59428 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

proposed order does not suggest that

other physician networks whose

membership exceeds the percentage

limitations are likely to have

anticompetitive effects. The provision is

limited to five years in order to give

AHN the greatest possible freedom to

respond to changing market conditions

thereafter, once the effects of the

challenged conduct have dissipated.

The remaining provisions of the

proposed order impose obligations on

AHN with respect to distributing the

order and complaint to its members and

other specified persons and reporting

information to the Commission. The

order terminates twenty years after the

date it issues.

By direction of the Commission.

Donald S. Clark,

Secretary.

Separate Statement of Commissioners

Orson Swindle and Thomas B. Leary in

Alaska Healthcare Network, Inc., File No.

991 0103

Although we have voted to accept the

consent agreement in this matter

because we believe the conduct remedy

is justified, we also believe that one

component of the relief prescribed by

the proposed order—namely, the

inclusion of a form of ‘‘structural’’

remedy to help cure the effects of

respondent AHN’s allegedly unlawful

conduct—is inappropriate in this

particular case.

If AHN elects to function as a

negotiator or merely as a ‘‘messenger,’’

then Paragraph III of the proposed order

will for five years impose, respectively,

either a 30 percent or a 50 percent ‘‘cap’’

on the number of Fairbanks physicians

in each of five ‘‘relevant physician

markets’’ who may participate in AHN.

Although we believe that limits on a

physician group’s ‘‘market shares’’ in

particular specialties can be appropriate

fencing-in relief for the type of conduct

involved in this case, we are not

persuaded that this provision will

operate in a rational and predictable

way in a market as small as Fairbanks.

This concern is exacerbated by the first

proviso to Paragraph III, which allows

respondent to ‘‘grandfather’’ in ‘‘any one

pre-existing practice group’’—no matter

how large—and thus to perpetuate a

structure inconsistent with the goals of

that paragraph.

The imposition of such structural

relief in a setting like Fairbanks results

in anomalies that would not arise in a

larger urban area. For example, one of

the five ‘‘relevant physician markets’’

affected by the order (pediatrics) has

only seven practitioners, and five are in

a grandfathered group; another

‘‘market’’ (ob/gyn) has only ten

practitioners, six of whom are in a

grandfathered group. We can certainly

understand the desire to refrain from

forcing the breakup of a presumably

efficient practice group, but this proviso

makes the percentage caps ineffective

for those specialties. On the other hand,

the order itself potentially inhibits the

formation of similarly efficient practice

groups in the specialties where the caps

are effective.

Some form of structural relief might

well be warranted in future cases in

which the efficacy of a purely

‘‘conduct’’ (i.e., ‘‘cease-and-desist’’)

order is in doubt. A formerly collusive

group’s compliance with the dictates of

a conduct order (through the cessation

of overtly conspiratorial behavior) does

not necessarily spell the end of tacit

coordination in the future. In a market

with different characteristics from those

involved in this case, some type of

percentage cap on network membership

could go a long way to bolster

competition through the creation of one

or more competing networks. In this

market, however, we question whether

the remedy makes sense.

We hope that the public comment

period on this consent agreement will

yield some illuminating advice from the

bar, the medical community, and the

public at large, both with respect to the

general appropriations of structural

measures in ‘‘conduct’’ cases and with

regard to whether such measures make

sense in a thinly populated market such

as Fairbanks.

[FR Doc. 00–25572 Filed 10–4–00; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 001–0092]

The Boeing Company; Analysis to Aid

Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement and the terms of the

consent order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before October 27, 2000.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 600 Pennsylvania Avenue,

NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Norman A. Armstrong, Jr., FTC/S–2311,

600 Pennsylvania Avenue, NW.,

Washington, DC 20580, (202) 326–2072.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and Section 2.34 of the

Commission’s Rules of Practice (16 CFR

2.34), notice is hereby given that the

above-captioned consent agreement

containing a consent order to cease and

desist, having been filed with and

accepted, subject to final approval, by

the Commission, has been placed on the

public record for a period of thirty (30)

days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreement, and the

allegations in the complaint. An

electronic copy of the full text of the

consent agreement package can be

obtained from the FTC Home Page (for

September 27, 2000), on the World

Wide Web, at ‘‘http://www.ftc.gov/os/

2000/09/index.htm.’’ A paper copy can

be obtained from the FTC Public

Reference Room, Room H–130, 600

Pennsylvania Avenue, NW.,

Washington, DC 20580, either in person

or by calling (202) 326–3627.

Public comment is invited. Comments

should be directed to: FTC/Office of the

Secretary, Room 159, 600 Pennsylvania

Avenue, NW., Washington, DC 20580.

Two paper copies of each comment

should be filed, and should be

accompanied, if possible, by a 31⁄2 inch

diskette containing an electronic copy of

the comment. Such comments or views

will be considered by the Commission

and will be available for inspection and

copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of

the Commission’s Rules of Practice (16

CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to

Aid Public Comment

The Federal Trade Commission

(‘‘Commission’’) has accepted, subject to

final approval, an Agreement

Containing Consent Order (‘‘Consent

Agreement’’) from The Boeing Company

(‘‘Boeing’’) designed to remedy the

anticompetitive effects resulting from

Boeing’s acquisition of certain assets of

General Motors Corporation. The

proposed Consent Agreement prohibits

Boeing from providing systems

engineering and technical assistance

(‘‘SETA’’) services to the United States

Department of Defense (‘‘DoD’’) for a

certain classified program. The

Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices 59429

1The complaint includes an additional line of

commerce, the provision of SETA Services, in

which to analyze the effects of the transaction. This

line of commerce is included in the complaint

because the proposed merger results in the

integration of Boeing into two non-horizontal

markets: (1) the provision of SETA Services; and (2)

a competitor for a certain classified program for

which Boeing is providing SETA services. It is

necessary to analyze the competitive conditions in

the market for provision of SETA Services in order

to determine whether there would be

anticompetitive effects in the related market for a

certain classified program for which Boeing is

providing SETA services.

proposed Consent Agreement also

prohibits Boeing’s launch vehicle

division from gaining access to any nonpublic information that Boeing’s

satellite division receives from

competing launch vehicle suppliers

when those competing suppliers launch

Boeing’s satellites. Similarly, the

proposed Consent Agreement prohibits

Boeing’s satellite division from gaining

access to any non-public information

that Boeing’s launch vehicle business

receives from competing satellite

suppliers. In addition, the proposed

Consent Agreement requires Boeing to

make available all necessary satellite

interface information, which is used to

make a satellite compatible with a

launch vehicle, to all launch vehicle

suppliers.

The proposed Consent Agreement has

been placed on the public record for

thirty (30) days for reception of

comments by interested persons.

Comments received during this period

will become part of the public record.

After thirty (30) days, the Commission

will again review the proposed Consent

Agreement and any comments received,

and will decide whether it should

withdraw from the proposed Consent

Agreement or make final the proposed

Decision & Order.

Pursuant to a Stock Purchase

Agreement entered into on January 13,

2000, Boeing agreed to acquire certain

assets of General Motors Corporation,

including Hughes Space and

Communications Company, Hughes

Space and Communications

International, Hughes Space and

Communications International Service

Company, Spectrolab, Inc., Hughes

Electron Dynamics, Hughes

Telecommunications and Space

Company’s 2.69% interest in ICO Global

Communications Ltd., and Hughes

Telecommunications and Space

Company’s 2% interest in Thuraya

Satellite Telecommunications Private

Joint Stock Company, for approximately

$3.75 billion. The Commission’s

Complaint alleges that the transaction, if

consummated, would violate Section 7

of the Clayton Act, as amended, 15

U.S.C. 45, and Section 5 of the FTC Act,

as amended, 15 U.S.C. 18, in the

following markets:

(1) A certain classified program for

which Boeing is providing SETA

services; 1

(2) The research, development,

manufacture, and sale of commercial

geosynchronous earth orbit satellites;

(3) The research, development,

manufacture, and sale of commercial

medium earth orbit satellites;

(4) The research, development,

manufacture, and sale of commercial

low earth orbit satellites;

(5) The research, development,

manufacture, and sale of government

satellites; and

(6) The research, development,

manufacture, and sale of launch

vehicles.

The proposed Consent Agreement

remedies the alleged violations in each

market. First, Boeing is the sole supplier

of SETA services to DoD for a certain

classified program. Boeing provides

these services to DoD under a classified

contract identified for purposes of the

Complaint as Contract 4208. Hughes is

one of two competing contractors for the

classified program for which Boeing is

providing SETA services. Thus, as result

of the proposed acquisition, Boeing

would be both the provider of SETA

services and a competing contractor for

this classified program.

As a SETA contractor, Boeing must

receive a great deal of competitively

sensitive information, including

detailed cost and bidding data, from

contractors competing for the classified

program. With access to such

information, Boeing may be able to raise

prices for the classified program by

bidding less aggressively than it

otherwise would. In addition, Boeing’s

position as SETA contractor could

enable it anticompetitively to favor itself

and/or disfavor its competitors in a

number of ways, such as submitting

unfair evaluations of its competitors’

proposals.

The proposed Consent Agreement

remedies the proposed acquisition’s

potential anticompetitive effects in this

classified program by prohibiting

Boeing from performing certain SETA

services for this classified program in

the future. To prevent the

anticompetitive exchange of

information, the Consent Agreement

requires Boeing to: (1) Use non-public

SETA services information only its

capacity as provider of technical

assistance to DoD, or for the provision

of SETA services not prohibited by the

Order; and (2) erect a ‘‘firewall’’

between its SETA services division and

Boeing’s satellite division. In addition,

to assist DoD in the transition of these

SETA services responsibilities to one of

its own research and development

centers, the Consent Agreement further

requires Boeing to: (1) Provide technical

assistance, at the request of DoD, for a

period not to exceed one year; and (2)

provide to DoD all documents relating

to certain SETA services that Boeing has

received in its role as SETA contractor.

Second, Hughes is a significant

supplier of satellites and Boeing is a

significant supplier of launch vehicles,

which are used to launch satellites from

the Earth’s surface into space. In order

for a launch vehicle to launch a satellite,

launch vehicle suppliers and satellite

suppliers must work closely together

and share a substantial amount of

proprietary and competitively sensitive

information to integrate the two

products. Thus, as a significant supplier

of launch vehicles, Boeing/Hughes

would have access to competitively

sensitive information of competing

satellite manufacturers which it could

share with its satellite divisions. If

Boeing’s satellite divisions gained

access to this information, Boeing

would be able to determine the cost and

technology involved in its competitors’

satellite proposals. This could have

immediate anticompetitive

consequences on upcoming satellite

procurements by allowing Boeing to bid

less aggressively than it otherwise

would. In addition, the incentives of

other satellite suppliers to invest in

future technological advancements

could be reduced due to concerns that

Boeing would be able to ‘‘free-ride’’ off

its competitors’ technological

innovations. As a significant supplier of

satellites, Boeing/Hughes likewise

would have access to sensitive

information of competing launch

vehicle providers. If Boeing’s launch

vehicle division were to gain access to

this information, it could allow Boeing

to bid less aggressively in upcoming

launch vehicle procurements and

reduce incentives of competitors to

invest in technological innovation.

The proposed Consent Agreement is

designed to protect the proprietary and

competitively sensitive information of

launch vehicle and satellite suppliers.

Specifically, the Consent Agreement

prohibits Boeing’s satellite business

from making any non-public launch

vehicle information obtained from any

launch vehicle provider available to

Boeing’s launch vehicle business. Under

the proposed Consent Agreement,

Boeing may only use such information

as a provider of satellites. Similarly, the

proposed Consent Agreement prohibits

Boeing’s launch vehicle business from

59430 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

making any non-public satellite

information obtained from any satellite

supplier available to Boeing’s satellite

business. Under the terms of the

Consent Agreement, Boeing may only

use such information in its capacity as

a launch vehicle provider. The

Commission has issued similar orders

limiting potentially anticompetitive

information transfers following mergers

or acquisitions, including: Lockheed

Martin, (C–3685) (September 20, 1996);

Raytheon Company, (C–3681)

(September 10, 1996); Lockheed

Corporation/Martin Marietta

Corporation, (C–3576) (May 9, 1995);

Alliant Techsystems Inc., (C–3567)

(April 7, 1995); Martin Marietta, (C–

3500) (June 28, 1994).

Third, the proposed acquisition raises

concern that Boeing could withhold

satellite interface information, which is

necessary to integrate a satellite with a

launch vehicle, from its launch vehicle

competitors. If Boeing were to withhold

such satellite interface information, it

could potentially disadvantage or raise

the costs of other launch vehicle

suppliers that are competing to launch

Boeing’s satellites, and ultimately to

customers. The proposed Consent

Agreement remedies this concern by

requiring that for any satellite

manufactured by Boeing/Hughes prior

to the date the Consent Agreement

becomes final, Boeing must provide

satellite interface information, as that

term is defined in the Consent

Agreement, to any launch vehicle

supplier within thirty (30) days from the

date Boeing receives a request for such

information. The Order also requires

Boeing to notify all launch vehicle

suppliers, in writing, that satellite

interface information relating to any

Boeing/Hughes satellite bus, model, or

product line is available upon request.

Boeing/Hughes is also required to

provide each launch vehicle supplier

with instructions on how to request

such information. The Consent

Agreement further requires Boeing to

provide satellite interface information

relating to any of its satellite buses,

models, or product lines manufactured

after the date this Consent Agreement

becomes final, to any launch vehicle

supplier that requests such information

or to whom Boeing previously supplied

satellite interface information. However,

for each satellite manufactured for the

United States Government, Boeing shall

only be required to provide satellite

interface information to any launch

vehicle supplier specified by the United

States Government. In addition, the

Consent Agreement requires Boeing/

Hughes to provide satellite interface

information to any launch vehicle

supplier specified by any satellite

customer no later than Boeing provides

such information to its own launch

vehicle businesses.

Fourth, the Commission has

appointed Sheila Widnall as a monitor

trustee pursuant to the proposed

Consent Agreement to ensure that

Boeing complies with the provisions of

the Order. The monitor trustee will,

among other things, assist the

Commission in monitoring Boeing’s

compliance with the firewall

requirements of the Order and Boeing’s

efforts to provide satellite interface

information to other launch vehicle

competitors. Because satellite interface

information often involves technical

information, the monitor trustee will aid

in evaluating the contents of the satellite

interface information that is to be

distributed. Under the provisions of the

Consent Agreement, the monitor trustee

will serve for a period of ten (10) years

and provide, among other things,

written reports sixty (60) days after she

is appointed detailing Boeing’s

compliance with the proposed Consent

Agreement and annually thereafter for

the next ten (10) on the anniversary of

the date the Decision and Order

becomes final.

The purpose of this analysis is to

facilitate public comment on the

Consent Agreement and Decision &

Order, and it is not intended to

constitute an official interpretation of

the Consent Agreement and Decision &

Order or to modify their terms in any

way.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 00–25571 Filed 10–4–00; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of the Secretary

Notice of Meeting: Secretary’s

Advisory Committee on Genetic

Testing

Pursuant to Public Law 92–463,

notice is hereby given of the seventh

meeting of the Secretary’s Advisory

Committee on Genetic Testing (SACGT),

U.S. Public Health Service. The meeting

will be held from 9 a.m. to 5:30 p.m. on

November 2, 2000 and 8 a.m. to 5 p.m.

on November 3, 2000 at the National

Institutes of Health, Building 31, C

Wing, Conference Room 10, 9000

Rockville Pike, Bethesda, MD 20892.

The meeting will be open to the public

with attendance limited to space

available.

The Committee will hear progress

reports from the working groups

established at its August 4 meeting and

discuss plans for future projects. The

Committee will also hear presentations

on current regulations governing the

labeling and advertising of genetic tests

and public and private sector policies

regarding reimbursement for genetic

testing services. There will be a limited

period of time provided for public

comment and interested individuals

should notify the contact person listed

below.

Under authority of 42 U.S.C. 217a,

Section 222 of the Public Health Service

Act, as amended, the Department of

Health and Human Services established

SACGT to advise and make

recommendations to the Secretary

through the Assistant Secretary for

Health on all aspects of the

development and use of genetic tests.

The SACGT is directed to (1)

recommend policies and procedures for

the safe and effective incorporation of

genetic technologies into health care; (2)

assess the effectiveness of existing and

future measures for oversight of genetic

tests; and (3) identify research needs

related to the Committee’s purview.

The draft meeting agenda and other

information about SACGT will be

available at the following web site:

http://www4.od.nih.gov/oba/sacgt.htm

Individuals who wish to provide public

comments or who plan to attend the

meeting and need special assistance,

such as sign language interpretation or

other reasonable accommodations,

should notify the SACGT Executive

Secretary, Ms. Sarah Carr, by telephone

at 301–496–9838 or E-mail at

sc112c@nih.gov. The SACGT office is

located at 6000 Executive Boulevard,

Suite 302, Bethesda, Maryland 20892.

Dated: September 29, 2000.

Sarah Carr,

Executive Secretary, SACGT.

[FR Doc. 00–25537 Filed 10–04–00; 8:45 am]

BILLING CODE 4140–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Centers for Disease Control and

Prevention

Advisory Committee on Immunization

Practices: Meeting

In accordance with section 10(a)(2) of

the Federal Advisory Committee Act

(Pub. L. 92–463), the Centers for Disease

Control and Prevention (CDC)