Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices 8273

1This comment is attached hereto as Exhibit A.

V

Remedies Available to Private Litigants

Section 4 of the Clayton Act (15

U.S.C. § 15) provides that any person

who has been injured as a result of

conduct prohibited by the antitrust laws

may bring suit in federal court to

recover three times the damages

suffered, as well as costs and reasonable

attorney fees. Under the provisions of

Section 5(a) (15 U.S.C. § 16(a)), this

Consent Decree has no prima facie effect

in the lawsuits which may be brought

against the defendants.

VI

Procedures Available for Modification of

the Proposed Consent Decree

As provided by the Antitrust

Procedures and Penalties Act, any

person believing that the proposed

Consent Decree should be modified may

submit written comments to Christopher

S. Crook, Acting Chief, San Francisco

Office, U.S. Department of Justice,

Antitrust Division, 450 Golden Gate

Avenue, Box 36046, Room 10–0101, San

Francisco, California 94012, within the

60-day period provided by the Act. The

comments and the Government’s

responses to them will be filed with the

Court and published in the Federal

Register. All comments will be given

due consideration by the Department of

Justice, which remains free to withdraw

its consent to the proposed Consent

Decree at any time period to its entry if

it should determine that some

modification of the Consent Decree is

necessary to the public interest. The

proposed Consent Decree itself provides

that the Court will retain jurisdiction

over this action, and that the parties

may apply to the Court for such orders

as may be necessary or appropriate for

the modification or enforcement of the

Consent Decree.

VII

Determinative Documents

No materials and documents of the

type described in Section 2(b) of the

Antitrust Procedures and Penalties Act

(15 U.S.C. § 16(b)) were considered in

formulating this proposed Consent

Decree. Consequently, none are filed

herewith.

Dated: February 6, 1997.

Christopher S. Crook,

Richard B. Cohen,

Attorneys, Antitrust Division, U.S.

Department of Justice.

[FR Doc. 97–4389 Filed 2–21–97; 8:45 am]

BILLING CODE 4410–11–M

Antitrust Division

U.S. v. US WEST, Inc. and Continental

Cablevision, Inc.; Public Comments

and Response on Proposed Final

Judgment

Pursuant to the Antitrust Procedures

and Penalties Act, 15 U.S.C. § 16(c)–(h),

the United States publishes below the

comments received on the proposed

final judgment in U.S. v. US WEST, Inc.

and Continental Cablevision, Inc., Civil

Action No. 96–2529 TPS, filed in the

United States District Court for the

District of Columbia, together with the

United States’ response to that

comment.

Copies of the comments and response

to the comments are available for

inspection and copying in Room 215 of

the U.S. Department of Justice, Antitrust

Division, 325 7th Street, N.W.,

Washington, D.C. 20530 (telephone:

(202) 514–2481), and at the Office of the

Clerk of the United States District Court

for the District of Columbia. Copies of

these materials may be obtained upon

request and payment of a copying fee.

Constance K. Robinson,

Director of Operations.

In The United States District Court for

The District of Columbia

United States of America, Plaintiff, v. US

West, Inc. and Continental Cablevision, Inc.,

Defendants.

[No. 96–2529 TPS (Antitrust)]

Comments Relating to Proposed Final

Judgment and Response of The United

States to Comments

Pursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act

(15 U.S.C. § 16(b)–(h) (‘‘APPA’’), the

United States of America hereby files

the public comments it has received

relating to the proposed Final Judgment

in this civil antitrust proceeding, and

herein responds to the public

comments. The United States has

carefully reviewed the public comments

on the proposed Final Judgment and

remains convinced that entry of the

proposed Final Judgment is in the

public interest.

I.—Background

This action was commenced on

November 5, 1996, when the United

States filed a civil antitrust complaint

under Section 15 of the Clayton Act, as

amended, 15 U.S.C. § 25, alleging that

the proposed acquisition of Continental

Cablevision, Inc. (‘‘Continental’’) by US

WEST, Inc. (‘‘US WEST’’), would violate

Section 7 of the Clayton Act, as

amended, 15 U.S.C. § 18. US WEST is

the dominant provider of local

telecommunications services, including

dedicated services, within its telephone

service area in the States of Arizona,

Colorado, Idaho, Iowa, Minnesota,

Montana, Nebraska, New Mexico, North

Dakota, Oregon, South Dakota, Utah,

Washington, and Wyoming. At the time

the acquisition was announced,

Continental owned 20% of Teleport

Communications Group, Inc. (‘‘TCG’’), a

competitive access provider (‘‘CAP’’)

providing dedicated services in various

cities across the nation, including

Denver, Omaha, Phoenix and Seattle.

The complaint alleges that US WEST’s

acquisition of Continental’s interest in

TCG would substantially lessen

competition in the sale of dedicated

services in the areas within Denver,

Omaha, Phoenix and Seattle in which

TCG provides such services.

Contemporaneously with filing its

Complaint, the United States submitted

a proposed Final Judgment, a

Competitive Impact Statement and a

Stipulation signed by the defendants

consenting to entry of the proposed

Final Judgment. The proposed Final

Judgment orders US WEST to divest the

TCG Common Stock by certain specified

dates and contains other provisions

designed to bar US WEST’s access to

highly sensitive TCG business

information, and to treat TCG as a

passive business investment. The

Competitive Impact Statement explains

the basis for the Complaint and the

reasons why entry of the proposed Final

Judgment would be in the public

interest. In the Stipulation, the

defendants and the United States

consented to entry of the proposed Final

Judgment by the Court after completion

of the procedures required by the APPA.

II.—Compliance With the APPA

The APPA requires a sixty-day period

for the submission of public comments

on the proposed Final Judgment, 15

U.S.C. 16(b). In this case, the sixty-day

comment period commenced on

November 18, 1996, and terminated on

January 16, 1997. During this period, the

United States received only one

comment relating to the proposed Final

Judgment.1 The United States herein

responds to this comment. Upon

publication of this comment and the

following response of the United States

to this comment in the Federal Register

pursuant to 15 U.S.C. 16(d) of the

APPA, the procedures required by the

APPA prior to entry of the proposed

Final Judgment will be completed, and

the Court may enter the proposed Final
8274 Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices

Judgment. The United States will move

the Court for entry of the proposed Final

Judgment after the public comment and

this response of the United States have

been published in the Federal Register.

III.—Response to Public Comments

The only comment received by the

United States was filed by TCG. TCG

does not object to the substantive

provisions of the proposed Final

Judgment. In particular, TCG does not

object to the requirement that US WEST

divest its interest in TCG nor to the

timing or manner in which such

divestiture must be carried out. Indeed,

TCG’s comments do not relate to either

the anticompetitive consequences of the

acquisition or the adequacy of relief

provided by the proposed Final

Judgment to remedy the antitrust

violations alleged in the Complaint. The

only objection that TCG raises with

respect to the proposed Final Judgment

relates to the provision requiring US

WEST to deliver to the United States

periodic affidavits setting forth the fact

and manner of US WEST’s efforts to

comply with the divestiture provisions

of the proposed Final Judgment.

Because these affidavits are likely to

contain sensitive business information

relating to the sale or attempted sale of

TCG Common Stock, TCG requests that

the proposed Final Judgment be

modified so as to require that such

affidavits ‘‘be submitted confidentially

to the plaintiff and not filed in the

public docket of the Court.’’ Letter from

W. Terrell Wingfield to Donald J.

Russell, dated December 18, 1996,

Exhibit A at 2.

The United States shares TCG’s

concerns about the potential disclosure

of highly confidential and sensitive

business information. For the following

reasons, however, the United States

does not believe that a modification of

the proposed Final Judgment is

necessary to protect affidavits

containing such information. First, it is

not the standard practice of the United

States to voluntarily disclose affidavits

submitted pursuant to a consent decree.

Second, there are only two situations in

which disclosure could occur: (1) If the

United States is ordered or otherwise

finds it necessary to file such affidavits

on the public docket in any legal

proceeding; and/or (2) If a request is

made under the Freedom of Information

Act, 5 U.S.C. 552 et seq. (‘‘FOIA’’), and

the United States determines that any

such affidavit does not fall into one of

the FOIA exemptions to disclosure.

In the event that the United States

receives an order, a subpoena and/or

otherwise intends to use such

information in any legal proceeding,

Section IX.D of the proposed Final

Judgment requires the United States to

give the defendants ten (10) calendar

days notice prior to divulging any

material to which a claim of protection

may be asserted under Rule 26(c)(7) of

the Federal Rules of Civil Procedure and

which the defendants have marked as

being, ‘‘Subject to claim of protection

under Rule 26(c)(7) of the Federal Rules

of Civil Procedure.’’

In the event that the United States

determines that any such affidavit is not

exempt from FOIA, then the United

States would follow the procedures set

forth in 28 CFR 16.7. Section 16.7

provides, in relevant part, that the

United States:

shall, to the extent permitted by law,

provide a submitter [of confidential and

sensitive business information] with prompt

written notice of a Freedom of Information

Act request or administrative appeal

encompassing its business information.

* * * in order to afford the submitter an

opportunity to object to disclosure * * *

Such written notice shall either describe the

exact nature of the business information

requested or provide copies of the records or

portions thereof containing the business

information.

16 CFR 16.7(c). Section 16.7(b) defines

a submitter as ‘‘any person or entity

who provides business information,

directly or indirectly to the

Department.’’ Absent exigent

circumstances, the United States

generally gives the submitter ten (10)

calendar days notice of a request or

intention to disclose the business

information so as to allow the submitter

sufficient time to file an objection to

disclosure or otherwise move to protect

the information. TCG has been informed

of the foregoing protections and has

authorized the United States to inform

the Court that these protections are

adequate to address TCG’s concerns.

Given these facts, the United States does

not believe that a modification of the

proposed Final Judgment is warranted

in the public interest.

IV.—Standard of Review

Pursuant to 15 U.S.C. § 16(e), the

proposed Modified Final Judgment

cannot be entered unless the Court

determines that it is in the public

interest. The focus of this determination

is whether the relief provided by the

proposed Modified Final Judgment is

adequate to remedy the antitrust

violations alleged in the Complaint.

United States v. Bechtel Corp., 648 F.2d

660, 665–66 (9th Cir.), cert. denied. 454

U.S. 1083 (1981), quoted with approval

in United States v. Microsoft Corp., 56

F.3d 1448, 1457–58, see also 56 F.3d at

1459–60 (D.C. Cir. 1995). In the recent

Microsoft decision by the United States

Court of Appeals for the District of

Columbia Circuit, which reversed the

district court’s refusal to enter an

antitrust consent decree proposed by the

United States, the court of appeals held

that the provision in Section 16(e)(1) of

the Tunney Act allowing the district

court to consider ‘‘any other

considerations bearing upon the

adequacy of such judgment,‘‘ does not

authorize extensive inquiry into the

conduct of the case. 56 F.3d at 1458–60.

The court of appeals concluded that

‘‘Congress did not mean for a district

judge to construct his own hypothetical

case and then evaluate the decree

against that case.’’ Id. To the contrary,

‘‘[t]he court’s authority to review the

decree depends entirely on the

government’s exercising its

prosecutorial discretion by bringing a

case in the first place,’’ and so the

district court ‘‘is only authorized to

review the decree itself,’’ not other

matters that the government might have

but did not pursue. Id.

Under the public interest standard,

the Court’s role is limited to

determining whether the proposed

decree is within the ‘‘zone of

settlements’’ consistent with the public

interest, not whether the settlement

diverges from the Court’s view of what

would best serve the public interest.

United States v. Western Electric Co.

993 F.2d 1572, 1576 (quoting United

States v. Western Electric Co., 900 F.2d

283, 307 (D.C. Cir. 1990)); United States

v. Microsoft Corp., 56 F.3d at 1460.

Moreover, the Court should give a

request for entry of a proposed decree

even more deference that a request by a

party to an existing decree for approval

of a modification, for in dealing with an

initial settlement the Court is unlikely

to have substantial familiarity with the

market involved. United States v.

Microsoft Corp., 56 F.3d at 1460–61.

Absent a showing of corrupt failure of the

government to discharge its duty, the Court,

in making its public interest finding, should

* * * carefully consider the explanations of

the government in the competitive impact

statement and its responses to comments in

order to determine whether those

explanations are reasonable under the

circumstances.

United States v. Mid-America

Dairymen, Inc., 1977–1 Trade Cas.

¶ 61,508, at 71,980 (W.D. Mo. 1977). The

Court may reject the agreement of the

parties as to how the public interest is

best served only if it has ‘‘exceptional

confidence that adverse antitrust

consequence will result.* * *’’ United

States v. Western Electric Co., 993 F.2d

at 1577 (D.C. Cir.), cert. denied, 114 S.

Ct. 487 (1993), quoted with approval in
Federal Register / Vol. 62, No. 36 / Monday, February 24, 1997 / Notices 8275

United States v. Microsoft Corp., 56 F.3d

at 1460.

V.—Conclusion

After careful consideration of the

comments and for the reasons stated

herein and in the Competitive Impact

Statement, the United States continues

to believe that the proposed Final

Judgment is adequate to remedy the

antitrust violations alleged in the

Complaint. There has been no allegation

or showing that the proposed settlement

constitutes an abuse of the United

States’ discretion nor that it is

inconsistent with the public interest.

Accordingly, entry of the proposed

Final Judgment should be deemed to be

in the public interest.

Dated: February 7, 1997.

Respectfully submitted,

Yvette Benguerel,

Attorney, Telecommunications Task Force,

U.S. Department of Justice, Antitrust Division,

555 4th Street, N.W., Room 8104, Washington,

D.C. 20001, (202) 514–5808.

[December 18, 1996—Via Federal Express]

Donald J. Russell, Esq.,

Chief, Telecommunications Task Force,

Antitrust Division, U.S. Department of

Justice, Room 8104, 555 4th Street, N.W.,

Washington, D.C. 20001.

Re: United States of America v. U S West Inc.

and Continental Cablevision, Inc.,

United States District Court for the

District of Columbia

On behalf of Teleport Communications

Group Inc. (TCG), and in accordance with the

provisions of 15 U.S.C. Sec. 16(d), we hereby

submit the following comments in

connection with the matter of United States

of America v. U S West Inc. and Continental

Cablevision Inc. TCG seeks an amendment to

the Final Judgment providing that the

Affidavits submitted pursuant to Section VII

will be submitted confidentially and not be

filed in the public docket of the Court. The

undersigned has been in communication

with Robert J. Sachs, counsel for Continental,

and has been advised that they do not oppose

this request.

The proposed Final Judgment provides,

inter alia, that U S West use its best efforts

to divest the approximately 11% interest of

TCG held by Continental as expeditiously as

possible. The proposed Final Judgment

further provides that U S West divest a

portion of its interest in TCG sufficient to

cause it to own less than 10% by June 30,

1997, and divest any remaining portion of the

TCG interest by December 31, 1998. The

divestiture must be made to a purchaser or

purchasers in a manner that ‘‘shall not injure

TCG.’’

The proposed Final Judgment orders U S

West to deliver periodic Affidavits to the

plaintiff setting forth its efforts in connection

with the ordered divestiture. Said Affidavits

are to include such information as the names

of potential purchasers contacted or

expressing interest, and describe ‘‘in detail

each contact.’’ These Affidavits could be

subject to public disclosure unless they are

submitted confidentially pursuant to an

Order of this Court.

TCG is a publicly traded company with

approximately 30 million shares traded on

the NASDAQ National Market. TCG is

concerned that information concerning

efforts to sell a major block of the company’s

stock could have a significant adverse impact

on the market for TCG stock. Traders may

engage in speculative activity based on

information contained in these Affidavits

causing significant volatility in TCG’s stock

price. As a result, premature disclosure of U

S West’s activities could significantly disrupt

the market for TCG’s securities. Further, the

information contained in these Affidavits is

subject to being available selectively to

certain investors and not others, thereby

possibly requiring TCG to fully disseminate

such information so as to be in full

compliance with securities laws.

Additionally, there may be a chilling effect

on some of the prospective purchasers of U

S West’s interest in TCG if the possibility

exists that an inquiry or expression of

interest is subject to being publicly disclosed.

Such prospective purchasers may not even

want their interests made public, much less

risk a ‘‘public negotiation’’ for TCG. This may

have the effect of reducing the universe of

prospective purchasers, some of whom may

be best suited to insure the continued

viability of TCG. Furthermore, public

disclosure of the negotiations may jeopardize

or render unavailable any exemption under

federal and state securities law upon which

the parties intend to rely. This would cause

additional expense and may complicate or

even terminate negotiations.

TCG proposes that the required Affidavits

be submitted confidentially to the plaintiff

and not filed in the public docket of the

Court. In the event the divestiture is not

accomplished in the time frame set out in the

Final Judgment, a Trustee is appointed to

effect the divestiture. Although the Trustee is

similarly required to submit monthly status

reports, such reports are specifically to be

submitted confidentially. It appears the

failure of the proposed Final Judgment to

contain similar confidentiality protection

was an oversight by the parties, and a similar

restriction should be imposed upon the preTrustee status reports as well.

TCG believes the overriding principle in

the Final Judgment is to force a divestiture

of U S West’s interest in TCG in a fashion

that is not injurious to TCG and that could

not lessen competition. However,

information contained in the status Affidavits

could impact TCG’s financial well-being

pending the disposition. If there is any

possibility that such an outcome may occur,

it is in the best interest of the public to

support TCG’s request and maintain the

confidentiality of such information.

TCG further submits that existing federal

securities laws provide an appropriate

framework for the public disclosure of the

disposition of U S West’s holdings in TCG.

Because U S West will be subject to the

public reporting obligations under both

Section 13 and 16 of the Securities Exchange

Act of 1934 with respect to its TCG stock, U

S West is already required to make public

filings as to changes in its TCG stock

holdings when it enters into binding

agreements to dispose of such stock. TCG

believes that the public disclosure mandated

by these securities laws provides the best and

most orderly mechanism for the public

disclosure of changes in U S West’s holdings.

In conclusion, TCG asserts that its request

is consistent with the underlying premise of

the proposed Order—to cause a divestiture of

U S West’s holdings in TCG in a manner that

is not injurious to TCG. In light of the fact

that the request is not contested by

Continental, we request the United States

concur and submit such request to the Court.

Sincerely,

W. Terrell Wingfield, Jr.,

Vice President and General Counsel.

Service List

C. Loring Jetton, Jr., Wilmer, Cutler &

Pickering, 2445 M Street, NW.,

Washington, DC 20037.

John McGrew, Wilkie Farr & Gallagher, Three

Lafayette Center, 1155 21st Street, NW.,

Washington, DC 20036–3384.

W. Terrell Wingfield, Jr., Vice President and

General Counsel, Teleport

Communications Group, 429 Ridge Road,

Dayton, NJ 08810.

Sean C. Lindsay, U.S. West, Inc., 7800 East

Orchard Road, Suite 490, P.O. Box 6508,

Englewood, CO 80155–6508.

Robert J. Sachs, Senior Vice President,

Corporate and Legal Affairs, Continental

Cablevision, Inc., The Pilot House, Lewis

Wharf, Boston, MA 02110.

Certificate of Service

I, Tracy Varghese, hereby certify under

penalty of perjury that I am not a party to this

action, that I am not less than 18 years of age,

and that I have on this day caused the

Comments Relating to Proposed Final

Judgment and Response of the United States

to Comments to be served on defendants,

intervenors, and other interested persons by

mailing a copy, postage prepaid, to each of

the individuals and organizations on the

attached service list.

February 7, 1997.

Tracy Varghese.

[FR Doc. 97–4377 Filed 2–21–97; 8:45 am]

BILLING CODE 4410–11–M

Notice Pursuant to the National

Cooperative Research and Production

Act of 1993—Commercial Turf

Products, Ltd. Joint Research,

Development and Production Joint

Venture

Notice is hereby given that, on

January 9, 1997, pursuant to Section 6(a)

of the National Cooperative Research

and Production Act of 1993, 15 U.S.C.

§ 4301 et seq. (‘‘the Act’’), Commercial

Turf Products, Ltd. filed written