March 10, 2000
|Re:||Qwest Communications International Inc. and US WEST, Inc., Applications for Transfer of Control of Domestic and International Section 214, 310 Authorizations and Application to Transfer Control of a Submarien Cable Landing License, Memorandum Opinion and Order, CC Docket No. 99-272.|
I concur in the Commission's decision conditionally to approve Qwest and US WEST's application to transfer control of certain lines and licenses in connection with the parties' planned merger transaction. I agree that our final approval of this transfer application will turn on whether the parties have demonstrated that they will be in compliance with section 271 of the Telecommunications Act of 1996 when this transaction is complete. As I have made clear previously, however, I disagree with the wide-ranging, quasi-antitrust analysis the Commission applies to determine whether a license transfer is in the "public interest," and I do not join in those portions of this Order that follow this approach.
It is appropriate to condition approval of this license transfer application on section 271 compliance. A company may transfer lines or licenses to another company only upon a determination by this Commission that such transfers are consistent with the "public interest." See 47 U.S.C. § 214, 310(d). In my view, the inquiry the Commission conducts pursuant to these statutory provisions should be transparent, straightforward, and predictable. A chief consideration should be whether the transfer would result in a violation of the statute or of the Commission's rules. In addition, the focus should be on whether the specific transfers in question - as opposed to the merger in general - would serve the public interest.
The proposed license transfers raise the prospect of statutory violations. Qwest currently provides interLATA services in US WEST's in-region states. Because section 271 prohibits US WEST and its affiliates from providing in-region interLATA services until the requirements of section 271 have been met, completion of the merger - as matters now stand - would place the new company in violation of the statute. It is therefore necessary for Qwest to cease providing interLATA services originating in US WEST's in-region states before the merger transaction is finalized.
At this point, based on the information the parties have provided to the Commission, it is not possible to determine whether the ultimate divestiture will comply with section 271. Among other things, it is necessary to consider the extent to which the merged company will provide the buyer with support services and whether it will attempt jointly to market services with the buyer. I therefore agree with Commission that approval of this license transfer application must be conditioned on a review of the terms of the actual divestiture agreement to an actual buyer.
Other aspects of the Commission's "public interest" analysis are without basis in the statute. In other parts of this Order, the Commission broadly assesses the effects of the merger on the local and long-distance markets. Whatever the merits of these conclusions - on which I express no view - such considerations should play no role in the Commission's decision to grant a license transfer application. The statute charges the Commission with the narrow task of reviewing license transfer applications, and the chief focus of this inquiry should be on whether the transaction in question would result in a violation of statute or regulations. We routinely review the overwhelming majority of license transfer applications under this standard. There is quite simply no basis in the law for Commission's applying an entirely different framework - one that is so imprecise that it can be used to manufacture practically any result the Commission desires - to a small category of license transfer applications.