has  launched  service  in  each  of  the  four  counties  in  the  CMA,  and  its  network  covers  almost  two  thirds  of  the  population,  however  its  network  covers  less  than 
 25  percent  of  the  land  area.  Nextel  also  has  network  coverage  in  the  CMA  and  it  covers  less  than  40  percent  of  the  population  and  less  than  25  percent  of  the  land  area  in  the  CMA. 
 Conclusion.  The  proposed  merger  would  involve  merging  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  market  share.  Whereas  ALLTEL  now  faces  [REDACTED] 
 competitors  of  some  size  in  the  CMA,  the  combined  entity  would  face  [REDACTED]  with  a  greater  than  [REDACTED]  percent  market  share.  Combined  with  the  fact  that  ALLTEL  would  have  approximately 
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 [REDACTED]  percent  of  the  subscribers,  we  find  it  highly  likely  that  ALLTEL  would  be  able  to  profitably  raise  prices  or  lower  the  quality  of  wireless  service.  Therefore  on  the  basis  of  the  record,  we 
 conclude  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  this  CMA. 
 Kansas  3    Jewell  (CMA430) 
 In  the  Kansas  3  -  Jewell  CMA  (which  has  a  population  of  about  52,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  in 
 terms  of  market  share.  Thus,  if  combined,  the  market  share  for  the  merged  entity  would  be  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees  in  this  CMA.  In  seven  counties  the  merged  entity  would  hold  a  total  of  60  MHz,  and  in  the  eighth  county  in  the  CMA  it  would  hold  70  MHz. 
 ALLTEL  and  Western  Wireless  have  launched  service  throughout  the  CMA  and  have  network  coverage  throughout  it  as  well.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004. 
 Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  reflecting  [REDACTED]  percent  of  Western  Wirelesss  ports. 
 Cingular,  Nextel,  Sprint,  and  Poplar  PCS  hold  spectrum  in  all  eight  counties  of  the  CMA.  Three  other  carriers    Kansas  Personal  Communications,  T-  Mobile,  and  Westlink    hold  lesser  spectrum  in 
 various  counties  in  the  Jewell  CMA.  Also,  Cingular  and  Westlink  Communications  have  entered  into  a  long-  term  de  facto  spectrum  lease,  and  Cingular  is  leasing  30  MHz  of  spectrum  in  two  counties  and  20 
 MHz  of  spectrum  in  two  counties  to  Westlink  Communications.  The  network  coverage  by  the  other  carriers  is  slight.  None  of  the  other  carriers  has  a  network  that  covers  more  than  eight  percent  of  the 
 population  or  six  percent  of  the  land  area. 
 Conclusion.  The  proposed  transaction  would  [REDACTED]  in  this  CMA.  No  other  carrier  appears  to  have  the  facilities  in  place  to  respond  quickly  and  effectively  to  any  anticompetitive  actions  by 
 the  merged  entity.  Therefore  on  the  basis  of  the  record,  we  conclude  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  this  CMA. 
 Kansas  4    Marshall  (CMA  431) 
 In  the  Kansas  4    Marshall  CMA  (which  has  a  population  of  over  130,000),  ALLTEL  has  [REDACTED]  percent  market  share  of  the  wireless  subscribers,  while  Western  Wireless  has 
 [REDACTED]  percent;  merging  these  entities  in  this  market  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED] 
 percent  of  the  subscribers,  T-  Mobile  with  [REDACTED]  percent,  and  Nextel,  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Marshall  CMA  would  be  [REDACTED],  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees  in  this  CMA.  The  merged  entity  would  hold  between  60  to  70  MHz  throughout  the  CMA  (the  levels  vary  by  area  in  some  counties  due  to 
 partitioning  of  PCS  licenses).  ALLTEL  and  Western  Wireless  are  launched  throughout  the  CMA  and  their  network  coverage  includes  the  entire  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to- 
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 mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and 
 [REDACTED]  to  ALLTEL  (reflecting  [REDACTED]  percent  of  Western  Wirelesss  ports). 
 Cingular,  Nextel,  Poplar  PCS,  Sprint,  and  T-  Mobile  hold  spectrum  in  all  of  the  counties  in  the  CMA.  Kansas  Personal  Communications  and  Westlink  Communications  hold  spectrum  in  two  counties 
 each  in  this  CMA.  Nextel,  Sprint,  T-  Mobile,  and  Westlink  have  network  coverage  of  between  68  and  76  percent  of  the  population,  but  less  than  20  percent  of  the  land  area.  However,  only  Sprint  and  T-  Mobile 
 have  a  market  share  greater  than  [REDACTED]  percent. 
 Conclusion.  The  proposed  transaction  would  combine  the  [REDACTED]  and  [REDACTED]  largest  competitors  in  the  Kansas  4    Marshall  CMA  in  terms  of  subscribers.  Among  carriers  with  a 
 market  share  greater  than  [REDACTED]  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-based  competitors  from  [REDACTED]  to  [REDACTED].  Significantly,  however,  in  three  of  the  CMAs 
 counties  (Marshall,  Nemaha,  and  Pottawatomie)  the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  three  to  two  carriers.  These  three  counties  reflect  31  percent  of  the  population  in  the 
 CMA.  In  light  of  the  small  percentage  of  land  area  covered  by  the  competitors  networks  and  the  merged  entitys  [REDACTED]  market  share,  we  conclude  there  is  a  substantial  risk  that  the  proposed  transaction, 
 without  conditions,  would  lead  to  anticompetitive  harms  in  the  Kansas  4    Marshall  CMA. 
 Kansas  8    Ellsworth  (CMA  435) 
 In  this  CMA  (which  has  a  population  of  about  133,000),  ALLTEL  has  a  market  share  of  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent;  if 
 combined,  the  post-  merger  share  would  be  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the  subscribers,  and  T-  Mobile  with  [REDACTED] 
 percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Ellsworth  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  hold  the  cellular  licenses  in  the  CMA.  The  merged  entity  would  hold  between  50  and  60  MHz  of  spectrum  throughout  the  CMA  (the  levels  vary  by  area  in  some  counties 
 due  to  partitioning  of  PCS  licenses).  ALLTEL  and  Western  Wireless  launched  service  in  each  county  and  provide  network  coverage  throughout  the  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-mobile 
 ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and 
 [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Five  other  licensees  hold  spectrum  in  all  six  counties  of  this  CMA    Cingular,  Nextel,  Poplar  PCS,  Sprint  and  T-  Mobile.  Five  service  providers  hold  spectrum  in  fewer  than  all  counties    Kansas 
 Personal  Communications,  Leap,  Nex  Tex,  NTCH,  and  Westlink  Communications.  Also  Cingular  and  Westlink  Communications  have  entered  into  a  long-  term  de  facto  spectrum  lease  and  Cingular  is  leasing 
 20  MHz  to  Westlink  Communications  in  two  counties  in  this  CMA.  Cingular,  Sprint,  T-  Mobile,  and  Westlink  Communications  have  network  coverage  of  more  than  50  percent  of  the  population  of  the  CMA, 
 however  none  covers  more  than  30  percent  of  the  land  area. 
 Conclusion.  As  proposed,  the  merger  would  combine  the  [REDACTED]  and  [REDACTED]  largest  providers  in  this  particular  CMA,  and  the  resulting  entity  would  be  [REDACTED]  times  larger 
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 than  the  next  largest  provider.  Among  carriers  with  a  market  share  greater  than  [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  [REDACTED]  to 
 [REDACTED].  In  three  of  the  CMAs  counties  the  merger  would  result  in  three  or  fewer  competitors  with  network  coverage.  In  fact,  in  two  counties  the  merged  entity  would  be  the  only  wireless  carrier  with 
 network  coverage.  Therefore,  because  of  the  [REDACTED]  market  share  that  would  be  held  by  the  merged  entity  and  the  small  land  area  covered  by  the  networks  of  competitors  in  the  CMA,  we  conclude 
 that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Kansas  8    Ellsworth  CMA. 
 Kansas  9    Morris  (CMA  436) 
 In  the  Kansas  9    Morris  CMA  (which  has  a  population  of  about  60,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent;  if 
 combined,  the  merged  entity  would  have  a  post-  merger  market  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  T-  Mobile,  with  [REDACTED]  percent  of  the 
 subscribers,  Sprint  with  [REDACTED]  percent,  and  Nextel  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Morris  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees  in  the  CMA.  The  merged  entity  would  hold  between  50  and  60  MHz  of  spectrum  throughout  the  CMA  (the  levels  vary  by  area  in  some 
 counties  due  to  partitioning  of  PCS  licenses).  ALLTEL  and  Western  Wireless  have  launched  service  in  all  five  counties  and  their  network  coverage  extends  throughout  the  CMA.  ALLTEL  had  a  total  of 
 [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to 
 mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Five  other  licensees  hold  spectrum  in  all  five  counties  of  the  Morris  CMA    Cingular,  Nextel,  Poplar  PCS,  Sprint,  and  T-  Mobile.  Four  other  service  providers  hold  spectrum  in  fewer  than  all  counties 
   Kansas  Personal  Communications,  Leap,  NTCH,  and  Westlink  Communications.  Five  providers  have  network  coverage  in  some  portion  of  the  CMA,  and  four  of  these  carriers  (Cingular,  Nextel,  Sprint,  and 
 T-  Mobile)  cover  over  55  percent  of  the  population.  However,  none  of  these  providers  covers  more  than  50  percent  of  the  land  area.  The  remaining  carrier,  Westlink  Communications,  covers  less  than  six 
 percent  of  the  population  and  five  percent  of  the  land  area  of  this  CMA. 
 Conclusion.  The  proposed  merger  would  combine  the  number  [REDACTED]  and  [REDACTED]  carriers  in  the  Kansas  9    Morris  CMA,  which  then  would  be  about  [REDACTED]  times  the  size  of  the 
 [REDACTED]  carriers  with  more  than  [REDACTED]  percent  of  the  market.  Among  carriers  with  a  market  share  greater  than  [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of 
 facilities-  based  competitors  from  [REDACTED]  to  [REDACTED].  The  other  carriers  in  this  CMA  have  network  coverage  in  only  three  of  the  five  counties.  Thus  in  2  counties  (Greenwood  and  Morris)  the  only 
 two  carriers  with  network  coverage  are  merging.  About  23  percent  of  the  CMAs  population  lives  in  the  counties  where  there  would  be  a  merger  to  monopoly.  Although  there  are  several  carriers  who  have 
 network  coverage,  the  Applicants  combined  market  share  and  lack  of  any  current  alternative  in  two  counties  in  the  proposed  merger  causes  us  to  conclude  that  there  is  a  substantial  risk  that  the  transaction, 
 without  conditions,  would  lead  to  anticompetitive  harm  in  this  particular  CMA. 
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 Kansas  10    Franklin  (CMA  437) 
 In  this  CMA  (which  has  a  population  of  about  113,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of  the  subscribers;  if 
 combined,  this  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  T-  Mobile  with  [REDACTED]  percent  of  the  subscribers,  Sprint  with 
 [REDACTED]  percent,  Nextel  with  [REDACTED]  percent,  and  Cingular  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Franklin  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  The  merged  entity  would  hold  between  50  and  60  MHz  of  spectrum  throughout  the  CMA  (the  levels  vary  by  area  in  some  counties  due 
 to  partitioning  of  PCS  licenses).  ALLTEL  and  Western  Wireless  are  launched  and  provide  network  coverage  in  all  eight  counties  of  the  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile 
 ports  out  in  2004,  with  [REDACTED]  to  Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004, 
 with  [REDACTED]  to  ALLTEL  (reflecting  [REDACTED]  percent  of  Western  Wirelesss  ports). 
 Four  other  licensees  hold  spectrum  in  all  eight  counties  of  the  Franklin  CMA    Cingular,  Nextel,  Sprint,  and  T-  Mobile.  Four  other  service  providers  hold  spectrum  in  fewer  than  all  counties    Kansas 
 Personal  Communications,  Leap,  NTCH,  Poplar  PCS,  and  Verizon.  Cingular,  Nextel,  Sprint,  T-  Mobile  and  Verizon  have  network  coverage  in  this  CMA.  Cingular  covers  over  95  percent  of  the  population  and 
 land  area,  T-  Mobile  covers  two  thirds  of  the  population  and  less  than  40  percent  of  the  land  area,  Nextel  and  Sprint  cover  less  than  40  percent  of  the  population  and  less  than  20  percent  of  the  land  area,  and 
 Verizon  covers  less  than  seven  percent  of  the  population  and  less  than  four  percent  of  the  land  area.  However,  despite  the  above  network  coverage,  only  [REDACTED]  and  [REDACTED]  have  market 
 shares  greater  than  [REDACTED]  percent. 
 Conclusion.  The  merger  as  proposed  would  combine  the  [REDACTED]  and  [REDACTED]  largest  carriers  in  the  CMA.  Among  carriers  with  a  market  share  greater  than  [REDACTED]  in  the  CMA, 
 the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  [REDACTED]  to  [REDACTED].  More  significantly,  in  three  of  the  CMAs  eight  counties,  the  merged  company  would  be 
 the  only  provider  with  network  coverage,  and  in  another  three  counties  there  would  be  only  two  providers.  These  six  counties  contain  53  percent  of  the  CMA  population.  In  five  counties,  containing  45 
 percent  of  the  CMA  population,  the  merger  would  also  reduce  the  number  of  carriers  with  network  coverage  to  two  or  fewer.  As  a  result,  we  conclude  that  there  is  a  substantial  risk  that  the  transaction, 
 without  conditions,  would  lead  to  anticompetitive  harms  in  this  CMA. 
 Kansas  14    Reno  (CMA  441) 
 In  the  Kansas  14  -  Reno  CMA  (which  has  a  population  of  about  175,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  if  combined,  this  would  lead  to  a  post-  merger  market  share  of  [REDACTED]  percent.  The  other  carriers  with  market  shares  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the 
 subscribers  T-  Mobile  with  [REDACTED]  percent,  Nextel  with  [REDACTED]  percent,  Leap  with 
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 [REDACTED]  percent,  and  Cingular  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  this  CMA  would  be  [REDACTED],  constituting  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  The  merged  entity  would  hold  between  50  and  60  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have 
 launched  service  and  provide  network  coverage  in  all  six  counties  of  the  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting 
 [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss 
 ports). 
 Five  other  licensees  hold  spectrum  in  all  six  counties  of  Kansas  14    Reno  Cingular,  Nextel,  Poplar  PCS,  Sprint,  and  T-  Mobile.  Four  other  licensees  hold  spectrum  in  fewer  than  all  counties   
 Kansas  Personal  Communications,  Leap,  NTCH,  and  Westlink  Communications.  Cingular,  Leap,  Nextel,  Sprint,  T-  Mobile,  and  Westlink  Communications  have  network  coverage  in  this  CMA.  Nextel,  Sprint, 
 and  T-  Mobile  cover  between  50  and  75  percent  of  the  population  and  only  between  15  and  25  percent  of  the  land  area  of  the  CMA.  Cingular  covers  less  than  45  percent  of  the  population  and  less  than  35  percent 
 of  the  land  area  while  Westlink  covers  less  than  35  percent  of  the  population  and  ten  percent  of  the  land  area.  Finally,  Leap  covers  less  than  15  percent  of  the  population  and  less  than  two  percent  of  the  land 
 area.  However,  despite  the  above  coverage,  only  [REDACTED]  has  a  market  share  greater  than  two  percent. 
 Conclusion.  The  merger  as  proposed  would  combine  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  Kansas  14    Reno  CMA.  Among  carriers  with  a  market  share  greater  than 
 [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  [REDACTED]  to  [REDACTED].  Additionally,  in  three  counties  the  merger  would  decrease  the 
 number  of  carriers  with  network  coverage  to  three  or  fewer.  These  three  counties  (Kingman,  Cowley,  and  Harper)  reflect  29  percent  of  the  CMA  population.  Although  there  are  a  significant  number  of 
 competitors  in  part  of  the  CMA,  that  is  not  true  throughout  the  CMA.  As  a  result,  we  conclude  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the 
 Kansas  14    Reno  CMA. 
 Nebraska  2    Cherry  (CMA  534) 
 In  the  Nebraska  2  -  Cherry  CMA  (which  has  a  population  of  about  30,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent;  if 
 combined  as  proposed,  the  merged  entity  would  have  a  [REDACTED]  percent  market  share.  No  other  service  providers  have  market  share  in  this  CMA. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  After  the  transaction,  the  merged  entity  would  hold  a  total  of  55  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless 
 are  launched  in  all  eight  counties  of  the  CMA  and  have  network  coverage  in  each  county  as  well.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to 
 Western  Wireless  ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004. 
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 Five  carriers  hold  spectrum  in  every  county  in  the  CMA    Cingular,  NE  Colorado,  Nextel,  Sprint,  and  T-  Mobile,  although  T-  Mobile  only  holds  5  MHz  of  spectrum  throughout  the  CMA.  Hamilton 
 Wireless,  PinPoint  Communications,  and  Verizon  hold  spectrum  in  fewer  than  all  counties.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing 
 30  MHz  of  spectrum  to  NE  Colorado  in  one  county  in  this  CMA.  Only  NE  Colorado  and  Verizon  have  network  coverage  in  this  CMA.  The  NE  Colorado  network  reaches  about  ten  percent  of  the  population 
 and  less  than  half  a  percent  of  the  land  area,  while  Verizon  has  coverage  that  reaches  less  than  one  percent  of  the  population. 
 Conclusion.  The  transaction  as  proposed  would  effectively  lead  to  [REDACTED]  in  this  CMA.  No  other  carrier  appears  to  have  the  facilities  in  place  to  respond  quickly  and  effectively  to  any 
 anticompetitive  actions  by  the  merged  entity.  Thus,  we  conclude  on  the  basis  of  the  record  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the 
 Nebraska  2    Cherry  CMA. 
 Nebraska  3    Knox  (CMA  535) 
 In  the  Nebraska  3    Knox  CMA  (which  has  a  population  of  about  117,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  two  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the 
 subscribers,  and  NE  Colorado  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  After  the  transaction,  the  merged  entity  would  hold  a  total  of  55  to  60  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western 
 Wireless  have  launched  service  in  all  eleven  counties  of  the  CMA  and  have  network  coverage  in  each  county  as  well.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and 
 [REDACTED]  to  Western  Wireless  ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL 
 ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Four  carriers  hold  spectrum  in  every  county  in  the  CMA    Cingular,  Nextel,  Sprint,  and  T-Mobile,  although  T-  Mobile  only  holds  5  MHz  of  spectrum  in  9  of  the  11  counties  in  this  CMA.  Iowa 
 Wireless,  Leap,  Long  Lines,  Midwest  Wireless,  NE  Colorado,  USCC,  and  Verizon  hold  spectrum  in  at  least  two  counties  in  this  CMA.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager 
 lease  agreement,  and  Cingular  is  leasing  10  MHz  of  spectrum  to  NE  Colorado  in  one  county  in  this  CMA.  NE  Colorado,  Nextel,  Sprint,  and  T-  Mobile  are  launched  in  the  CMA,  but  the  network  coverage  of  each 
 of  these  four  carriers  is  less  than  46  percent  of  the  CMA  and  less  than  20  percent  of  the  land  area.  Two  additional  carriers  have  network  coverage  reaching  less  than  five  percent  of  the  population  and  seven 
 percent  of  the  land  area. 
 Conclusion.  The  merger  as  proposed  involves  merging  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers,  and  would  lead  to  a  [REDACTED]  in  this  CMA. 
 No  other  carrier  appears  to  have  the  facilities  in  place  to  respond  quickly  and  effectively  to  any  anticompetitive  actions  by  the  merged  entity.  Thus,  we  conclude  on  the  basis  of  the  record  that  there  is  a 
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 substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  3  -  Knox  CMA. 
 Nebraska  4    Grant  (CMA  536) 
 In  the  Nebraska  4  -  Grant  CMA  (which  has  a  population  of  about  34,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent; 
 combining  these  two  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 ALLTEL  and  Western  Wireless  are  the  cellular  licensees.  After  the  transaction,  the  merged  entity  would  hold  a  total  of  55  to  60  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  has  launched 
 service  in  all  thirteen  counties  of  the  CMA  and  has  network  coverage  in  each  county  as  well.  Western  Wireless  has  launched  service  in  all  but  one  county,  and  has  network  coverage  in  some  or  all  of  the  ten 
 counties  in  the  CMA.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western 
 Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Four  service  providers  also  hold  spectrum  in  all  of  the  counties  in  this  CMA    NE  Colorado,  Nextel,  Sprint,  and  T-  Mobile,  although  T-  Mobile  holds  only  5  MHz  of  spectrum  throughout  the  CMA. 
 Six  carriers  hold  spectrum  in  less  than  13  counties  in  this  CMA    Cingular,  Eezinet  Corporation,  Hamilton  Wireless,  PinPoint  Communications,  Tracy  Corporation  II,  and  Verizon.  Also,  Cingular  and 
 NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing  30  MHz  of  spectrum  to  NE  Colorado  in  three  counties  in  this  CMA.  NE  Colorado,  Nextel,  Sprint,  and  T-  Mobile 
 have  network  coverage  in  this  CMA,  however  none  covers  more  than  20  percent  of  the  population  or  more  than  6  percent  of  the  land  area.  Of  these  carriers  [REDACTED]  has  a  market  share  greater  then 
 [REDACTED]  percent. 
 Conclusion.  The  transaction  as  proposed  effectively  would  lead  to  a  [REDACTED]  in  this  CMA.  No  other  carrier  appears  to  have  the  facilities  in  place  to  respond  quickly  and  effectively  to  any 
 anticompetitive  actions  by  the  merged  entity.  Thus,  we  conclude  on  the  basis  of  the  record  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the 
 Nebraska  4    Grant  CMA. 
 Nebraska  5    Boone  (CMA  537) 
 In  the  Nebraska  5    Boone  CMA  (which  has  a  population  of  about  150,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  if  combined,  the  merged  entity  would  have  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the 
 subscribers,  NE  Colorado  with  [REDACTED]  percent,  and  Nextel  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Boone  CMA  would  rise  to  [REDACTED],  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
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 ALLTEL  and  Western  Wireless  are  the  cellular  licensees.  After  the  transaction,  the  merged  entity  would  hold  a  total  of  55  to  60  MHz  of  spectrum  throughout  the  CMA  (the  levels  vary  by  area  in 
 some  counties  due  to  partitioning  of  PCS  licenses).  ALLTEL  and  Western  Wireless  have  launched  service  in  all  ten  counties  of  the  CMA  and  have  network  coverage  in  each  county  as  well.  Further, 
 ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED] 
 mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Four  carriers    Cingular,  Nextel,  Sprint,  and  T-  Mobile    hold  spectrum  in  all  ten  counties  of  the  CMA,  although  T-  Mobile  holds  only  5  MHz  in  three  counties.  Hamilton  Wireless,  Leap,  NE  Colorado, 
 USCC,  and  Verizon  hold  spectrum  in  fewer  than  all  counties.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing  30  MHz  of  spectrum  to  NE 
 Colorado  in  one  county  and  10  MHz  of  spectrum  in  another  county  in  this  CMA.  Eight  other  carriers  have  network  coverage  in  this  CMA  (Cingular,  Leap,  NE  Colorado,  Nextel,  Sprint,  T-  Mobile,  USCC,  and 
 Verizon),  but  the  network  coverage  of  most  of  these  carriers  is  less  than  ten  percent  of  both  the  population  and  the  land  area  of  the  CMA.  Sprint  and  Nextel  both  have  network  coverage  greater  than  60  percent  of 
 the  CMA  population,  and  less  than  40  percent  of  the  land  area. 
 Conclusion.  The  merger  as  proposed  would  involve  merging  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers.  Furthermore,  the  transaction  would 
 lead  to  [REDACTED]  carrier  having  an  [REDACTED]  market  share  in  this  CMA.  Among  carriers  with  a  market  share  greater  thank  [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of 
 facilities-  based  competitors  from  [REDACTED]  to  [REDACTED].  Other  carriers  do  not  have  facilities  or  coverage  in  a  large  percentage  of  the  CMA.  Thus,  we  conclude  on  the  basis  of  the  record  that  there  is  a 
 substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  5  -  Boone  CMA. 
 Nebraska  6    Keith  (CMA  538) 
 In  the  Nebraska  6    Keith  CMA  (which  has  a  population  of  about  113,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  entities  would  lead  to  a  post-  merger  share  of  [REDACTED].  The  other  carriers  with  market  share  in  this  CMA  are  NE  Colorado,  with  [REDACTED]  percent  of  the  subscribers, 
 and  Sprint  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  this  CMA  would  be  [REDACTED],  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the  character  of 
 competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  They  hold  a  total  of  55  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched  and  provide  network 
 coverage  in  all  five  counties  of  the  CMA.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  reflecting  [REDACTED]  percent  of 
 ALLTELs  ports.  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  reflecting  [REDACTED]  percent  of  Western  Wirelesss  ports. 
 Six  service  providers  also  hold  spectrum  in  all  of  the  counties  in  this  CMA    Cingular,  Hamilton  Wireless,  NE  Colorado,  Nextel,  Sprint,  and  T-  Mobile,  although  T-  Mobile  holds  only  5  MHz  of  spectrum 
 throughout  the  CMA.  Pinpoint  Communications  and  Verizon  hold  spectrum  in  less  than  5  counties  in  this 
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 CMA.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing  30  MHz  of  spectrum  to  NE  Colorado  in  three  counties  in  this  CMA.  NE  Colorado, 
 Nextel,  PinPoint,  Sprint,  T-  Mobile,  and  Verizon  have  network  coverage  in  this  CMA.  However  only  NE  Colorado,  Sprint,  and  T-  Mobiles  networks  cover  more  than  25  percent  of  the  population  and  none  cover 
 more  than  12  percent  of  the  CMA  land  area.  Of  these  carriers  only  [REDACTED]  has  a  market  share  greater  then  [REDACTED]  percent. 
 Conclusion.  The  proposed  merger  would  involve  merging  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers.  Furthermore,  the  transaction  would  lead  to  one 
 carrier  having  an  [REDACTED]  market  share  in  this  CMA.  Among  carriers  with  a  market  share  greater  than  [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-  based 
 competitors  from  [REDACTED]  to  [REDACTED].  In  three  of  the  CMAs  counties  the  merger  would  result  in  three  or  fewer  competitors  providing  network  coverage.  These  counties  reflect  32  percent  of  the 
 CMA  population.  Although  several  carriers  hold  spectrum  and  have  some  network  coverage  in  this  CMA,  one  competitor  has  entered  the  CMA  sufficiently  to  be  an  effective  discipline  on  anticompetitive 
 activity  by  the  merged  entity.  Therefore,  on  the  basis  of  the  record,  we  conclude  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  6  - 
 Keith  CMA. 
 Nebraska  7    Hall  (CMA  539) 
 In  the  Nebraska  7  -  Hall  CMA  (which  has  a  population  of  about  94,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  and  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the 
 subscribers,  NE  Colorado  with  [REDACTED]  percent,  and  Nextel  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  this  CMA  would  be  [REDACTED],  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the  character  of 
 competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  After  the  transaction  the  merged  entity  would  hold  a  total  of  55  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless 
 have  launched  in  all  four  counties  of  the  CMA  and  they  provide  network  coverage  throughout  the  CMA.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to 
 Western  Wireless  reflecting  [REDACTED]  percent  of  ALLTELs  ports.  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  reflecting 
 [REDACTED]  percent  of  Western  Wirelesss  ports. 
 Six  service  providers  also  hold  spectrum  in  all  of  the  counties  in  this  CMA  --  Cingular,  NE  Colorado,  Nextel,  Sprint,  T-  Mobile,  and  Verizon,  although  T-  Mobile  holds  5  MHz  of  spectrum 
 throughout  the  CMA.  Hamilton  Wireless,  Leap,  and  USCC  hold  spectrum  in  two  counties  each.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing 
 30  MHz  of  spectrum  to  NE  Colorado  in  two  counties  and  20  MHz  in  two  counties  in  this  CMA.  NE  Colorado,  Nextel,  and  Sprint  provide  network  coverage  that  reaches  upward  of  90  percent  of  the 
 population  and  two-  thirds  of  the  land  area  in  the  CMA.  However,  the  largest  competitor  to  the  Applicants,  [REDACTED],  has  just  over  a  [REDACTED]  percent  market  share. 
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 Conclusion.  The  proposed  transaction  would  combine  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers,  and  the  merged  entity  would  have  [REDACTED] 
 percent  of  the  subscribers.  Among  carriers  with  a  market  share  greater  than  [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  [REDACTED]  to 
 [REDACTED].  As  a  result  of  the  [REDACTED]  market  share  of  the  merged  entity  and  the  relative  lack  of  competition  to  gain  subscribers  from  other  providers,  we  conclude,  on  the  basis  of  the  record,  that  there 
 is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  7  -  Hall  CMA. 
 Nebraska  8    Chase  (CMA  540) 
 In  the  Nebraska  8  -  Chase  CMA  (which  has  a  population  of  about  56,500),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  only  other  carrier  with  market  share  in  this  CMA  is  PinPoint  Communications  with  [REDACTED] 
 percent  of  the  subscribers.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Chase  CMA  would  be  [REDACTED],  constituting  an  increase  of  [REDACTED]  from  the  current  figure.  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  They  hold  a  total  of  60  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched  service  in  all  12  counties 
 of  the  CMA  and  have  network  coverage  throughout  the  CMA.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting 
 [REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile-  to-mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss 
 ports). 
 Six  service  providers  also  hold  lesser  amounts  of  spectrum  in  all  of  the  counties  in  this  CMA    Cingular,  NE  Colorado,  Nextel,  PinPoint  Communications,  Sprint,  and  T-  Mobile,  although  T-  Mobile 
 holds  only  5  MHz  of  spectrum  throughout  the  CMA.  Also  Hamilton  Wireless  holds  spectrum  in  one  county  out  of  12  in  the  CMA.  Pinpoint  Communications  has  a  network  that  covers  approximately  36 
 percent  of  the  population  and  23  percent  of  land  area  of  the  CMA.  NE  Colorado,  Nextel,  Sprint,  and  T-Mobile  have  networks  that  cover  less  than  20  percent  of  the  population  and  12  percent  of  the  land  area. 
 Conclusion.  The  proposed  transaction  would  combine  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers.  Among  carriers  with  a  market  share  greater  than 
 [REDACTED]  percent  in  the  CMA,  the  merger  would  reduce  the  number  of  facilities-  based  competitors  from  [REDACTED]  to  [REDACTED].  The  merged  entity  would  have  [REDACTED]  percent  of  the 
 subscribers  in  the  CMA  and  11  of  12  counties,  reflecting  88  percent  of  the  population,  would  have  three  or  fewer  providers.  Further,  it  does  not  appear  that  any  other  carrier  has  sufficient  facilities  in  place  to 
 respond  quickly  and  effectively  to  anticompetitive  actions  by  the  merged  entity.  Therefore  we  conclude  on  the  basis  of  the  record  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would 
 lead  to  anticompetitive  harms  in  the  Nebraska  6  -  Keith  CMA. 
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 Nebraska  9    Adams  (CMA  541) 
 In  the  Nebraska  9  -  Adams  CMA  (which  has  a  population  of  about  82,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  subscribers  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the  subscribers, 
 NE  Colorado  with  [REDACTED]  percent,  and  Nextel  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
 The  post-  merger  HHI  in  the  Adams  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  They  hold  a  total  of  55  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched  service  in  all  eight 
 counties  of  the  CMA  and  have  network  coverage  throughout  the  CMA.  Further,  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless 
 ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile-  to-mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss 
 ports). 
 Four  service  providers  also  hold  spectrum  in  all  of  the  counties  in  this  CMA    Cingular,  Nextel,  Sprint,  and  T-  Mobile,  although  T-  Mobile  holds  only  5  MHz  of  spectrum  throughout  the  CMA.  Leap,  NE 
 Colorado,  PinPoint,  USCC,  and  Verizon  hold  lesser  amounts  of  spectrum  in  half  of  the  counties.  Also,  Cingular  and  NE  Colorado  have  entered  into  a  spectrum  manager  lease  agreement,  and  Cingular  is  leasing 
 30  MHz  of  spectrum  to  NE  Colorado  in  one  county  in  the  CMA.  NE  Colorado,  Nextel,  Sprint,  and  T-Mobile  have  network  coverage  in  portions  of  the  CMA,  but  only  NE  Colorados  network  reaches  even 
 half  of  the  CMA  population.  The  other  three  carriers  networks  reach  between  35  to  40  percent  of  the  population,  and  none  of  the  other  four  carriers  reaches  more  than  just  over  20  percent  of  the  land  of  the 
 CMA. 
 Conclusion.  The  proposed  transaction  would  merge  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers.  The  merged  entity  would  have  [REDACTED] 
 percent  of  the  subscribers  in  the  CMA,  and  no  other  carrier  holds  greater  than  a  [REDACTED]  percent  market  share.  In  six  of  the  eight  counties,  reflecting  54  percent  of  the  CMA  population,  this  transaction 
 would  create  a  monopoly  in  terms  of  network  coverage.  It  does  not  appear  that  any  other  carrier  has  sufficient  facilities  in  place  to  respond  quickly  and  effectively  to  anticompetitive  actions  by  the  merged 
 entity.  Therefore,  on  the  basis  of  the  record,  we  conclude  that  there  is  a  substantial  risk  that  the  transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  9    Adams  CMA. 
 Nebraska  10    Cass  (CMA  542) 
 In  the  Nebraska  10  -  Cass  CMA  (which  has  a  population  of  about  87,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  Western  Wireless  has  [REDACTED]  percent  of 
 the  subscribers;  combining  these  two  entities  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  subscribers  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the 
 subscribers,  Nextel  with  [REDACTED]  percent  and  Cingular  with  [REDACTED]  percent.  No  other  service  providers  have  market  share  in  this  CMA. 
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 The  post-  merger  HHI  in  the  Cass  CMA  would  be  [REDACTED]  and  the  change  from  the  current  figure  would  be  [REDACTED].  These  numbers  reflect  that  there  would  be  a  major  change  in  the 
 character  of  competition  after  the  merger. 
 ALLTEL  and  Western  Wireless  are  the  two  cellular  licensees.  They  hold  a  total  of  55  to  60  MHz  of  spectrum  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched  service  in  all  seven 
 counties  of  the  CMA  and  have  network  coverage  throughout  the  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless 
 ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile-  to-mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss 
 ports). 
 Seven  service  providers  also  hold  lesser  amounts  of  spectrum  in  all  seven  counties  in  this  CMA    Cingular,  Leap,  Nextel,  Sprint,  T-  Mobile,  and  USCC,  although  T-  Mobile  holds  only  5  MHz  of  spectrum 
 in  three  of  eight  counties,  and  Verizon  holds  spectrum  in  five  of  the  seven  counties.  All  of  the  carriers  holding  spectrum  have  launched  service  in  at  least  one  county  and  have  some  network  coverage  in  the 
 CMA.  Only  Nextels  network  reaches  more  than  50  percent  of  the  CMA  population,  and  slightly  more  than  40  percent  of  the  land  area  although  it  has  less  than  [REDACTED]  percent  of  the  subscribers.  The 
 remaining  carriers  networks  cover  less  than  35  percent  of  the  population  and  less  than  20  percent  of  the  land  area  of  this  CMA. 
 Conclusion.  The  proposed  transaction  would  involve  merger  of  the  [REDACTED]  and  [REDACTED]  largest  providers  in  the  CMA  in  terms  of  subscribers.  The  merged  entity  would  have 
 [REDACTED]  percent  of  the  subscribers  in  the  CMA,  and  no  other  carrier  holds  greater  than  a  [REDACTED]  percent  market  share.  In  six  of  the  seven  counties,  reflecting  72  percent  of  the  CMA 
 population,  this  transaction  would  result  in  three  or  fewer  carriers  with  network  coverage.  In  four  of  those  counties,  the  transaction  would  represent  a  merger  to  monopoly.  It  does  not  appear  that  any  other 
 carrier  has  sufficient  facilities  in  place  to  respond  quickly  and  effectively  to  anticompetitive  actions  by  the  merged  entity.  Therefore,  on  the  basis  of  the  record,  we  conclude  that  there  is  a  substantial  risk  that  the 
 transaction,  without  conditions,  would  lead  to  anticompetitive  harms  in  the  Nebraska  10    Cass  CMA. 
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 APPENDIX  D  MARKET-  SPECIFIC  ANALYSIS  OF  MARKETS  NOT  INVOLVING  DIVESTITURE 
 Lincoln,  NE  (CMA  172) 
 In  the  Lincoln,  Nebraska,  CMA  (which  consists  of  a  single  county  and  has  a  population  of  about  250,000),  ALLTEL  has  [REDACTED]  percent  of  the  wireless  subscribers  while  Western  Wireless  has 
 [REDACTED]  percent;  if  these  two  entities  were  combined,  this  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  There  are  six  other  carriers  in  this  CMA  with  market  share  greater  than 
 [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Sprint,  with  [REDACTED]  percent  of  the  subscribers,  Cingular  with  [REDACTED]  percent,  Leap  with  [REDACTED]  percent,  and 
 Nextel  with  [REDACTED]  percent.  ALLTELs  and  Western  Wirelesss  market  shares  have  [REDACTED]  from  the  previous  six  month  period  by  approximately  [REDACTED]  and  [REDACTED] 
 percent  respectively,  and  we  believe  that  given  structural  changes  in  this  and  adjacent  markets,  that  it  is  likely  that  the  combined  entitys  market  share  will  continue  to  [REDACTED]  in  the  future. 
 The  post-  merger  HHI  in  the  CMA  would  be  [REDACTED],  with  an  increase  of  [REDACTED]  from  the  current  figure.  Based  on  the  additional  analysis  below,  however,  we  conclude  that  the  level  of 
 competition  in  this  CMA,  post-  transaction,  would  be  more  robust  than  the  HHI  figures  suggest  for  several  reasons. 
 ALLTEL  and  Western  Wireless  are  the  cellular  licensees.  The  merged  entity  would  hold  50  MHz  throughout  the  CMA.  ALLTEL  and  Western  Wireless  have  launched  service  and  have  network  coverage 
 throughout  the  CMA.  ALLTEL  had  a  total  of  [REDACTED]  mobile-  to-  mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  (reflecting  [REDACTED]  percent  of  ALLTELs  ports).  Western 
 Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 Six  additional  licensees  hold  spectrum  throughout  the  entire  CMA.  Cingular  holds  45  MHz  throughout  the  CMA  (almost  as  much  as  the  Applicants  combined),  Sprint  holds  30  MHz,  Leap  holds  15 
 MHz,  T-  Mobile  holds  10  MHz,  USCC  holds  10  MHz,  and  Verizon  holds  10  MHz.  421  All  of  the  licensees  in  the  market,  with  the  exception  of  Verizon,  have  network  coverage  in  this  CMA.  These  six  licensees 
 networks  cover  more  than  90  percent  of  the  population  of  the  CMA.  The  four  nationwide  carriers  (Cingular,  Nextel,  Sprint,  and  T-  Mobile)  have  networks  that  cover  37  to  86  percent  of  the  land  area  of  the 
 CMA.  The  two  other  carriers,  Leap  and  USCC,  cover  approximately  25  percent  and  45  percent  of  the  land  area,  respectively.  Also,  USCC  entered  the  Lincoln  CMA  in  July  2004,  422  and  we  believe  it  could 
 become  an  effective  competitor  to  the  merged  entity  in  a  relatively  short  time  frame.  USCC  offers  service  in  the  Omaha  CMA  (north  and  east  of  Lincoln)  and  it  has  [REDACTED]  market  share  and  coverage  in 
 Iowa.  Further,  USCC  is  known  primarily  as  a  regional  carrier  that  builds  out  and  serves  rural  markets.  For  these  reasons,  we  believe  USCCs  coverage  and  market  share  in  the  Lincoln  CMA  will  grow  over 
 time. 
 421  Throughout  this  analysis,  we  do  not  report  spectrum  holdings  for  Nextel.  Nextels  spectrum  has  been  licensed  in 
 a  fashion  different  than  that  for  the  other  carriers  considered  here,  its  spectrum  holdings  are  significantly  more  difficult  to  identify  for  individual  local  areas,  and  its  holdings  may  be  changing  in  the  relatively  near  future  as  a 
 result  of  other  regulatory  proceedings.  Nationwide,  Nextel  holds  an  average  of  almost  20  megahertz  of  bandwidth.  For  large  markets,  we  presume  than  Nextels  capacity  is  20  megahertz.  For  smaller  markets,  we  judge  Nextels 
 potential  competitive  influence  by  reviewing  coverage  maps  and  current  market  shares.  422 
 See  USCC  Corporate  Press  Release,  U.  S.  Cellular  Enters  Lincoln  Market,  July  13,  2004. 
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 Despite  the  number  of  firms  in  this  market  that  have  networks  that  cover  the  majority  of  the  population,  ALLTEL  and  Western  Wireless  continue  to  hold  a  [REDACTED]  share  of  the  market.  The 
 persistence  of  the  two  firms  first-  mover  advantage  may  be,  at  least  in  part,  explained  by  their  [REDACTED]  market  shares  in  adjacent  CMAs.  Customers  demand  coverage  over  a  combination  of 
 CMAs  in  eastern  and  central  Nebraska,  423  and  customers  in  the  Lincoln  CMA  subscribe  to  either  ALLTEL  or  Western  Wireless  in  order  to  obtain  facilities-  based  coverage  in  adjacent  CMAs.  There  are 
 nine  CMA  markets  in  eastern  and  central  Nebraska  for  which  divestiture  is  being  required,  and  these  nine  markets  are  to  be  sold  to  a  single  buyer.  424  Given  that  many  customers  demand  coverage  over  a 
 combination  of  CMAs,  and  the  other  current  licensees  in  the  Lincoln,  NE  CMA  have  already  invested  in  that  market,  we  believe  it  is  likely  that  one  of  the  other  current  licensees  will  purchase  these  divestiture 
 assets  in  the  neighboring  markets.  If  one  of  these  other  licensees  from  the  Lincoln,  NE  CMA  purchases  these  divestiture  assets,  it  is  likely  that  this  carrier  would  gain  market  share  rapidly  in  the  Lincoln  CMA 
 because  it  will  be  able  to  offer  extensive  facilities-  based  coverage  throughout  eastern  and  central  Nebraska. 
 Conclusion.  Although  the  transaction  would  lead  to  a  [REDACTED]  market  share  for  the  merged  entity,  six  other  carriers,  including  four  nationwide  carriers  have  extensive  network  coverage  that 
 should  enable  them  to  respond  effectively  to  anticompetitive  actions  by  the  merged  entity.  The  proposed  transaction,  which  would  combine  the  [REDACTED]  and  [REDACTED]  largest  carriers  in  terms  of 
 market  share,  would  only  decrease  the  number  of  carriers  with  a  greater  than  [REDACTED]  percent  share  from  [REDACTED]  to  [REDACTED].  Further,  USCC  entered  the  market  only  a  year  ago,  and  may  have 
 eroded  the  Applicants  market  share.  Also  six  out  of  seven  licensees  have  networks  that  cover  more  than  90  percent  of  the  CMA  population.  These  carriers  also  appear  to  have  sufficient  capacity  to  absorb 
 customers  if  the  merged  entity  were  to  raise  price  or  reduce  service  following  the  transaction.  In  addition,  while  Verizon  does  not  have  network  coverage  in  the  Lincoln  CMA,  it  holds  spectrum  throughout  and  has 
 already  launched  service  in  adjacent  CMAs;  it  would  have  an  incentive  to  build  out  its  network  and  launch  service  if  the  Lincoln  CMA  became  less  competitive.  Because  several  carriers  have  the  ability  to 
 respond  to  anticompetitive  actions  by  the  merged  entity,  it  appears  that  the  transaction  is  not  likely  to  result  in  competitive  harms  in  the  Lincoln,  NE,  CMA.  Finally,  the  divestitures  required  in  the  nine 
 Nebraska  CMAs  may  also  increase  the  competitiveness  of  the  Lincoln  CMA.  If  one  of  the  carriers  that  holds  a  license  in  this  CMA  acquires  the  Nebraska  divestiture  markets,  it  may  become  a  more  effective 
 competitor  to  the  merged  entity  because  it  will  be  able  to  offer  extensive  facilities-  based  coverage  throughout  eastern  and  central  Nebraska. 
 Missouri  9    Bates  (CMA  512) 
 In  the  Missouri  9    Bates  CMA  (which  has  a  population  of  about  82,500),  Western  Wireless  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  ALLTEL  has  [REDACTED]  percent;  if 
 combined,  these  two  entities  would  have  a  post-  merger  share  of  [REDACTED]  percent.  Even  after  the  transaction,  Cingular  would  continue  to  have  the  [REDACTED]  market  share  with  [REDACTED]  percent 
 of  the  CMAs  wireless  subscribers.  In  addition,  T-  Mobile  has  a  [REDACTED]  percent  market  share,  and  Sprint  has  a  [REDACTED]  percent  share. 
 The  post-  merger  HHI  in  the  CMA  would  be  [REDACTED]  and  the  change  from  the  current 
 423  DOJ  Competitive  Impact  Statement  at  12-  13. 
 424  See  DOJ  Proposed  Final  Judgment  at  10. 
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 figure  would  be  [REDACTED].  As  explained  below,  the  level  of  competition  in  this  CMA,  post-transaction,  would  be  more  robust  than  the  HHI  figures  suggest  for  several  reasons. 
 ALLTEL  holds  35  MHz  of  spectrum  in  only  two  of  the  five  counties  in  this  CMA.  Western  Wireless  holds  30  to  35  MHz  of  spectrum  throughout  the  CMA.  Together,  the  merged  entity  would  hold 
 70  MHz  in  one  county,  65  MHz  in  a  second,  and  35  MHz  in  the  remaining  three  counties.  ALLTEL  and  Western  Wireless  have  network  coverage  throughout  their  licensed  service  areas.  ALLTEL  had  a  total  of 
 [REDACTED]  mobile-  to-  mobile  ports  out  in  2004.  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and  [REDACTED]  to  ALLTEL. 
 Cingular  holds  cellular  spectrum  in  the  three  counties  where  ALLTEL  holds  no  spectrum  and  its  spectrum  holdings  in  this  CMA  range  from  20  to  45  MHz.  Sprint  and  T-  Mobile  hold  spectrum  in  every 
 county  of  the  CMA,  and  Leap,  USCC,  and  Verizon  hold  spectrum  in  some  of  the  counties  in  the  CMA.  425  Cingular  has  network  coverage  reaching  83  percent  of  the  population  and  over  75  percent  of  the  land 
 area  of  the  CMA.  Sprint  and  T-  Mobile  networks  cover  more  than  50  percent  of  the  population  and  25  percent  of  the  land  area.  Nextels  network  covers  30  percent  of  the  population  and  14  percent  of  the  land 
 area,  while  Verizon  and  USCC  cover  less  than  two  percent  of  the  population  and  less  than  three  percent  of  the  land  area. 
 Conclusion.  Although  the  transaction  would  lead  to  a  [REDACTED]  market  share  for  the  merged  entity  in  the  CMA,  four  other  competing  carriers  already  have  extensive  network  coverage  in  this 
 CMA.  Three  of  the  carriers    [REDACTED]  have  [REDACTED]  subscriber  share  that  should  enable  them  to  respond  effectively  to  anticompetitive  actions  by  the  merged  entity,  and  this  transaction  will 
 decrease  the  number  of  carriers  with  a  greater  than  [REDACTED]  percent  share  from  [REDACTED]  to  [REDACTED].  While  this  transaction  would  combine  the  number  [REDACTED]  and  the  number 
 [REDACTED]  firm  in  terms  of  market  share,  the  other  carriers  in  the  CMA  appear  to  have  sufficient  capacity  to  absorb  customers  if  the  merged  entity  were  to  raise  prices  or  reduce  service  following  the 
 transaction.  As  a  result,  it  appears  that  the  transaction  is  not  likely  to  result  in  competitive  harms  in  the  Missouri  Bates  CMA. 
 Texas  7    Fannin  (CMA  658) 
 In  the  Texas  7    Fannin  CMA  (which  has  population  of  more  than  390,000),  Western  Wireless  has  [REDACTED]  percent  of  the  wireless  subscribers,  while  ALLTEL  has  [REDACTED]  percent;  if 
 these  entities  were  combined,  it  would  lead  to  a  post-  merger  share  of  [REDACTED]  percent.  The  other  carriers  with  market  share  in  this  CMA  are  Cingular  with  [REDACTED]  percent  of  the  subscribers, 
 Sprint,  with  [REDACTED]  percent,  Verizon  with  [REDACTED]  percent,  Nextel  with  [REDACTED]  percent,  and  T-  Mobile  with  [REDACTED]  percent. 
 The  post-  merger  HHI  in  this  CMA  would  be  [REDACTED],  a  change  of  [REDACTED]  from  the  current  figure.  Based  on  the  additional  analysis  below,  however,  we  conclude  that  the  level  of 
 competition  in  this  CMA,  post-  transaction,  would  be  more  robust  than  the  HHI  figures  suggest  for  several  reasons. 
 ALLTEL  does  not  hold  spectrum  in  nine  of  the  15  counties  in  Texas  7    Fannin.  In  the  remaining  six  counties  it  holds  35  MHz  in  one  county  and  25  MHz  in  five  others.  Western  Wireless 
 holds  varying  amounts  of  spectrum  throughout  the  CMA.  The  merged  entity  would  hold  70  MHz  in  two 
 425  These  figures  incorporate  spectrum  won  during  the  recent  Auction  No.  58. 
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 counties,  60  MHz  in  four,  45  in  two,  35  MHz  in  six,  and  30  MHz  in  one.  ALLTEL  and  Western  Wireless  have  network  coverage  throughout  their  licensed  service  areas,  therefore  the  facilities-  based  overlap  area 
 for  the  merged  entity  is  limited  to  the  nine  counties  where  ALLTEL  holds  spectrum,  and  these  nine  counties  reflect  only  26  percent  of  the  CMA  population.  ALLTEL  had  a  total  of  [REDACTED]  mobile-to- 
 mobile  ports  out  in  2004  and  [REDACTED]  to  Western  Wireless  ([  REDACTED]  percent  of  ALLTELs  ports).  Western  Wireless  had  a  total  of  [REDACTED]  mobile  to  mobile  ports  out  in  2004  and 
 [REDACTED]  to  ALLTEL  ([  REDACTED]  percent  of  Western  Wirelesss  ports). 
 In  addition  to  the  Applicants,  Cingular,  Sprint,  and  Verizon  hold  spectrum  throughout  the  entire  CMA.  Of  these,  Cingular  holds  almost  as  much  spectrum,  ranging  from  20  to  65  MHz,  as  the  merged 
 entity  would  hold.  T-  Mobile  holds  spectrum  in  12  counties,  although  in  one  of  these  counties  it  only  holds  5  MHz  of  spectrum.  Three  carriers    Peoples  Wireless,  ETEX,  and  Lamar  Cellular    hold  cellular 
 licenses  in  parts  of  some  counties  in  the  CMA.  Finally,  Choice  Wireless  holds  spectrum  in  one  county  in  this  CMA. 
 Four  of  the  nationwide  carriers  (Cingular,  Nextel,  Sprint,  and  Verizon)  have  networks  that  cover  over  40  percent  of  the  population  and  over  25  percent  of  the  land  area  of  the  CMA.  In  addition,  T-Mobiles 
 network  covers  slightly  less  than  30  percent  of  the  population  and  14  percent  of  the  land  area  of  the  CMA.  Also  Lamar  Cellular  and  Peoples  have  networks  that  cover  less  than  13  percent  of  the 
 population  and  less  than  12  percent  of  the  land  area  of  the  CMA.  In  the  overlap  area  Nextel  and  Sprint  cover  more  than  40  percent  of  the  population  and  more  than  25  percent  of  the  land  area,  while  Cingular, 
 Peoples,  and  Verizon  cover  more  than  20  percent  of  the  population  and  between  13  and  25  percent  of  the  land  area.  However,  there  are  three  counties  where  ALLTEL  offers  facilities-  based  service  where  this  is  a 
 three  to  two  or  a  two  to  one  deal,  and  these  counties  reflect  only  14  percent  of  the  CMA  population. 
 Conclusion.  Although  the  transaction  would  lead  to  a  [REDACTED]  market  share  for  Applicants  in  the  CMA,  four  of  the  nationwide  carriers  have  extensive  network  coverage  throughout  the  CMA. 
 While  this  transaction,  which  would  combine  the  number  [REDACTED]  and  the  number  [REDACTED]  firm  in  terms  of  market  share,  would  decrease  the  number  of  carriers  with  a  greater  than  [REDACTED] 
 percent  share  from  [REDACTED]  to  [REDACTED],  the  other  carriers  in  the  CMA  appear  to  have  sufficient  capacity  to  absorb  customers  if  the  merged  entity  raises  prices  or  reduces  service  following  the 
 transaction.  We  note  that  three  competing  carriers    [REDACTED]  have  [REDACTED]  subscriber  share  that  should  enable  them  to  respond  effectively  to  anticompetitive  actions  by  the  merged  entity. 
 These  carriers  appear  to  have  sufficient  capacity  to  absorb  customers  if  the  merged  entity  were  to  raise  prices  or  reduce  service  following  the  transaction.  As  a  result,  it  appears  that  the  transaction  is  not  likely 
 to  result  in  competitive  harms  in  the  Texas  7  -  Fannin,  CMA. 
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 STATEMENT  OF  COMMISSIONER  KATHLEEN  Q.  ABERNATHY 
 Re:  Applications  of  Western  Wireless  Corporation  and  ALLTEL  Corporation  For  Consent  to  Transfer  Control  of  Licenses  and  Authorizations,  WT  Docket  No.  05-  50,  Memorandum  Opinion  and 
 Order. 
 I  fully  support  todays  decision  to  allow  the  creation  of  what  I  believe  will  be  a  stronger  wireless  competitor  in  rural  areas    a  company  that  will  be  uniquely  situated  to  help  speed  the  deployment  of 
 advanced  wireless  services  to  an  increased  number  of  consumers  throughout  America.  Approval  of  this  transaction,  with  the  conditions  we  have  imposed,  is  consistent  with  this  Commissions  commitment  to 
 rural  America  and  to  ensuring  that  consumers  everywhere  have  access  to  advanced  services. 
 While  I  appreciate  the  concerns  raised  with  respect  to  the  Applicants  ability  to  comply  with  the  E911  deployment  rules,  I  do  not  believe  that  such  concerns  are  specific  to  this  transaction.  Making  sure 
 consumers  have  access  to  E911  services  remains  one  of  my    and  the  Commissions    top  priorities.  But  any  concerns  regarding  compliance  with  future  deadlines  are  more  appropriately  addressed  in  the  context 
 of  either  specific  requests  for  waiver  or  industry-  wide  requests  for  relief  of  our  E911  rules. 
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 STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS 
 RE:  Applications  of  Western  Wireless  Corporation  and  ALLTEL  Corporation  For  Consent  to  Transfer  of  Control  of  Licenses  and  Authorizations  (Memorandum  Opinion  &  Order). 
 The  data  compiled  by  FCC  staff  indicates  that  effectuation  of  this  merger  will  likely  leave  an  acceptable  level  of  wireless  market  competition  in  most  affected  geographic  areas.  The  applicants 
 networks  overlap  in  only  27  markets  nationwide.  The  Commission  requires  divestiture  of  nearly  60%  of  these  markets,  where  the  merger  would  have  undermined  competition. 
 In  most  of  the  remaining  overlap  markets  four  or  more  able  competitors  will  continue  to  compete  post-  merger.  In  the  rest  the  merger  will  not  substantially  change  the  competitive  dynamic  of  the  market  at 
 issue  because  one  applicant  has  little  or  no  market  share.  I  am  concerned  that  in  a  few  markets,  the  market  shares  of  remaining  competitors  are  small  compared  with  that  of  the  merged  entity.  But  these 
 competitors  have  spectrum  resources  and  built-  out  facilities  that  should  enable  them  to  take  customers  from  the  merged  entity  should  the  latter  raise  prices  or  reduce  quality.  But  if  we  receive  evidence  in  the 
 future  that  smaller  competitors  cannot  respond  in  this  way  because  of  the  power  of  the  market-  share  leader,  the  Commission  will  have  to  reconsider  its  reliance  on  this  theory,  which  remains  untested  in  the 
 new  wireless  environment. 
 This  market-  by-  market  analysis  is  only  one  part  of  our  merger  review  process.  The  FCC  must  also  judge  whether  the  merged  entity  will  act  in  the  public  interest  and  whether  the  applicants  have  the 
 requisite  citizenship,  character,  financial,  technical,  and  other  qualifications.  Compliance  with  public  safety  protections  is  central  to  the  public  interest  and  to  a  companys  qualifications.  Americans 
 increasingly  rely  on  mobile  phones  for  emergency  calls.  Therefore  compliance  with  our  911  rules  is  of  the  utmost  importance,  especially  at  a  time  when  homeland  security  must  be  a  top  priority  for  both  our 
 government  and  our  companies  and  the  threats  to  public  safety  are  again  so  manifest.  FCC  Rules  require  that  by  December  31,  2005  ninety-  five  percent  of  the  applicants  customers  must  have  handsets  that  can 
 locate  a  caller  in  an  emergency.  I  am  deeply  troubled  by  the  applicants  recent  admission  that  they  will  likely  fail  to  meet  this  responsibility  and  that  they  may,  in  fact,  miss  our  public  safety  deadline  by  two 
 years. 
 The  Order  states  that  if  the  company  fails  to  meet  its  E-  911  deployment  responsibilities  the  Commission  will  not  hesitate  to  take  enforcement  action.  While  that  is  positive,  I  believe  we  should 
 have  gone  beyond  this  assertion  to  insist  that  the  merged  company  immediately  get  itself  on  a  path  to  full  public  safety  compliance.  Because  we  do  not,  we  could  lose  valuable  time  and  E-  911  deployment  might 
 suffer.  I  am  disappointed  that  we  do  not  do  more  today  to  ensure  compliance  with  our  public  safety  deadline. 
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 Federal  Communications  Commission  FCC  05-  138 
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 STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 
 Re:  Applications  of  Western  Wireless  Corporation  and  ALLTEL  Corporation  For  Consent  to  Transfer  of  Control  of  Licenses  and  Authorizations;  WT  Docket  No.  05-  50 
 Western  Wireless  and  ALLTEL  have  demonstrated  a  sincere  commitment  to  providing  the  latest  wireless  technologies  and  services  to  traditionally  underserved  customers,  particularly  those  in  rural 
 America.  Coming  from  South  Dakota,  I  am  well  aware  of  the  challenges  associated  with  providing  mobile  wireless  services  in  the  Great  Plains  and  other  less  populated  areas  of  the  country.  I  fully  approve 
 this  merger  because  I  believe  it  will  allow  ALLTEL  to  be  a  stronger,  more  vibrant  carrier  capable  of  providing  more  comprehensive  and  advanced  mobile  wireless  services  to  its  customers,  no  matter  where 
 they  live. 
 Of  course,  a  merger  like  this  requires  a  thorough  public  interest  review  to  ensure  that  we  do  not  inadvertently  disadvantage  the  very  communities  we  are  trying  to  protect.  An  unchecked  merger  could 
 harm  the  competitive  environment  in  some  communities  in  ways  that  the  market  is  unlikely  to  overcome.  I  applaud  the  Commission  staff  for  conducting  a  thorough  analysis  of  the  markets  potentially  affected  by 
 the  merger,  and  I  fully  support  our  decision  to  require  divestiture  in  the  markets  identified  in  our  Memorandum  Opinion  and  Order. 
 I  do  have  one  area  of  concern  that  is  associated  more  with  the  overall  trend  of  consolidation  in  the  mobile  wireless  industry  rather  than  the  specific  merger  before  us.  During  the  past  year,  we  have 
 regularly  heard  from  smaller  mobile  wireless  companies  that  are  concerned  about  their  ability  to  negotiate  automatic  roaming  contracts  with  the  larger  regional  and  nationwide  carriers.  These  concerns  also  came 
 up  both  in  the  record  of  this  merger  as  well  as  in  the  Cingular-  AT&  T  Wireless  acquisition  completed  last  year. 
 I  think  the  time  is  right  for  the  Commission  to  accumulate  a  full  record  on  the  roaming  issue  to  determine  what,  if  any,  action  may  be  needed.  So,  I  am  very  pleased  that  the  Chairman  has  agreed  to 
 initiate  shortly  a  proceeding  that  will  explore  the  issue  of  roaming  and  the  effects  of  consolidation  on  the  ability  of  smaller  carriers  to  negotiate  access  to  larger  networks.  This  is  a  positive  development,  and  I  am 
 pleased  that  we  can  begin  a  formal  review  of  this  matter  in  the  very  near  term. 
 Finally,  there  has  been  some  good  discussion  during  the  last  few  days  of  our  deliberation  regarding  the  merger  and  its  possible  impact  on  ALLTELs  compliance  with  the  upcoming  E911  handset 
 penetration  deadline.  I  appreciate  the  efforts  of  Commissioner  Copps  in  raising  this  important  issue.  As  the  mobile  wireless  industry  is  well  aware,  the  entire  Commission  takes  E911  compliance  very  seriously 
 particularly  given  the  increasingly  important  role  of  E911  in  our  nations  homeland  security  efforts. 
 While  I  am  troubled  by  ALLTELs  apparent  difficulty  in  reaching  the  95%  penetration  level  by  December  31,  2005,  I  acknowledge  the  recent  commitment  to  timely  address  these  challenges  and  to 
 ensure  that  the  merged  company  remains  on  a  path  to  full  compliance.  Also,  the  record  contains  a  number  of  support  letters  on  ALLTELs  behalf  from  public  safety  and  governmental  organizations 
 including  filings  from  officials  leading  the  state  government  wireless  E911  deployment  efforts  in  North  Carolina,  South  Carolina,  and  Virginia.  Ultimately,  I  believe  that  issues  regarding  ALLTELs  handset 
 compliance  problem  can  be  addressed  through  our  existing  rules  and  regulations,  an  area  in  which  we  have  not  hesitated  to  take  specific  enforcement  action  when  appropriate  during  the  past  several  years. 
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