Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 9267 

1The 2004 amendments substituted ‘‘shall’’ for 

‘‘may’’ in directing relevant factors for the court to 

consider and amended the list of factors to focus on 

competitive considerations and to address 

potentially ambiguous judgment terms. Compare 15 

U.S.C. § 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); 

see also United States v. SBC Commc’ns, Inc., 489 

F. Supp. 2d 1, 11 (D.D.C. 2007) (concluding that the 

2004 amendments ‘‘effected minimal changes’’ to 

Tunney Act review). 

Building, Suite 1600, 601 D Street, NW., 

Washington, DC 20530. 

Dated: February 25, 2009. 

Lynn Bryant, 

Department Clearance Officer, PRA, United 

States Department of Justice. 

[FR Doc. E9–4413 Filed 3–2–09; 8:45 am] 

BILLING CODE 4410–FY–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Public Comment and Response on 

Proposed Final Judgment 

Pursuant to the Antitrust Procedures 

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

the United States hereby publishes 

below the comment received on the 

proposed Final Judgment in United 

States et al. v. Verizon Communications 

Inc. and Alltel Corporation, No. 1:08– 

CV–01878–EGS, which were filed in the 

United States District Court for the 

District of Columbia, on February 17, 

2009, together with the response of the 

United States to the comment. 

Copies of the comment and the 

response are available for inspection at 

the Department of Justice Antitrust 

Division, 325 Seventh Street, NW., 

Room 200, Washington, DC 20530, 

(telephone (202) 514–2481), and at the 

Office of the Clerk of the United States 

District Court for the District of 

Columbia, 333 Constitution Avenue, 

NW., Washington, DC 20001. Copies of 

any of these materials may be obtained 

upon request and payment of a copying 

fee. 

Patricia Brink, 

Deputy Director of Operations, Antitrust 

Division. 

IN THE UNITED STATES DISTRICT 

COURT FOR THE DISTRICT OF 

COLUMBIA 

United States of America, State of 

Alabama, State of California, State of 

Iowa, State of Kansas, State of 

Minnesota, State of North Dakota, and 

State of South Dakota, Case No. 1:08– 

Cv–01878 (Egs), Plaintiffs, v. Verizon 

Communications Inc. and Alltel 

Corporation, Defendants 

Plaintiff United States’s Response to 

Public Comments 

Pursuant to the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h) (‘‘APPA’’ or 

‘‘Tunney Act’’), plaintiff United States 

hereby responds to the public comment 

received regarding the proposed Final 

Judgment in this case. After careful 

consideration of the comment, plaintiff 

United States continues to believe that 

the proposed Final Judgment will 

provide an effective and appropriate 

remedy for the antitrust violation 

alleged in the Complaint. Plaintiff 

United States will move the Court for 

entry of the proposed Final Judgment 

after the public comment and this 

Response have been published in the 

Federal Register, pursuant to 15 U.S.C. 

§ 16(b), (d). 

On October 30, 2008, plaintiff United 

States and the States of Alabama, 

California, Iowa, Kansas, Minnesota, 

North Dakota, and South Dakota filed 

the Complaint in this matter alleging 

that the proposed merger of two mobile 

wireless telecommunications service 

providers, Verizon Communications Inc. 

(‘‘Verizon’’) and Alltel Corporation 

(‘‘Alltel’’), would violate Section 7 of 

the Clayton Act, 15 U.S.C. 18 in certain 

geographic areas of the United States. 

Simultaneously with the filing of the 

Complaint, plaintiff United States filed 

a proposed Final Judgment and a 

Preservation of Assets Stipulation and 

Order signed by plaintiff United States, 

the plaintiff States and the defendants 

consenting to the entry of the proposed 

Final Judgment after compliance with 

the requirements of the Tunney Act. 

Pursuant to those requirements, plaintiff 

United States filed a Competitive Impact 

Statement (‘‘CIS’’) in this Court on 

October 30, 2008; published the 

proposed Final Judgment and CIS in the 

Federal Register on November 12, 2008, 

see 73 FR 66,922 (2008); and published 

a summary of the terms of the proposed 

Final Judgment and CIS, together with 

directions for the submission of written 

comments relating to the proposed Final 

Judgment, in the Washington Post for 

seven days beginning on November 19, 

2008 and ending on November 25, 2008. 

The defendants filed the statements 

required by 15 U.S.C. § 16(g) on 

November 7, 2008. The 60-day period 

for public comments ended on January 

24, 2009, and one comment was 

received as described below and 

attached hereto. 

I. Background 

As explained more fully in the 

Complaint and the CIS, the likely effect 

of this transaction would be to lessen 

competition substantially for mobile 

wireless telecommunications services in 

94 geographic areas in the states of 

Alabama, Arizona, California, Colorado, 

Georgia, Idaho, Illinois, Iowa, Kansas, 

Minnesota, Montana, Nebraska, Nevada, 

New Mexico, North Carolina, North 

Dakota, Ohio, South Carolina, South 

Dakota, Utah, Virginia, and Wyoming. 

To restore competition in these markets, 

the proposed Final Judgment, if entered, 

would require defendants to divest (a) 

Alltel’s mobile wireless 

telecommunications businesses and 

related assets in 85 Cellular Market 

Areas (‘‘CMAs’’); (b) Verizon’s mobile 

wireless telecommunications businesses 

and related assets acquired from Rural 

Cellular Corporation in August 2008 in 

seven CMAs; and (c) Verizon’s mobile 

wireless telecommunications businesses 

and related assets (excluding those 

acquired from Rural Cellular 

Corporation in August 2008) in two 

CMAs. Entry of the proposed Final 

Judgment would terminate this action, 

except that the Court would retain 

jurisdiction to construe, modify, or 

enforce the provisions of the proposed 

Final Judgment and punish violations 

thereof. 

II. Legal Standard Governing the 

Court’s Public Interest Determination 

Upon publication of the public 

comments and this Response, plaintiff 

United States will have fully complied 

with the Tunney Act. It will then ask 

the court to determine that entry of the 

proposed Final Judgment would be ‘‘in 

the public interest,’’ and to enter it. 15 

U.S.C. 16(e)(1). In making that 

determination, the court, in accordance 

with the statute as amended in 2004,1 is 

required to consider: 

(A) The competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) The impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. 16(e)(1)(A)–(B). In considering 

these statutory factors, the court’s 

inquiry is necessarily a limited one as 

the government is entitled to ‘‘broad 

discretion to settle with the defendant 

within the reaches of the public 

interest.’’ United States v. Microsoft 

Corp., 56 F.3d 1448, 1461 (DC Cir. 

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9268 Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 

2Cf. BNS, 858 F.2d at 464 (holding that the 

court’s ‘‘ultimate authority under the [APPA] is 

limited to approving or disapproving the consent 

decree’’); United States v. Gillette Co., 406 F. Supp. 

713, 716 (D. Mass. 1975) (noting that, in this way, 

the court is constrained to ‘‘look at the overall 

picture not hypercritically, nor with a microscope, 

but with an artist’s reducing glass’’). See generally 

Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the 

remedies [obtained in the decree are] so 

inconsonant with the allegations charged as to fall 

outside of the ‘‘reaches of the public interest’’). 

3See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); S. Rep. No. 93–298, 93d Cong., 

1st Sess., at 6 (1973) (‘‘Where the public interest can 

be meaningfully evaluated simply on the basis of 

briefs and oral arguments, that is the approach that 

should be utilized.’’); United States v. Mid-Am. 

Dairymen, Inc., 1977–1 Trade Cas. (CCH) ¶ 61,508, 

at 71,980 (W.D. Mo. 1977) (‘‘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.’’). 4The wireless assets to be be divested in Georgia 

(collectively, the ‘‘Georgia divestiture assets’’) are 

located in the Albany, GA Metropolitan Statistical 

Area (‘‘MSA’’) and Georgia Rural Service Areas 

(‘‘RSAs’’) 6, 7, 8, 9, 10, 12, and 13. 

1995); see generally United States v. 

SBC Commc’ns, Inc., 489 F. Supp. 2d 1 

(D.D.C. 2007) (assessing public interest 

standard under the Tunney Act). 

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

specific allegations set forth in the 

government’s complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See Microsoft, 56 

F.3d at 1458–62. With respect to the 

adequacy of the relief secured by the 

decree, a court may not ‘‘engage in an 

unrestricted evaluation of what relief 

would best serve the public.’’ United 

States v. BNS, Inc., 858 F.2d 456, 462 

(9th Cir. 1988) (citing United States v. 

Bechtel Corp., 648 F.2d 660, 666 (9th 

Cir. 1981)); see also Microsoft, 56 F.3d 

at 1460–62; United States v. Alcoa, Inc., 

152 F. Supp. 2d 37, 40 (D.D.C. 2001). 

Courts have held that: 

[t]he balancing of competing social and 

political interests affected by a proposed 

antitrust consent decree must be left, in the 

first instance, to the discretion of the 

Attorney General. The court’s role in 

protecting the public interest is one of 

insuring that the government has not 

breached its duty to the public in consenting 

to the decree. The court is required to 

determine not whether a particular decree is 

the one that will best serve society, but 

whether the settlement is ‘‘within the reaches 

of the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel, 648 F.2d at 666 (citations 

omitted).2 In determining whether a 

proposed settlement is in the public 

interest, a district court ‘‘must accord 

deference to the government’s 

predictions about the efficacy of its 

remedies, and may not require that the 

remedies perfectly match the alleged 

violations.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 17; see also Microsoft, 56 

F.3d at 1461 (noting the need for courts 

to be ‘‘deferential to the government’s 

predictions as to the effect of the 

proposed remedies’’); United States v. 

Archer-Daniels-Midland Co., 272 F. 

Supp. 2d 1, 6 (D.D.C. 2003) (noting that 

the court should grant due respect to the 

United States’s prediction as to the 

effect of proposed remedies, its 

perception of the market structure, and 

its views of the nature of the case). 

Courts have greater flexibility in 

approving proposed consent decrees 

than in crafting their own decrees 

following a finding of liability in a 

litigated matter. ‘‘[A] proposed decree 

must be approved even if it falls short 

of the remedy the court would impose 

on its own, as long as it falls within the 

range of acceptability or is ‘within the 

reaches of public interest.’ ’’ United 

States v. Am. Tel. & Tel. Co., 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citations 

omitted) (quoting United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975)), aff’d sub nom. Maryland 

v. United States, 460 U.S. 1001 (1983); 

see also United States v. Alcan 

Aluminum Ltd., 605 F. Supp. 619, 622 

(W.D. Ky. 1985) (approving the consent 

decree even though the court would 

have imposed a greater remedy). To 

meet this standard, the United States 

‘‘need only provide a factual basis for 

concluding that the settlements are 

reasonably adequate remedies for the 

alleged harms.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 17. 

Moreover, the court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that plaintiff United States has alleged 

in its Complaint, and does not authorize 

the court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459. Because the ‘‘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,’’it follows that 

‘‘the court is only authorized to review 

the decree itself,’’ and not to ‘‘effectively 

redraft the complaint’’ to inquire into 

other matters that plaintiff United States 

did not pursue. Id. at 1459–60. As this 

Court recently confirmed in SBC 

Commc’ns, courts ‘‘cannot look beyond 

the complaint in making the public 

interest determination unless the 

complaint is drafted so narrowly as to 

make a mockery of judicial power.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 15. 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of using consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. 16(e)(2). The 

language codified what the Congress 

that enacted the Tunney Act in 1974 

intended, as Senator Tunney explained: 

‘‘[t]he court is nowhere compelled to go 

to trial or to engage in extended 

proceedings which might have the effect 

of vitiating the benefits of prompt and 

less costly settlement through the 

consent decree process.’’ 119 Cong. Rec. 

24,598 (1973) (statement of Senator 

Tunney). Rather, the procedure for the 

public interest determination is left to 

the discretion of the court, with the 

recognition that the court’s ‘‘scope of 

review remains sharply proscribed by 

precedent and the nature of Tunney Act 

proceedings.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 11.3

III. Summary of Public Comment and 

Plaintiff United States’s Response 

During the 60-day public comment 

period, plaintiff United States received 

one comment, from Public Service 

Communications, Inc., Public Service 

Telephone Company, and their related 

affiliates (collectively ‘‘PST’’), which is 

attached hereto and summarized below. 

This comment relates primarily to 

mobile wireless services in the State of 

Georgia. Upon review, plaintiff United 

States believes that nothing in the 

comment warrants a change in the 

proposed Final Judgment or is sufficient 

to suggest that the proposed Final 

Judgment is not in the public interest. 

Copies of this Response and its 

attachments have been mailed to PST. 

A. Factual Background 

The plaintiffs’ Complaint alleges that 

the merger of Verizon and Alltel would 

tend to lessen competition substantially, 

in violation of Section 7 of the Clayton 

Act, in the provision of mobile wireless 

telecommunications services in 

geographic areas effectively represented 

by 94 FCC spectrum licensing areas, 

including eight CMAs in the state of 

Georgia.4 In recognition of the fact that 

wireless carriers frequently are more 

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Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 9269 

5Section IV.I of the proposed Final Judgment 

allows plaintiff United States, in its sole discretion, 

upon consultation with the relevant plaintiff State, 

to allow the sale of less than all the wireless assets 

in Georgia to facilitate a prompt divestiture to an 

acceptable buyer. In addition, if an acceptable buyer 

is not found for the mobile wireless businesses, 

plaintiff United States, in its sole discretion, upon 

consultation with the relevant plaintiff State, can 

require defendants to include additional assets, for 

example, in order to attract an acceptable buyer. 

Proposed Final Judgment, Section V.E. 

6These CMAs are adjacent to three of the eight 

CMAs in Georgia and the two CMAs in Alabama 

where wireless assets are to be divested pursuant 

to the proposed Final Judgment. See Attachment 1, 

Map, Alabama and Georgia: Divested CMAs and 

PST Proposed Divestitures. 

7Plaintiff United States investigated all areas of 

the United States in which Verizon and Alltel 

compete, including whether the proposed merger 

would impact mobile wireless telecommunications 

services nationwide. The 100 CMAs listed in the 

Complaint and related decree modifications are the 

only areas where plaintiff United States concluded 

the merger was likely to substantially lessen 

competition. 

8As this Court has held, courts ‘‘cannot look 

beyond the complaint in making the public interest 

determination unless the complaint is drafted so 

narrowly as to make a mockery of judicial power.’’ 

SBC Commc’ns, 489 F. Supp. 2d at 15. Plainly, with 

allegations of competitive harm in 94 geographic 

license areas covering millions of potential 

subscribers, the Complaint in this matter is not so 

narrowly drafted. 

9Plaintiff United States’s determination of which 

areas to allege in the Complaint was based on a 

thorough investigation of each area that included 

consideration of: the number of mobile wireless 

providers and their competitive strengths and 

weaknesses; market shares and concentration; the 

availability of new spectrum; whether any 

providers are spectrum constrained or otherwise 

limited in their ability to add customers; the 

breadth and depth of coverage by different 

providers (including coverage in relation to 

population density); the retail presence of each 

provider; local wireless number portability data; 

and the likelihood of new entry or expansion. CIS 

at 10. PST’s allegations of harm are based simply 

on unreliable guesses about market shares and 

information about total spectrum holdings. Shares 

and spectrum holdings are just two of many factors 

that need to be considered, not a complete 

competitive analysis. United States v. Baker 

Hughes, Inc., 908 F.2d 981, 984 (D.C. Cir. 1990) 

(stating that evidence of market concentration 

‘‘simply provides a convenient starting point for a 

broader inquiry into future competitiveness’’); FTC 

v. Arch Coal, Inc., 329 F. Supp. 2d 109, 130 (D.D.C. 

2004) (recognizing that ‘‘this circuit has cautioned 

against relying too heavily on a statistical case of 

market concentration alone’’). 

competitive where they serve 

contiguous areas, see CIS at 16, the 

proposed Final Judgment requires that 

all the assets to be divested in the State 

of Georgia be sold together to a single 

buyer.5 Proposed Final Judgment, 

Section IV.I. 

B. Summary of Comment 

PST provides wireline 

telecommunications services (though 

not, currently, wireless) in the mostly 

rural area in Georgia between Columbus 

and Macon. Its service area covers 

portions of two of the CMAs to be 

divested in Georgia, including roughly 

half of Georgia RSA 6 and a small 

portion of Georgia RSA 9. PST believes 

that the divestitures contained in the 

proposed Final Judgment are 

inadequate. 

PST first contends that plaintiffs 

should have challenged the merger 

everywhere Verizon and Alltel 

competed and obtained ‘‘national relief’’ 

in the proposed Final Judgment. In its 

view, the Verizon/Alltel transaction is 

national in scope. PST Comment at 2, 4– 

6. PST recognizes, however, that the 

relevant markets could be viewed as ‘‘a 

series of CMA markets,’’ in which case 

‘‘a different analysis is appropriate.’’ 

PST Comment at 6. Therefore, PST also 

contends the plaintiffs should have 

challenged the merger in additional 

CMAs in Alabama and Georgia not 

alleged in the Complaint based on the 

market shares and spectrum holdings in 

these areas. It notes that plaintiff United 

States ‘‘has not addressed the CMAs 

where market shares and concentration 

are high enough to injure competition, 

though below the artificial thresholds 

for divestiture in the proposed final 

Judgment.’’ PST Comment at 7. 

Second, PST argues that the wireless 

assets to be divested in the Georgia 

CMAs alleged in the Complaint are 

inadequate to restore competition to 

premerger levels in these CMAs because 

they do not contain all the assets 

necessary for a divestiture purchaser to 

be a viable long-term competitor. PST 

Comment at 8. In order to cure the 

deficiencies it believes exist with 

respect to the proposed Final Judgment, 

PST proposes that wireless assets in the 

Columbus GA–AL MSA, Georgia RSA 5, 

and Alabama RSAs 5 and 8 be 

divested.6 PST Comment at 13. 

According to PST, the proposed Georgia 

divestiture areas are likely to be less 

profitable than those in neighboring 

urban areas, due to the higher costs of 

serving sparsely populated regions and 

the relatively low per-capita income of 

rural residents. PST Comment at 8–9. In 

particular, PST believes that a purchaser 

of the Georgia divestiture assets must 

obtain wireless assets in the Columbus 

GA–AL MSA to properly serve 

customers in the divestiture areas 

because Columbus is a major economic 

and cultural center in the region. PST 

Comment at 9–12. 

C. Response to Comment 

PST does not object to the divestiture 

of assets in the 94 CMAs, including the 

eight Georgia CMAs. Instead PST 

contends that the remedy should be 

broader and encompass divestitures of 

wireless assets in additional CMAs. PST 

contends that the merger will have an 

adverse impact on competition 

nationwide, but notes that no national 

relief was required. PST Comment at 2, 

5. Also, PST claims plaintiff United 

States should have identified, and 

alleged, competitive injury in four 

additional geographic areas: ‘‘Alabama 

RSAs 5 and 8, Georgia RSA 5, and the 

Columbus GA–AL MSA’’ and remedied 

harm in these areas in the proposed 

Final Judgment. PST Comment at 5, 7. 

These arguments are not ones that 

should concern the Court in its public 

interest inquiry. As the Court of Appeals 

has warned, the APPA does not 

authorize the court to ‘‘construct [its] 

own hypothetical case and then 

evaluate the decree against that case,’’ 

Microsoft, 56 F.3d at 1459, and yet, PST 

invites the Court to do exactly that. The 

Complaint alleges that the United States 

‘‘comprises numerous local geographic 

markets for mobile wireless 

telecommunications services,’’ 

Complaint 15, and the ‘‘relevant 

geographic markets * * * where the 

transaction would substantially lessen 

competition for mobile wireless 

telecommunications services are 

effectively represented by the 94 FCC 

spectrum licensing areas specified in 

Appendix A.’’ Complaint 16.7 Thus, the 

Complaint does not allege competitive 

harm in specific CMAs beyond the 94, 

nor did it allege a ‘‘national market’’ or 

harm in such a market. Absent such 

allegations, it would be inappropriate 

for this Court to inquire into the 

advisability of implementing a remedy 

to address competitive concerns in 

geographic areas outside the 94 alleged 

CMAs.8 The proposed Final Judgment’s 

lack of a remedy for purported harm in 

geographic markets that plaintiff United 

States neither found nor alleged is not 

a flaw, but rather a perfectly appropriate 

tailoring of relief to the alleged 

violation.9

PST’s second argument is that the 

divestiture of wireless assets in 

additional geographic areas in Georgia 

and Alabama is necessary because the 

Georgia divestiture assets contained in 

the proposed Final Judgment are 

insufficient to permit a divestiture buyer 

to fully replace the competition that 

would otherwise be lost in the CMAs 

where harm is alleged. PST Comment at 

8. According to PST, a purchaser of the 

Georgia assets cannot be a viable longterm competitor unless it also obtains 

the assets of neighboring areas of 

Georgia and Alabama, in particular the 

Columbus GA–AL MSA. PST Comment 

at 9–12. However, the information 

reviewed by plaintiff United States 

suggests that this contention regarding 

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9270 Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 

10This is the sixth case in which plaintiff United 

States has required such a divestiture in the last five 

years. United States et al. v. Cingular Wireless 

Corp., SBC Communications Inc., BellSouth Corp. 

and AT&T Wireless Services, Inc., Civ. No. 

1:04CV01850 (RBW) (D.D.C. filed Oct. 24, 2004); 

United States v. Alltel Corp. and Western Wireless 

Corp., Civ. No. 1:05CV01345 (RCL) (D.D.C. filed 

July 6, 2005); United States v. Alltel Corp. and 

Midwest Wireless Holdings, L.L.C., Civ. No. 06–3631 

(PJS/AJB) (D. Minn. filed Sept. 7, 2006); United 

States v. AT&T Inc. and Dobson Communications 

Corp., Civ. No. 1:07CV01952 (RMC) (D.D.C. filed 

Oct. 30, 2007); and United States et al. v. Verizon 

Communications Inc. and Rural Cellular Corp., Civ. 

No. 1:08CV00993 (EGS) (D.D.C. filed June 10, 2008). 

11The proposed Final Judgment states that 

plaintiff United States, in its sole discretion, upon 

consultation with the relevant plaintiff State, must 

be satisfied that the purchaser has the managerial, 

operational, technical and financial capability to 

compete effectively with the divested assets. 

Proposed Final Judgment, Section IV.H. 

12Although PST may wish to have the 

combination of wireless assets that is most 

attractive to its existing wireline customers in 

portions of Georgia RSAs 6 and 9 (close to the 

Columbus GA–AL MSA), plaintiff United States 

needs to consider what assets are necessary for a 

buyer, in general, to effectively compete. 

13 It is not, however, always necessary or 

appropriate to divest multiple CMAs in a state as 

a single group. See Proposed Final Judgment, 

Section IV.I (providing that three CMAs in Virginia, 

one CMA in Arizona, one CMA in California, and 

one CMA in New Mexico can be sold separately). 

14See http://wireless.fcc.gov/auctions/data/

maps/cntysv2000_census.xls. 

15PST Comment at 9–10. For instance, PST 

claims that Columbus is connected with Georgia 

RSAs 6 and 9 because of the colleges, hospitals, and 

cultural attractions located in Columbus. Id. 

16Plaintiff United States also found insufficient 

evidence to suggest that the proposed merger would 

cause competitive harm in the Columbus GA–AL 

MSA itself. 

17See http://wireless.fcc.gov/auctions/data/ 

maps/cntysv2000_census.xls (population of each 

county in 2000); http://www.census.gov/ 

population/www/cen2000/commuting/index.html 

(number of residents per county commuting to 

other counties for work in 2000). 

18 Id. 

19There are reasons to question whether the 

purchaser will need to be ‘‘unduly dependent on 

roaming.’’ PST Comment at 9. First, the purchaser 

may already own a wireless network that serves the 

surrounding area or other major portions of the 

country. Second, the purchaser may be able to offer 

carriers in the surrounding metropolitan areas of 

Macon, Columbus and Atlanta roaming services in 

the rural portions of the state in exchange for an 

agreement to allow its customers to roam in these 

metropolitan areas. 

20Although plaintiff United States does not 

expect there to be a lack of bidders for the Georgia 

divestiture assets, if no acceptable purchaser was 

proposed, plaintiffs could reconsider, under Section 

V.E of the proposed Final Judgment whether to 

require defendants to add additional assets to the 

divestiture package. 

the sufficiency of the remedy is 

ultimately without merit. 

Plaintiff United States has substantial 

expertise in constructing remedies and 

reviewing potential buyers of mobile 

wireless assets.10 Plaintiff United States 

carefully considers all relevant factors 

before agreeing to a divestiture 

settlement taking into account that the 

ability of a divestiture buyer to succeed 

in a particular area will depend on the 

specific nature of the area, the assets it 

is acquiring, and what other businesses 

and expertise the buyer already 

possesses. Plaintiff United States also 

carefully reviews the qualifications and 

business plans of proposed purchasers 

before approving divestitures.11

Divestiture packages are not tailored to 

favor one potential buyer over 

another.12 Instead, plaintiff United 

States seeks to ensure that the collection 

of assets will allow the purchaser to 

adequately compete. In order to replace 

the competition lost as a result of the 

merger, the buyer need not be the 

preferred provider of every customer but 

only be attractive to a large enough 

number of potential customers so as to 

be a viable competitor. 

Plaintiff United States recognizes that 

there are efficiencies of scale associated 

with serving a broad, contiguous 

geographic area, and it is largely for this 

reason that the proposed Final Judgment 

requires the Georgia divestiture assets to 

be sold together to a single acquirer.13

See CIS at 16–17; proposed Final 

Judgment, Section IV.I. The divestitures 

in Georgia required by the proposed 

Final Judgment include not only 

Georgia RSAs 6 and 9, PST’s existing 

service areas, but five other RSAs and 

the metropolitan area of Albany, GA. 

See proposed Final Judgment, Section 

IV.I. 

PST’s comment suggests that the 

assets being sold are insufficient to 

allow the purchaser to be a long-term 

viable competitor given the rural nature 

of the area. PST Comments at 8. 

However, the Georgia mobile wireless 

business assets cover a large portion of 

the state of Georgia, serving a 

population of more than 1.3 million 

people.14 The purchaser will acquire 

approximately 200,000 subscribers and 

a business that generates annual 

revenues of over $150 million. The asset 

package also includes a substantial 

amount of cellular spectrum which has 

significant advantages in serving rural 

areas, see CIS at 5–6, and the potential 

to not only provide mobile wireless 

services to local residents but also to 

sell roaming services to other providers 

who do not have networks in these areas 

of the state. Given the extent of the 

assets being sold, plaintiff United States 

believes that a buyer will be found that 

can effectively compete in the long 

term. 

Moreover, there are a number of 

viable wireless businesses in the United 

States that operate in a small number of 

license areas with similar revenues and 

subscriber counts. For example, 

Bluegrass Cellular offers service in 

approximately 10 license areas and has 

approximately 130,000 subscribers, and 

Alaska Communications Systems 

provides service in approximately seven 

license areas, has approximately 

144,000 subscribers and its 2007 

wireless revenues were approximately 

$137 million. 

PST’s other argument for additional 

divestitures hinges in large part on its 

belief that a wireless carrier seeking to 

provide service to the Georgia 

divestiture areas needs to be able to 

serve the Columbus GA–AL MSA as 

well because two of the Georgia 

divestiture RSAs (Georgia RSA 6 and 9) 

are economically interconnected with 

the Columbus GA–AL MSA.15 But 

plaintiff United States found 

insufficient evidence to support the 

contention that a buyer needs wireless 

assets in Columbus in order to 

successfully serve the proposed Georgia 

divestiture areas.16 For example, less 

than 1% of the residents of the eight 

CMAs in Georgia where wireless assets 

are to be divested commute to 

Columbus to work.17 Even if only 

Georgia RSAs 6 and 9 are considered, 

less than 3% of residents commute to 

Columbus.18 The addition of the 

Columbus GA–AL MSA to the 

divestiture package would therefore 

have little, if any, impact on the buyer’s 

ability to serve customers in the 

divestiture area at their homes and 

workplaces. Moreover, to the extent the 

divestiture buyer needs coverage of the 

Columbus GA–AL MSA for some small 

percentage of its minutes, it can likely 

achieve that via a roaming agreement, 

which wireless carriers routinely enter 

to expand their coverage to areas where 

they own no wireless facilities.19

This Court has held that the United 

States need not prove that the 

settlement represents a ‘‘perfect’’ 

remedy of the harms alleged in the 

Complaint. Rather, it needs to provide 

‘‘a factual basis for concluding that the 

settlements are reasonably adequate 

remedies for the alleged harms.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 17. In 

addition, the DC Court of Appeals has 

held that district courts should be 

‘‘deferential to the government’s 

predictions as to the effect of the 

proposed remedies.’’ Microsoft, 56 F.3d 

at 1461. There is no basis to believe that 

divestitures in the Columbus GA–AL 

MSA, or any other CMAs mentioned by 

PST, are necessary to ensure the success 

of the divested business, either because 

of a particularly strong nexus between 

Columbus and the divestiture 

properties, or because of a need to 

achieve greater scale.20

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Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 9271 

The settlement contained in the 

proposed Final Judgment ensures that a 

buyer of the proposed Georgia 

divestiture assets will have the assets 

necessary to establish a viable 

competitor in each of the CMAs alleged 

in plaintiffs’ Complaint. Accordingly, 

the settlement is within the reaches of 

the public interest and the proposed 

Final Judgment should be entered by 

this Court. 

IV. Conclusion 

After careful consideration of this 

public comment, plaintiff United States 

still concludes that entry of the 

proposed Final Judgment will provide 

an effective and appropriate remedy for 

the antitrust violation alleged in the 

Complaint and is, therefore, in the 

public interest. Pursuant to Section 

16(d) of the Tunney Act, plaintiff 

United States is submitting the public 

comment and its Response to the 

Federal Register for publication. After 

the comments and its Response are 

published in the Federal Register, 

plaintiff United States will move this 

Court to enter the proposed Final 

Judgment. 

Respectfully submitted, 

/s/ Hillary B. Burchuk llllllllll

Hillary B. Burchuk (D.C. Bar No. 366755), 

Lawrence M. Frankel (D.C. Bar No. 441532), 

Jared A. Hughes, 

Attorneys, Telecommunications & Media 

Enforcement Section, Antitrust Division, U.S. 

Department of Justice, City Center Building, 

1401 H Street, N.W., Suite 8000, Washington, 

D.C. 20530, (202) 514–5621, Facsimile: (202) 

514–6381. 

Certificate of Service 

I hereby certify that on February 17, 

2009, a copy of the foregoing Plaintiff 

United States’s Response to Public 

Comments was mailed via first class 

mail, postage prepaid, upon counsel for 

Public Service Communications, Inc., 

addressed as follows: 

David U. Fierst, Esq., Stein, Mitchell 

& Muse L.L.P., 1100 Connecticut Ave., 

NW., Suite 1100, Washington, DC 

20036. 

/s/ lllllllllllllllllll

Hillary B. Burchuk (D.C. Bar No. 366755) 

Telecommunications & Media Enforcement 

Section, Antitrust Division, U.S. Department 

of Justice, City Center Building, 1401 H 

Street, NW., Suite 8000, Washington, DC 

20530 (202) 514–5621, Facsimile: (202) 514– 

6381. 

January 12, 2009 

HAND DELIVERED 

Nancy M. Goodman 

Telecommunications & Media 

Enforcement Section 

Antitrust Division 

U.S. Department of Justice 

1401 H Street N.W., Suite 8000 

Washington D.C. 20530 

Re: United States et al v. Verizon 

Communications, Inc. and Alltel 

Corp. Case No. 1:08–cv–01878–EGS 

Dear Ms. Goodman: 

This comment is submitted on behalf 

of Public Service Communications, Inc., 

Public Service Telephone Company, 

and their related affiliates (collectively 

‘‘PST’’), in response to the Competitive 

Impact Statement filed with the United 

States District Court for the District of 

Columbia on October 30, 2008 by the 

Plaintiff United States of America in the 

above referenced case. The Impact 

Statement was published in the Federal 

Register on November 12, 2008. PST 

respectfully submits that the proposed 

acquisition by Verizon Wireless of Alltel 

Corporation will injure competition 

among wireless mobile telephone 

service providers nationwide and in 

multiple CMAs in Georgia and adjacent 

Alabama. The United States Department 

of Justice also concluded that the 

acquisition will injure competition in 

many CMAs around the country. 

We contend that the Department 

should modify the proposed settlement 

with the Defendants Verizon 

Communications, Inc. (‘‘Verizon’’) and 

Alltel Corporation (‘‘Alltel’’), by 

requiring them to divest overlapping 

cellular systems in four Georgia and 

Alabama CMAs, namely CMA 153 

(Columbus, GA MSA), CMA 375 

(Georgia 5—Haralson RSA), CMA 311 

(Alabama 5—Cleburne RSA) and CMA 

314 (Alabama 8—Lee RSA). 

As we will explain, the central flaw 

in the proposed Consent Judgment is 

that it does not adequately ameliorate 

the competitive injury found by the 

Department, and lacks any reasoned 

analysis why the relief obtained is 

limited. 

More specifically, the Department 

recognized that this acquisition will 

combine the second and fifth ranked 

competitors in a highly concentrated 

national market, but did not require any 

national relief. The Department also 

recognized that the acquisition will 

cause injury in many CMAs, but 

required divestitures only in 94 CMAs 

where the combined post-acquisition 

market share for Verizon and Alltel 

exceeds 55% and the post-acquisition 

Herfindahl-Hirschman Index (HHI) 

exceeds 4000. We do not object to the 

requirement that overlapping assets in 

these 94 CMAs be divested. We object 

to the failure to require divestiture in 

CMAs where post-acquisition shares do 

not reach these astronomical levels but 

nonetheless exceed normal thresholds. 

In other words, according to the 

competitive impact statement, no 

divestiture is required where the 

combined share is less than 55% or the 

post-acquisition HHI is less than 4000 

even though normal merger analysis 

finds competitive injury at much lower 

levels. 

The Department also failed to 

consider whether it is practicable to 

divest mobile phone assets in rural 

CMAs with small populations without 

also divesting neighboring urban areas. 

Entry costs in the mobile telephone 

industry are steep, and entry is not 

feasible without a significant population 

base in a defined geographic area. 

Description of PST 

PST is a family-owned 

telecommunications company providing 

wireline telephone, cable television and 

internet services in 1,050 square miles 

of territory between Macon and 

Columbus, Georgia. Its headquarters is 

in Reynolds, a small town with a 

population of slightly more than 1,000 

persons. 

The service area covered by PST is 

mostly rural, with a number of small 

mostly farming communities. It is 

sparsely populated. PST serves a total of 

10,724 wireline customers in the 

following counties: Bibb (1,829 lines), 

Crawford (3,169 lines), Macon (108 

lines), Marion (64 lines), Monroe (288 

lines), Muscogee (20 lines), Talbot 

(1,590 lines), Taylor (3,492 lines), and 

Upson (164 lines). PST is interested in 

entering the mobile cellular market in 

its current service area, and in 

surrounding, more populous areas. 

However, as described below, PST does 

not believe that the proposed divestiture 

of cellular markets in the State of 

Georgia, as presently endorsed by the 

Department, will yield a viable 

competitive operation, unless the 

Columbus market and certain adjoining 

properties are added. 

Description of Acquisition 

Verizon Wireless, a joint venture of 

Verizon Communications, Inc. and 

Vodafone, has entered into an 

agreement to acquire Alltel. Verizon is 

paying $5.9 billion, and will become 

responsible for debt of $22.2 billion. 

The total value of the acquisition is 

therefore approximately $28.1 billion. 

Verizon is the second largest mobile 

wireless service provider in the United 

States. It has recently acquired the 10th 

largest service provider. Alltel is the 

fifth largest mobile wireless service 

provider. The Competitive Impact 

Statement indicates (at p. 4) that the 

combined entity will control 

approximately 36 percent of all 

revenues generated in the United States 

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9272 Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 

1FCC’s Twelfth Annual Report and Analysis of 

Competitive Market Conditions With Respect to 

Commercial Mobile Services (January 28, 2008) at 

6, There have been a number of significant 

acquisitions since the 12th Annual Report, 

including Verizon’s acquisition of RCC, AT&T’s 

acquisition of Dobson, and the T-Mobile acquisition 

of SunCom. As a result of these acquisitions, 

concentration is likely to be higher than it was at 

the time of the 12th Annual Report, but that 

information is not available to the public. 

from mobile wireless communications 

services. 

This is the second major wireless 

acquisition by Verizon in recent 

months. On June 10, 2008, Verizon and 

the Department entered into a consent 

Judgment as a result of the acquisition 

of Rural Cellular Corporation (‘‘RCC’’). 

According to the Competitive Impact 

Statement filed in that case, prior to that 

acquisition, Verizon was the second 

largest provider of mobile wireless 

telecommunications services in the 

United States. At the time that 

acquisition was announced (mid 2007), 

Verizon had more than 65 million 

subscribers, and annual revenues of $43 

billion. According to the FCC’s Twelfth 

Annual Report and Analysis of 

Competitive Market Conditions With 

Respect to Commercial Mobile Services 

(January 28, 2008), Verizon, with 59 

million subscribers, was second only to 

AT&T, which had 60.9 million 

subscribers. The Competitive Impact 

Statement (at p. 3) indicates that 

Verizon’s subscriber count has now 

grown to 70 million. 

In the State of Georgia, the proposed 

Final Judgment would require that 

Verizon and Alltel divest the following 

markets: 

Albany MSA (CMA 261) 

GA RSA 6 (CMA 376) 

GA RSA 7 (CMA 377) 

GA RSA 8 (CMA 378) 

GA RSA 9 (CMA 379) 

GA RSA 10 (CMA 380) 

GA RSA 12 (CMA 382) 

GA RSA 13 (CMA 383) 

In the State of Alabama, the proposed 

Final Judgment would require that 

Verizon and Alltel divest the following 

markets: 

Dothan MSA (CMA 246) 

AL RSA 7 (CMA 313) 

PSC is on record asking the Federal 

Communications Commission (‘‘FCC’’) 

and the Department to order the 

divestiture of the following additional 

markets, in order to ensure the creation 

of a viable competitor within the States 

of Georgia and Alabama: 

Columbus MSA (CMA 153) 

GA RSA 5 (CMA 375) 

AL RSA 5 (CMA 311) 

AL RSA 8 (CMA 314) 

PST notes that the Albany MSA and 

GA RSA 6 were not included in the 

original divestiture proposal formulated 

by Verizon and Alltel, but were added 

only upon review by the Department, 

following comments by PST showing 

the need to add these (and other) 

markets to the divestiture list. 

Injury to Competition 

It is generally accepted that the 

relevant product market for analyzing 

an acquisition of mobile wireless service 

providers is mobile wireless 

telecommunications. See, for example, 

United States v. Verizon 

Communications, Inc. and Rural 

Cellular Corporation, (D.D.C. 2008), 

Competitive Impact Statement at 4 

(‘‘there are no cost-effective alternatives 

to mobile wireless telecommunications 

services’’) (RCC Impact Statement). See 

also In the Matter of AT&T Inc. and 

Dobson Communications Corp., WT 

Docket #07–153 (11/15/07) at ¶ 21 

(‘‘mobile telephony service,’’ including 

both voice and data over mobile 

wireless telephones). 

Geographic markets in mobile 

telephone acquisitions are generally 

based on the FCC spectrum licensing 

areas, called Cellular Market Areas 

(CMAs), consisting of Metropolitan 

Statistical Areas (MSAs) and Rural 

Service Areas (RSAs). See, e.g., RCC 

Impact Statement at 4. 

In this case, Verizon in its application 

with the FCC for approval of the 

acquisition described wireless 

competition as being national in scope. 

Description of Transaction, In re 

Applications of Atlantis Holdings LLC 

and Cellco Partnership d/b/a Verizon 

Wireless, June 13, 2008 at 29. Verizon’s 

expert report submitted to the FCC 

addressed only the national markets, not 

the CMAs. Declaration of Dennis 

Carlton, Allan Shampine, and Hal Sider, 

June 13, 2008 at 4, 20. The Department 

noted the nationwide impact 

(Competitive Impact Statement at 3) but 

ordered divestitures only at the CMA 

level. 

If the market is viewed as nationwide, 

the acquisition will clearly have an 

adverse impact on competition. Market 

shares and concentration are high. 

According to the FCC, the HHI was 

nearly 2700 at the end of 2006, and the 

market has become more concentrated 

since then. FCC’s Twelfth Annual 

Report and Analysis of Competitive 

Market Conditions With Respect to 

Commercial Mobile Services (January 

28, 2008) (‘‘Twelfth Annual Report’’) at 

6. It is not possible to calculate the postacquisition HHI without knowing more 

about Alltel’s volume in the 94 CMAs to 

be divested and the CMAs to be 

retained, but the increase is highly 

likely to exceed the thresholds in the 

merger guidelines. According to the 

Twelfth Annual Report at 17, Verizon’s 

nationwide share in 2006 was about 

26%. Thus, any non-negligible 

acquisition of Alltel will necessarily 

cause the HHI to increase by more than 

50, and a very small acquisition will 

cause an increase of 100. 

As noted in the Competitive Impact 

Statement (at page 4), the Department 

found in the case of this mega-merger 

that ‘‘the proposed transaction, as 

initially agreed to by the defendants, 

would lessen competition substantially 

for mobile wireless telecommunications 

services in a large number of CMAs,’’ 

including CMAs in the States of Georgia 

and Alabama. Pursuant to their analysis 

of the merger, the Plaintiffs United 

States of America and several individual 

states (including Georgia and Alabama) 

have ‘‘concluded that Verizon’s 

proposed acquisition of Alltel likely 

would substantially lessen competition, 

in violation of Section 7 of the Clayton 

Act, in the provision of mobile wireless 

telecommunications services in the 

relevant geographic areas alleged in the 

Complaint.’’ The primary remedy for 

this impending adverse affect on 

competition is the proposed 

requirement that Verizon divest the 

affected markets. 

As discussed below, it is not clear 

from the Competitive Impact Statement 

that competition will not be harmed 

within the CMA 153 (Columbus, GA 

MSA), CMA 375 (Georgia 5—Haralson 

RSA), CMA 311 (Alabama 5—Cleburne 

RSA) and CMA 314 (Alabama 8—Lee 

RSA) markets. However, even if it is 

assumed arguendo that these individual 

markets will not be adversely affected, 

divestiture of these markets is necessary 

to ensure that the competitor to be 

created in the State of Georgia is a viable 

one, and will be able to continue 

effective operations as necessary to 

offset the harms caused by the 

combination of two of the biggest 

competitors in the state. 

Competitive Harm in Columbus and 

Surrounding CMAs 

If the market is viewed as a 

nationwide market, then limited 

divestitures in smaller geographic 

markets scattered around the country 

may be insufficient to restore 

competitive vigor. Given that the preacquisition nationwide HHI is already 

approximately 2700,1 it is a fair 

assumption that the post-acquisition 

HHI, even assuming some divestitures, 

will still be very high, and that the 

increase will exceed the recognized 

benchmarks for injury to competition. 

If the market is viewed as a series of 

CMA markets, a different analysis is 

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2The Department will have access to more recent 

market share information. We believe that the 

market will have grown more concentrated in the 

last year and a half, and the Verizon share (postacquisition of RCC) will be larger than it was in 

December 2006. 

3The Department does not address the possibility 

of a CMA with a post-acquisition HHI in excess of 

2800 but less than 4000. In any such CMA, the FCC 

would find an injury to competition, as would the 

normal Department merger analysis, but no 

divestiture will be required. 

4 In the six Georgia CMAs where the proposed 

Final order requires divestitures, the overlap is 

typically less. In CMA 377 (6 Georgia counties) 

there is no overlap in two of the counties, and an 

overlap of 82 in the other four. In CMA 378 (10 

Georgia counties), the overlap is 72 MHz in 9 of the 

counties and 82 in the tenth. In CMA 379 (12 

Georgia counties), the overlap is 82 in 6 counties 

and 92 in the other 6. In CMA 380 (12 Georgia 

counties), the overlap is 102 in one county, 82 in 

9 and 72 in two. In CMA 382 (6 Georgia counties), 

the overlap ranges from 72 to 112. In CMA 383 (9 

Georgia counties), the overlap is 102 MHz in two 

counties and 82 in the other 7. Combined spectrum 

is therefore likely to indicate a competitive problem 

in the CMAs to be divested and even more so in 

the adjoining CMAs Verizon wants to retain. 

appropriate. As noted above, the 

Department has found 94 CMAs where 

the acquisition will result in 

concentration that far exceeds normal 

thresholds, but the Department has not 

addressed whether there are other 

CMAs where the acquisition will lead to 

concentration that exceeds threshold 

levels, though not by such gross 

amounts. 

Nationwide HHI, according to the 

FCC, was 2674 at the end of 2006. 12th 

Annual Report at 6. According to the 

1997 Horizontal Merger Guidelines, a 

market is considered highly 

concentrated when its HHI exceeds 

1800, which this does by a substantial 

amount. According to the FCC figures 

for year end 2006, the Verizon 

acquisition of Alltel (assuming no 

divestitures) will increase the HHI by 

about 260.2 According to the Merger 

Guidelines, in a highly concentrated 

market, an increase in the HHI of 50 or 

more points potentially raises 

significant competitive concerns. 

Increases of more than 100 points are 

presumptively likely to create or 

enhance market power or facilitate its 

exercise. 

Thus, on a nationwide basis, the 

market is highly concentrated, and this 

acquisition will increase concentration 

significantly. It is not possible for a 

party other than the Department or the 

FCC to compute HHI in any particular 

CMA. However, the post-acquisition 

HHI on a nationwide basis is highly 

likely to exceed 2800 with an increase 

well in excess of 100. Moreover, the 

nationwide increase in HHI is likely to 

exceed 250. Thus, it is a fair inference 

that in individual CMAs the postacquisition HHI will exceed acceptable 

levels. The Department is requiring 

divestitures only where the postacquisition HHI exceeds 4000. No 

divestitures are required where the postacquisition HHI is between 2800 and 

4000, although by any realistic analysis, 

an acquisition resulting in such high 

concentrations is likely to injure 

competition. The Department has not 

addressed the CMAs where market 

shares and concentration are high 

enough to injure competition, though 

below the artificial thresholds for 

divestiture in the proposed final 

Judgment. 

There is another way to identify 

CMAs where the acquisition will lead to 

injury. The FCC finds likely injury to 

competition where, in any particular 

CMA, there is either (1) a postacquisition HHI of 2800 with an 

increase of 100,3 or (2) an increase of 

250 regardless of the HHI, or (3) the 

acquiring party will hold a 10 percent 

or greater interest in 95 MHz of cellular, 

PCS, SMR and 700 MHz spectrum. In 

the Matter of AT&T, Inc. and Dobson 

Communications Corp., WT Docket, 07– 

153 (11/19/07) at ¶ 40. It is possible to 

measure Verizon’s and Alltel’s spectrum 

in specific CMAs. For example, in CMA 

153, the Verizon/Alltel combination 

will hold 104 MHz in each of the three 

constituent counties (one in Alabama 

and two in Georgia); and in CMA 314, 

covering 5 counties in adjacent 

Alabama, the combination will hold 107 

MHz in one county, and varying 

amounts ranging from 72 to 92 in the 

other four.4

Despite PST’s comments raising 

concerns about the above additional 

markets in Georgia and Alabama, the 

Competitive Impact Statement does not 

furnish an HHI analysis for, or 

otherwise specifically address, these 

markets. PST respectfully requests that 

the Department amend the Competitive 

Impact Statement to do so. However, as 

discussed below, even if the HHI for the 

additional divestiture markets does not 

surpass the anticompetitive level, the 

relationship of these markets to the 

areas that will suffer harm must be 

evaluated. 

Divestitures 

The proposed divestitures must also 

be evaluated from the perspective of 

what is necessary to restore 

competition. As the Department 

recognizes in the Antitrust Division 

Policy Guide to Merger Remedies, a 

divestiture will be ineffective to restore 

competition unless it includes all assets 

necessary for the purchaser to be an 

effective long-term competitor. Indeed, 

the Competitive Impact Statement 

confirms (at p. 13) that the States of 

Georgia and Alabama have an interest 

in, and consultation right to, ensure that 

the purchaser of the divested Alltel 

assets in their states will be ‘‘a viable, 

ongoing business that can compete 

effectively in each relevant area.’’ 

In this instance, the proposed 

divestitures in Georgia will not include 

necessary assets. The inadequacy flows 

from the fact that the divestiture in 

Georgia will be restricted to certain 

CMAs, and those CMAs do not include 

the high density urban areas and 

corridors of commerce (including 

neighboring portions of Alabama) 

needed for successful operation of a 

wireless network. The CMAs where the 

proposed divestitures will occur are 

generally populated by lower income 

residents than in the CMAs to be 

retained. Consequently, the residents of 

the to-be-divested CMAs are less likely 

to have mobile devices and more likely 

to be price conscious. In other words, 

profits in those areas are likely to be 

lower than in the CMAs in which 

Verizon seeks to retain assets and 

customers of Alltel. Moreover, the 

CMAs in Georgia where assets will be 

divested are sparsely populated in 

relation to the areas to be retained by 

Verizon, resulting in increased 

operational costs. 

PST analyzed the counties included 

in the six Georgia CMAs in which 

Verizon originally proposed to divest 

overlapping properties. PST compared 

them to the counties in the additional 

CMAs the overlapping assets of which 

PST contended should also be divested. 

This analysis was provided to the 

Department. The analysis showed that 

in the Verizon-chosen CMAs, 

populations are generally lower than in 

the CMAs proposed by PST. As 

recognized in the Remedies Guide, 

where an installed base of customers is 

required in order to operate at an 

effective scale, the divested assets 

should convey that base, or quickly 

enable the purchaser to obtain an 

installed customer base. The mobile 

wireless market requires significant 

infrastructure or it will be unduly 

dependent on roaming, which under the 

best of circumstances will not be 

profitable. 

In CMA 377, where Verizon agreed to 

divest overlapping properties, there are 

six counties. Two of them (as of the 

2000 census) had populations of about 

45,000, one had 21,000, and the other 

three were in the 8,000–10,000 range. 

By contrast, Muscogee County in CMA 

153, where Verizon and Alltel 

cumulatively hold 104 MHz of spectrum 

but which Verizon is not required to 

divest, the 2000 population was about 

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9274 Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 

186,000. The adjacent Russell County, 

Alabama (also in CMA 153) had a 2000 

population of about 50,000. 

The size disparity is important for 

reasons other than the obvious need for 

a customer base large enough to earn a 

fair return. One aspect of the 

competition among the wireless service 

providers is the availability of attractive 

cell phone devices. For example, 

AT&T’s ability to offer its customers the 

iPhone was a major competitive benefit 

for AT&T. The smaller wireless carriers 

are disadvantaged in obtaining attractive 

devices, and the population disparity 

between the CMAs Verizon will be 

permitted to retain and those it is will 

be obligated to divest will make it that 

much more difficult for any new entrant 

to obtain the customer base necessary to 

gain access to the more desirable 

telephones. There are also certain 

mandates imposed by the FCC. For 

example, there must be a system of 

automatic tracking of cell phones used 

to call 911. These mandates involve 

substantial fixed costs, which will 

constitute a significant barrier to entry 

by any small provider of wireless 

service, but will not be a major problem 

if the costs can be spread among a large 

enough customer base. For this reason 

also, the proposed consent judgment 

allowing Verizon to keep mobile phone 

assets in the more populous areas of 

Georgia while divesting the less 

populous areas will not restore the 

competition lost as a result of the 

acquisition. 

Moreover, the average household 

income in the CMAs chosen for 

divestiture by Verizon is lower than in 

the state as a whole or in the CMAs 

where we contend additional 

divestitures should be ordered. Median 

household income in Georgia in 2004 

was $42,600. In the 6 counties in CMA 

377, the median household income in 

2004 ranged from about $24,000 to 

$33,500. In CMA 153, median 

household income in 2004 was $35,100 

in Muscogee, nearly $35,500 in 

Chattahoochie, and $29,600 in Russell 

County, Alabama. 

The inclusion of CMA 261 and CMA 

376 in the divestiture markets, following 

PST’s showing that these markets 

should be included, constituted a step 

in the right direction. However, this step 

does not go far enough, because the 

linchpin for the areas to be divested in 

Georgia is the Columbus CMA, and 

surrounding suburban areas. In this 

regard, Columbus furnishes the 

residents of markets such as the GA 6 

RSA and GA 9 RSA with the following: 

a. Nine colleges, including Columbus 

State University, Columbus Technical 

College, Beacon College, Meadows 

Junior College, Calvary Christian Life 

Ministries, the Medical Center, Inc. 

School of Radiologic Technology, and 

others. It is well-known that college 

students are prime users of mobile 

telephones, and often use only mobile 

phones rather than landlines. 

b. Columbus Georgia Convention and 

Trade Center provides access to 182,000 

sq. ft. usable floor space, 27 breakout 

rooms, Ballrooms and Exhibit Halls. 

c. RiverCenter for the Performing Arts 

provides regional access to the 

Columbus Symphony Orchestra, 

Broadway performances, comedy, and 

musical entertainment. 

d. Multiple hospitals, including the 

St. Francis Hospital; Columbus Doctors 

Hospital; Hughston Orthopedic 

Hospital; and Columbus Regional 

Medical Center, among other medical 

facilities. 

More importantly, Columbus is where 

the residents of the more rural markets 

go for jobs, major medical procedures, 

and to market their produce and goods. 

This fact is confirmed by both preexisting private sector analyses of the 

commercial and societal factors 

impacting areas to be divested in 

Georgia, performed by Rand-McNally. 

The FCC uses the CMA in analyzing 

regulatory aspects of cellular service 

transactions, because long ago, cellular 

licenses were awarded along CMA 

boundaries. However, these boundaries 

do not necessarily reflect the realities of 

the marketplace. In this regard, the FCC 

has recognized that Rand McNally’s 

Major Trading Areas (MTAs) and Basic 

Trading Areas (BTAs) as more 

indicative of real-world marketplace 

factors. Thus, the FCC decided to use 

the Rand-McNally areas for certain 

mobile telecommunications spectrum 

auctions, stating: 

We conclude that a combination of MTA 

and BTA service areas would promote the 

rapid deployment and ubiquitous coverage of 

PCS and a variety of services and providers. 

We recognize that the majority of parties 

express support for MSA/RSAs as the 

definition of PCS service areas. We conclude, 

however, that using MSAs/RSAs likely 

would result in unnecessary fragmentation of 

natural markets. MTAs and BTAs were 

designed by Rand McNally based on the 

natural flow of commerce. Specifically, the 

trading area ‘‘boundaries have been drawn on 

a county-line basis because most statistics 

relevant to marketing are published in terms 

of whole counties. The boundaries have been 

determined after an intensive study of such 

factors as physiography, population 

distribution, newspaper circulation, 

economic activities, highway facilities, 

railroad service, suburban transportation, and 

field reports of experienced analysts [citing 

Rand McNally 1992 Commercial Atlas & 

Marketing Guide at 39]. 

See Amendment of the Commission’s 

Rules to Establish New Personal 

Communications Services, Second 

Report and Order, 73 RR 2d 1477, 8 FCC 

Rcd 7700, 7732 [1993 FCC LEXIS 6517] 

(October 22, 1993). 

Rand McNally also rates cities 

individually based on their economic 

function. Columbus is a 3–AA or ‘‘major 

significant local business center,’’ 

meaning it is the most important city in 

the area for purposes of local business. 

Rand McNally’s formulation of its 

MTAs and BTAs, and the designation of 

business centers, takes into 

consideration whether a city or town is 

a natural center for shopping-goods 

purchases, entertainment, education 

and medical care. See Rand McNally 

Atlas, ‘‘Economic Data for the United 

States’’, p. 48 (1984). As shown above, 

Columbus serves as the center of 

shopping, entertainment, education and 

medical care for the Western GeorgiaEastern Alabama area. 

Significantly, the Columbus BTA 

includes the following counties: 

Barbour ............................................... AL 

Russell ................................................ AL 

Chattahoochee .................................... GA 

Harris .................................................. GA 

Marion ................................................. GA 

Muscogee ........................................... GA 

Quitman .............................................. GA 

Schley ................................................. GA 

Stewart ................................................ GA 

Sumter ................................................ GA 

Talbot .................................................. GA 

Webster ............................................... GA 

Of the above counties, two (Harris and 

Talbot) are part of the GA 6 RSA area 

that the proposed Final Judgment 

proposes to divest. And six of the 

counties (Marion, Quitman, Schley, 

Stewart, Sumter and Webster) are part of 

the GA 9 RSA area that would be 

divested. Another county (Barbour) is 

part of the AL 8 RSA. The remaining 

three counties (Russell, Chattahoochee 

and Muscogee) make up the Columbus 

MSA. Thus, Rand-McNally’s analysis of 

key economic, health and social factors 

indicates that a significant part of the 

Columbus Basic Trading Area includes 

areas that are to be divested. The 

proposed divestiture will not only 

create a gap in coverage, but will leave 

the purchaser without the socioeconomic heart of the market it is trying 

to serve. This is a formula for failure as 

a competitor: Without the population 

contained in the Columbus MSA and 

surrounding suburbs such as the AL 5 

and 8 RSAs and the GA 5 RSA, it will 

be difficult if not impossible for the 

purchaser to achieve the efficiencies 

recognized by the Department as 

important to a viable operation. See 

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Federal Register / Vol. 74, No. 40 / Tuesday, March 3, 2009 / Notices 9275 

5The possibility of reaching a roaming agreement 

for coverage of the Columbus MSA is of little 

comfort. A provider’s only significant protection 

against unreasonably high roaming fees is the 

ability to comparison shop among multiple service 

providers in other geographic areas. Thus, any 

acquisition that removes a significant potential 

supplier of roaming services may increase roaming 

fees to other, smaller competitors. That is the 

potential problem here. Alltel provides service 

primarily in rural areas where roaming alternatives 

may be limited. Removing it from the market 

enhances Verizon’s market power to raise roaming 

rates. Verizon reassured the FCC that it will honor 

all existing roaming contracts. That is a meaningless 

gesture. Of course it will honor existing contracts; 

failure to do so is breach and exposes Verizon to 

litigation. The real question is whether the 

acquisition will affect Verizon’s incentives to enter 

into future roaming contracts at a reasonable price. 

Where one potential alternative source of roaming 

service is removed from an already-highly 

concentrated market, the answer is obvious. 

Verizon will have less incentive to offer low 

roaming fees for future contracts. 

Competitive Impact Statement at p. 16. 

And without this high density, low cost 

population area, it will be more 

expensive and difficult for the 

purchaser to meet the FCC’s E911 and 

other regulatory mandates, because 

there will be far fewer customers over 

which to spread the fixed costs of such 

compliance. Moreover, without 

coverage into Columbus, the area where 

a large part of the population of the 

divested area travel for economic, 

health, entertainment and other reasons, 

customers will see little benefit in 

keeping their service with the 

purchaser.5 As a result, the purchaser 

will fail as a competitor in a relatively 

short period of time; and all of the 

competitive harms to consumers that 

the Plaintiffs have concluded could 

happen in the absence of another source 

of competition will indeed happen. 

The need to provide a fair opportunity 

to succeed is particularly necessary 

given the current economic climate. 

Credit is tight, and consumers are 

resistant to spending of all kinds. 

Prospective purchasers (other than the 

major carriers, a purchase by which 

would also increase concentration) will 

have a difficult time making an 

acquisition in Georgia and Alabama and 

making it work. Excluding the 

Columbus area from any divestiture will 

make it that much more difficult to 

restore competition. 

Conclusion 

For these reasons, we urge on behalf 

of PST that the Department modify the 

proposed Final Judgment, to require that 

Verizon divest the acquired assets in 

CMA 153, 311, 314 and 375, as well as 

the other Georgia and Alabama CMAs 

listed in Competitive Impact Statement. 

Sincerely, 

David U. Fierst 

cc: Hillary B. Burchuk, DOJ, Lawrence 

M. Frankel, DOJ, Jared A. Hughes, 

DOJ 

BILLING CODE 4410–11–P 

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[FR Doc. E9–4341 Filed 3–2–09; 8:45 am] 

BILLING CODE 4410–11–C 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Notice of Determinations Regarding 

Eligibility To Apply for Worker 

Adjustment Assistance and Alternative 

Trade Adjustment Assistance 

In accordance with Section 223 of the 

Trade Act of 1974, as amended (19 

U.S.C. 2273) the Department of Labor 

herein presents summaries of 

determinations regarding eligibility to 

apply for trade adjustment assistance for 

workers (TA–W) number and alternative 

trade adjustment assistance (ATAA) by 

(TA–W) number issued during the 

period of February 9 through February 

13, 2009. 

In order for an affirmative 

determination to be made for workers of 

a primary firm and a certification issued 

regarding eligibility to apply for worker 

adjustment assistance, each of the group 

eligibility requirements of Section 

222(a) of the Act must be met. 

I. Section (a)(2)(A) all of the following 

must be satisfied: 

A. A significant number or proportion 

of the workers in such workers’ firm, or 

an appropriate subdivision of the firm, 

have become totally or partially 

separated, or are threatened to become 

totally or partially separated; 

B. The sales or production, or both, of 

such firm or subdivision have decreased 

absolutely; and 

C. Increased imports of articles like or 

directly competitive with articles 

produced by such firm or subdivision 

have contributed importantly to such 

workers’ separation or threat of 

separation and to the decline in sales or 

production of such firm or subdivision; 

or 

II. Section (a)(2)(B) both of the 

following must be satisfied: 

A. A significant number or proportion 

of the workers in such workers’ firm, or 

an appropriate subdivision of the firm, 

have become totally or partially 

separated, or are threatened to become 

totally or partially separated; 

B. There has been a shift in 

production by such workers’ firm or 

subdivision to a foreign country of 

articles like or directly competitive with 

articles which are produced by such 

firm or subdivision; and 

C. One of the following must be 

satisfied: 

1. The country to which the workers’ 

firm has shifted production of the 

articles is a party to a free trade 

agreement with the United States; 

2. The country to which the workers’ 

firm has shifted production of the 

articles to a beneficiary country under 

the Andean Trade Preference Act, 

African Growth and Opportunity Act, or 

the Caribbean Basin Economic Recovery 

Act; or 

3. There has been or is likely to be an 

increase in imports of articles that are 

like or directly competitive with articles 

which are or were produced by such 

firm or subdivision. 

Also, in order for an affirmative 

determination to be made for 

secondarily affected workers of a firm 

and a certification issued regarding 

eligibility to apply for worker 

adjustment assistance, each of the group 

eligibility requirements of Section 

222(b) of the Act must be met. 

(1) Significant number or proportion 

of the workers in the workers’ firm or 

an appropriate subdivision of the firm 

have become totally or partially 

separated, or are threatened to become 

totally or partially separated; 

(2) The workers’ firm (or subdivision) 

is a supplier or downstream producer to 

a firm (or subdivision) that employed a 

group of workers who received a 

certification of eligibility to apply for 

trade adjustment assistance benefits and 

such supply or production is related to 

the article that was the basis for such 

certification; and 

(3) Either— 

(A) The workers’ firm is a supplier 

and the component parts it supplied for 

the firm (or subdivision) described in 

paragraph (2) accounted for at least 20 

percent of the production or sales of the 

workers’ firm; or 

(B) A loss or business by the workers’ 

firm with the firm (or subdivision) 

described in paragraph (2) contributed 

importantly to the workers’ separation 

or threat of separation. 

In order for the Division of Trade 

Adjustment Assistance to issue a 

certification of eligibility to apply for 

Alternative Trade Adjustment 

Assistance (ATAA) for older workers, 

the group eligibility requirements of 

Section 246(a)(3)(A)(ii) of the Trade Act 

must be met. 

1. Whether a significant number of 

workers in the workers’ firm are 50 

years of age or older. 

2. Whether the workers in the 

workers’ firm possess skills that are not 

easily transferable. 

3. The competitive conditions within 

the workers’ industry (i.e., conditions 

within the industry are adverse). 

Affirmative Determinations for Worker 

Adjustment Assistance 

The following certifications have been 

issued. The date following the company 

name and location of each 

determination references the impact 

date for all workers of such 

determination. 

The following certifications have been 

issued. The requirements of Section 

222(a)(2)(A) (increased imports) of the 

Trade Act have been met. 

TA–W–64,881; Dalmar Precision, Inc., 

Saegertown, PA: January 13, 2008. 

The following certifications have been 

issued. The requirements of Section 

222(a)(2)(B) (shift in production) of the 

Trade Act have been met. 

None. 

The following certifications have been 

issued. The requirements of Section 

222(b) (supplier to a firm whose workers 

are certified eligible to apply for TAA) 

of the Trade Act have been met. 

None. 

The following certifications have been 

issued. The requirements of Section 

222(b) (downstream producer for a firm 

whose workers are certified eligible to 

apply for TAA based on increased 

imports from or a shift in production to 

Mexico or Canada) of the Trade Act 

have been met. 

None. 

Affirmative Determinations for Worker 

Adjustment Assistance and Alternative 

Trade Adjustment Assistance 

The following certifications have been 

issued. The date following the company 

name and location of each 

determination references the impact 

date for all workers of such 

determination. 

The following certifications have been 

issued. The requirements of Section 

222(a)(2)(A) (increased imports) and 

Section 246(a)(3)(A)(ii) of the Trade Act 

have been met. 

TA–W–64,278; Purcell Systems, 

Spokane Valley, WA: October 13, 

2007. 

TA–W–64,584; Master Brand Cabinets, 

Leased Workers from Express 

Personnel, Grants Pass, OR: 

November 24, 2007. 

TA–W–64,922; International Staple & 

Machine Co., Butler, PA: January 

18, 2009. 

TA–W–64,924; Phelps Dodge Chino, 

Inc., Freeport-McMoran Corp, 

Hurley, NM: January 15, 2008. 

TA–W–65,106; Wilson Sporting Goods, 

Team Sports Division, Sparta, TN: 

January 26, 2008. 

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