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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).



Today, the Commission adopted a Memorandum Opinion and Order (Order) granting the transfer of control of licenses and an international resale authorization held by Puerto Rico Telephone Company (PRTC) and Telefonica de Puerto Rico, Inc. (TPRI) from the Puerto Rico Telephone Authority (PRTA) to GTE Holdings (Puerto Rico) LLC (GTE Holdings). This transfer of control will occur as part of a transaction in which GTE Holdings will purchase from PRTA a major ownership interest in PRTC and will obtain de facto control over PRTC. After considering all of the issues raised by commenters in this proceeding, the Commission concluded that the proposed transfer of control is in the public interest.

The Order granted the applications filed by PRTA and GTE Holdings pursuant to sections 214 and 310(d) of the Communications Act of 1934, as amended, for approval to transfer control of certain wireless telecommunications licenses and an authorization to provide international resale service from PRTA's wholly-owned subsidiaries, PRTC and TPRI, to GTE Holdings, which is a wholly-owned subsidiary of GTE Corporation. In accordance with the terms of sections 214(a) and 310(d), the Commission cannot grant such applications unless the applicants demonstrate that the transfer of the subject licenses and authorization will serve the public interest, convenience, and necessity. In evaluating whether the proposed transaction would be in the public interest, the Commission weighed the potential public interest harms of the transaction against the potential public interest benefits, including an evaluation of the possible competitive effects of the transfer.

The Commission concluded that the transaction is unlikely to produce competitive harms in Puerto Rican telecommunications markets because existing Commission rules, in combination with the continued application of access and reporting conditions that had previously been imposed on PRTC, are adequate to prevent anticompetitive activity.

The Commission also found that the transfer will result in significant public interest benefits. In particular, telecommunications consumers will benefit from private ownership of the island's principal local exchange service provider by a well-financed and experienced company. GTE Holdings' commitments to invest substantial sums in infrastructure improvements and improve service quality are in the public interest. The Commission stated these improvements are specifically attributable to GTE Holdings' purchase of PRTC because the record does not demonstrate that such upgrades would have occurred absent the merger.

Finally, the Commission stated the public could benefit from GTE Holdings' commitments to maintain residential rates, to provide Internet access at discounted rates to educational institutions and to not involuntarily terminate employees.

Therefore, the Commission concluded that PRTA and GTE Holdings have met their burden, and accordingly the Commission granted their applications for transfer of control. In support of its conclusion, the Commission also noted that this transaction has been approved by the legislature and Governor of the Commonwealth of Puerto Rico, the duly elected representatives of the people of Puerto Rico.

Action by the Commission, February 12, 1999, by Memorandum Opinion and Order (FCC 99-22). Chairman Kennard, Commissioners Ness, Powell and Tristani with Commissioner Furchtgott-Roth concurring and issuing a separate statement.


News Media contact: Meribeth McCarrick at 202-418-0654
Wireless Telecommunications Bureau contact: Jeffrey Steinberg at 202-418-0896