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Re: Application of ALLTEL Corporation Petition for Waiver of Section 64.41 of the Commission's Rules and Applications for transfer of Control; CCB/CPD 99-1

I support today's decision approving the proposed transfer of control of certain licenses and authorizations from Aliant Communications Inc. to ALLTEL Corporation, and granting the waiver to allow ALLTEL to remain subject to rate-of-return regulation and to permit Aliant to convert back to rate-of-return after the license and authorization transfer. I concur in that result, but write separately to express my concern with the underlying reasoning. I continue to be uncomfortable with the Commission's proposed framework for analyzing mergers as I believe that it is (i) outside of our statutory mandate, (ii) applied in an ad hoc fashion and (iii) excessively time-consuming and speculative in its analysis of potential competition.

On several occasions, I have objected to this agency's ad hoc process for reviewing license transfers.(1) The Commission has pending before it numerous license transfers, of which only a select few are singled out by the Commission for stricter scrutiny. I have repeatedly objected to the fact that the Commission has not established a threshold test for determining which license transfer applications should receive strict scrutiny, and what kinds of process the Commission should utilize for such applications.

In addition, and contrary to its frequent assertions, the Commission does not possess statutory authority under the Communications Act to review, writ large, the mergers or acquisitions of communications companies. Nothing in the Communications Act grants the Commission authority to review mergers. Rather, that Act charges the Commission with a much narrower task: review of the proposed transfer of radio licenses from one party to another and review of the proposed transfer of interstate operational authorizations for common carriers. Nothing in the Communications Act speaks of jurisdiction to approve or disapprove the mergers that may occasion a transferor's desire to pass licenses on to a transferee.(2)

Under that Act, the Commission is, at most, required to determine whether the transfer of licenses serves the public interest, convenience and necessity. (3)

To be sure, the transfer of radio licenses and common carrier authorizations is an important part of any merger. But it is simply not the same thing. A merger is a much larger and more complicated set of events than the transfer of FCC permits. It includes, to name but a few things, the passage of legal title for many assets other than radio licenses, corporate restructuring, stock swaps or purchases, and the consolidation of corporate headquarters and personnel.

There is a world of difference between the business transaction known as a "merger" and a simple "license transfer." By using the license transfer provisions of the Communications Act to assert jurisdiction over the entire merger of two companies that happen to be the transferee and transferor of licenses, the Commission greatly expands its organic authority. I object to the Commission's sweeping "merger" review and its competitive framework which is frequently too focused on mere speculative harms.

1. See, e.g., Concurring Statement of Commissioner Harold W. Furchtgott-Roth, In the Matter of Applications for Consent to the Transfer of Control of Licenses and Section 214 Authorizations from Tele-Communications, Inc., Transferor, AT&T Corp., Transferee, CS Docket No. 98-178 (released Feb. 18, 1999); Testimony of Commissioner Harold W. Furchtgott-Roth before the U.S. House of Representatives, Committee on the Judiciary, Subcommittee on Commercial and Administrative Law, Oversight Hearing, May 25, 1999 (included as Attachment I).

2. 47 U.S.C. section 310(d) provides: "No . . . station license . . . shall be transferred . . . to any person except upon application to Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby," i.e., by the license transfer. Section 214(a) states: "No carrier shall undertake the construction of a new line or of an extension of any line, or shall acquire or operate any lines, or extension thereof, or shall engage in transmission over or by means of such additional or extended lines, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation, or construction and operation, of such additional or extended line." Notably, section 214(a) contains no "public interest" language at all.

3. The Commission does possess authority under the Clayton Act, which prohibits combinations in restraint of trade, to review mergers per se. See 15 U.S.C. section 21 (granting FCC authority to enforce Clayton Act where applicable to common carriers engaged in wire or radio communication or radio transmission of energy). That power is rarely invoked by the Commission, however. If the Commission intends to exercise authority over mergers and acquisitions as such, it ought to do so pursuant to the Clayton Act, with its carefully prescribed procedures and standards of review, not the licensing provisions of the Communications Act.

Attachment I

Testimony of Federal Communications Commissioner Harold W. Furchtgott-Roth Before the U.S. House of Representatives Committee on the Judiciary, Subcommittee on Commercial and Administrative Law Oversight Hearing, Tuesday, May 25, 1999