Verizon Wireless expressed concerns at FCC on draft merger review...

David Sappington and others at agency, are expected out as early as today (Mon.). Commission voted last fall to phase out cap, which had been 45 MHz, except for rural markets where it was 55 MHz, by Jan. 1, 2003. In interim, Commission lifted cap to 55 MHz for all markets. FCC economists have been looking at merger guidelines used by FTC and Justice Dept. to ascertain whether they could any of those provisions for FCC when processing license transfer applications (CD March 19 p6). Verizon Wireless Vp John Scott told press breakfast Fri. that his company was concerned that guidelines that emerged from FCC would be more restrictive than originally thought. “It’s not clear to me why there should be guidelines for this particular industry and not all industries that the Commission regulates,” Verizon Wireless Vp John Scott said. Carrier has met with Wireless Bureau and has urged it to not adopt guidelines for 2 reasons, he said: (1) “Guidelines tend to become requirements,” with concern that guidelines not be adopted that essentially would replace spectrum cap. Otherwise, premise of spectrum cap’s being eliminated to avoid proscriptive ownership requirements “would be undercut,” Scott said. (2) Industry is changing so rapidly that “adopting a set of guidelines based on the way the industry looks today may be the most inappropriate set of guidelines 2 years from now or 5 years from now,” he said. Justice Dept. told FCC in spectrum cap proceeding last fall that “a mandatory, inflexible set of rules” is not way to go, point that Verizon Wireless has reiterated to FCC, Scott said: “We have made that point to the Commission. We hope that the full Commission will agree with it.” Comments are expected to be sought on merger review guidelines that FCC releases, he said. Scott said carrier’s understanding of guidelines was that they would be more substantive than FCC’s simply indicating it would process transaction proposals within certain number of days. “To look at the concept of guidelines that come before the Commission under [Sec.] 310, if they are going to adopt any particular guidelines for when transactions above a particular size are involved and certain carriers or certain markets merit some higher level, that to me seems a concept that should be looked at by the full Commission,” he said. On issue of extent to which large wireless carriers still are beholden to FCC for original bids in re-auction of NextWave spectrum that has been overturned by D.C. Circuit, Scott said those financial obligations were having impact in other spectrum areas. He cited lower 700 MHz band auction June 19: “There were 48 MHz of spectrum at stake in that auction and if you look at who bid for that spectrum, the wireless industry didn’t show up. There’s one very apparent reason why they didn’t show up. From a government fiscal policy, as well, it should be concerning the government that they will not be raising the revenues they otherwise would raise.” Unless NextWave re-auction issue is resolved, upper band auction, which FCC recently delayed by 7 months, is likely to suffer from same lack of interest, Scott said.