Federal Communications Commission FCC 01-142 Before the Federal

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Federal Communications Commission FCC 01-142 Before the Federal Federal Communications Commission FCC 01-142 Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) VOICESTREAM WIRELESS ) CORPORATION, ) ) POWERTEL, INC., ) ) Transferors, ) ) and ) ) DEUTSCHE TELEKOM AG, ) IB Docket No. 00-187 ) Transferee, ) ) for Consent to Transfer ) Control of Licenses and Authorizations ) Pursuant to Sections 214 and 310(d) of the ) Communications Act and ) Petition for Declaratory Ruling ) Pursuant to Section 310 of the Communications Act ) and POWERTEL, INC., ) ) Transferor, ) ) and ) ) VOICESTREAM WIRELESS ) CORPORATION, ) ) IB Docket No. 00-187 Transferee, ) ) for Consent to Transfer ) Control of Licenses and Authorizations ) Pursuant to Sections 214 and 310(d) of the ) Communications Act ) and Federal Communications Commission FCC 01-142 ELISKA WIRELESS VENTURES LICENSE ) SUBSIDIARY I, L.L.C., WIRELESS ALLIANCE ) L.L.C., COOK INLET/VS GSM IV PCS, LLC and ) COOK INLET/VS GSM V PCS, LLC ) ) IB Docket No. 00-187 Petitions for Declaratory Ruling Pursuant to Section ) 310(b)(4) of the Communications Act ) ) and IOWA WIRELESS SERVICES HOLDING CORPORATION, ) et al. ) ) Petition for a Declaratory Ruling Pursuant to Section ) 310(b)(4) of the Act, and for a Ruling that the ) Transfer of a Minority Ownership Interest in the ) IB Docket No. 00-187 Licensee does not constitute a transfer of control ) under Section 310(d) ) ) MEMORANDUM OPINION AND ORDER Adopted: April 24, 2001 Released: April 27, 2001 By the Commission: Commissioner Furchtgott-Roth approving in part, dissenting in part, and issuing a statement. TABLE OF CONTENTS Paragraph I. INTRODUCTION AND BACKGROUND...................................................................................1 A. The Applicants ................................................................................................................4 1. VoiceStream Wireless Corporation......................................................................4 2. Deutsche Telekom AG ........................................................................................6 3. Powertel, Inc.......................................................................................................8 B. The Merger Transactions .................................................................................................9 C. Applications and Review Process...................................................................................12 1. Commission Review .........................................................................................12 2. Department of Justice Review............................................................................16 2 Federal Communications Commission FCC 01-142 D. Framework for Analysis ................................................................................................17 II. QUALIFICATIONS OF APPLICANTS.....................................................................................19 A. Qualifications of Transferors..........................................................................................19 1. Background ......................................................................................................21 2. The $5 Billion Investment .................................................................................23 3. Section 5.15 of the VoiceStream-DT Merger Agreement ....................................28 B. Qualifications of Transferee...........................................................................................30 III. STATUTORY INTERPRETATION OF SECTIONS 310(a) AND (b).........................................33 A. Background...................................................................................................................34 B. Analysis........................................................................................................................38 C. Section 310(b)(4) Framework ........................................................................................49 IV. ALLEGED HARMS ASSOCIATED WITH FOREIGN GOVERNMENT OWNERSHIP ...........51 A. Foreign Government Control of DT ...............................................................................56 B. Foreign Government Ownership and Possible Financial Advantages ...............................60 1. Preferential Access to Capital and Government Subsidies...................................60 2. Possible Favorable Regulatory Treatment ..........................................................66 C. Strategic Trade Policy Concerns.....................................................................................71 D. National Security, Law Enforcement, and Public Safety Interests ....................................73 V. ALLEGED HARMS TO COMPETITION IN SPECIFIC U.S. MARKETS .................................78 A. Domestic Mobile Telephony Markets.............................................................................79 1. Relevant Markets and Significant Participants....................................................81 2. Competitive Analysis ........................................................................................83 3. Rural Market Entry ...........................................................................................93 B. U.S. International Services Market .................................................................................96 1. Relevant Market and Significant Participants .....................................................97 2. Competitive Analysis ........................................................................................98 3. Dominant Carrier Safeguards...........................................................................100 C. Global Wireless Issues.................................................................................................103 1. Background ....................................................................................................105 2. Competitive Analysis ......................................................................................107 a. International roaming..........................................................................107 b. Third generation technology................................................................112 c. Expansion of global footprint..............................................................113 3 Federal Communications Commission FCC 01-142 D. Conclusion..................................................................................................................115 VI. ALLEGED PRO-COMPETITIVE BENEFITS .........................................................................116 VII. CONCLUSIONS .....................................................................................................................125 A. Section 310(b)(4).........................................................................................................125 B. Sections 214 and 310(d)...............................................................................................126 VIII. RELATED PETITIONS ..........................................................................................................127 A. CIVS IV and CIVS V ..................................................................................................129 B. Wireless Alliance, L.L.C..............................................................................................132 C. Iowa Wireless..............................................................................................................135 D. Eliska Wireless Ventures .............................................................................................139 IX. ORDERING CLAUSES ..........................................................................................................143 APPENDIX A: Commenters and Filings APPENDIX B: DT–VoiceStream/DOJ/FBI Agreement I. INTRODUCTION AND BACKGROUND 1. In this Order, we consider the joint applications filed by Deutsche Telekom AG (DT), VoiceStream Wireless Corporation (VoiceStream), and Powertel, Inc. (Powertel) (collectively, Applicants), pursuant to sections 214(a) and 310(d) of the Communications Act of 1934, as amended (Communications Act or Act),1 for authority to transfer control of licenses and authorizations held by VoiceStream and Powertel to DT in connection with their proposed merger.2 We conclude that approval of the applications to transfer control is in the public interest, subject to the conditions specified herein. We grant the petition filed by the U.S. Department of Justice and the Federal Bureau of Investigation to condition grant of the applications on the Applicants’ compliance with their joint agreement regarding foreign ownership and national security issues. We also grant, to the extent specified herein, the petitions for declaratory ruling pursuant to section 310(b)(4) of the Act filed by VoiceStream and Powertel and find that the public interest 1 47 U.S.C. §§ 214(a), 310(d). 2 VoiceStream Wireless Corp. and Deutsche Telekom AG, Application for Transfer of Control and Petition for Declaratory Ruling, IB Docket No. 00-187 (filed Sept. 18, 2000) (VoiceStream DT Application); Powertel, Inc. and Deutsche Telekom AG, Application for Transfer of Control and Petition for Declaratory Ruling, IB Docket No. 00- 187 (filed Sept. 18, 2000) (Powertel DT Application). 4 Federal Communications Commission FCC 01-142 would not be served by denying the proposed indirect foreign ownership of VoiceStream and Powertel by DT in excess of 25 percent.
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