[Federal Register Volume 69, Number 219 (Monday, November 15, 2004)]
[Notices]
[Pages 65633-65654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25323]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Cingular Wireless Corporation, SBC 
Communications Inc., BellSouth Corporation, and AT&T Wireless Services, 
Inc.; Competitive Impact Statement, Proposed Final Judgment, Complaint, 
Preservation of Assets Stipulation and Order

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, proposed Final 
Judgment, Preservation of Assets Stipulation and Order, and Competitive 
Impact Statement have been filed with the U.S. District Court for the 
District of Columbia in United States v. Cingular Wireless Corps., 
Civil Case No. 1:04CV01850 (RBW). On October 25, 2004, the United 
States, along with the Attorneys General from the states of Connecticut 
and Texas, filed a complaint alleging that the proposed acquisition of 
AT&T Wireless Services, Inc. (``AT&T Wireless'') by Cingular Wireless 
Corp. (``Cingular''), which is jointly owned by BellSouth Corporation 
(``BellSouth'') and SBC Communications, Inc. (``SBC''), would violate 
Section 7 of the Clayton Act, 15 U.S.C. 18, by substantially lessening 
competition in the provision of mobile wireless telecommunications 
services and mobile wireless broadband services. The proposed Final 
Judgment, filed at the same time as the Complaint and Preservation of 
Assets Stipulation and Order, requires Cingular to divest assets in 
eleven states--Connecticut, Georgia, Kansas, Kentucky, Louisiana, 
Massachusetts, Missouri, Michigan, Oklahoma, Tennessee, and Texas--in 
order to proceed with Cingular Wireless's $41 billion cash acquisition 
of AT&T Wireless. A Competitive Impact Statement filed by the United 
States on October 29, 2004 describes the Complaint, the proposed Final 
Judgment, the industry, and the remedies available to private litigants 
who may have been injured by the alleged violation.
    Copies of the Complaint, proposed Final Judgment, Preservation of 
Assets Stipulation and Order, the Competitive Impact Statement, and all 
further papers filed with the Court in connection with the Complaint 
will be available for inspection at the Antitrust Documents Group, 
Antitrust Division, Liberty Place Building, Room 215, 325 7th Street, 
NW., Washington, DC 20530 (202-514-2481), and at the Office of the 
Clerk of the U.S. District Court for the District of Columbia. Copies 
of these materials may be obtained from the Antitrust Division upon 
request and payment of the copying fee set by Department of Justice 
regulations.
    Interested persons may submit comments in writing regarding the 
proposed consent decree to the United States. Such comments must be 
received by the Antitrust Division within sixty (60) days and will be 
filed with the Court by the United States. Comments should be addressed 
to Nancy Goodman, Chief, Telecommunications & Media Enforcement 
Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, 
NW., Suite 8000, Washington, DC 20530 (202-514-5621). At the conclusion 
of the sixty (60) day comment period. The U.S. District Court for the 
District of Columbia may enter the proposed consent decree upon finding 
that it serves the public interest.

J. Robert Kramer II,
Director of Operations, Antitrust Division.

In the United States District Court for the District of Columbia

United State of America, State of Connecticut and State of Texas, 
Plaintiffs, v. Cingular Wireless Corporation, SBC Communications Inc., 
Bellsouth Corporation and AT&T Wireless Services, Inc., Defendants; 
Competitive Impact Statement

Civil No. 1:04CV01850 (RBW).
Filed: October 29, 2004.

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. Sec.  16(b)-(h), files this Competitive 
Impact Statement relating to the proposed Final Judgment submitted for 
entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendants Cingular Wireless Corporation (``Cingular''), SBC 
Communications Inc. (``SBC''), BellSouth Corporation (``BellSouth''), 
and AT&T Wireless Services, Inc. (``AT&T Wireless Services'') entered 
into an Agreement and Plan of Merger dated February 17, 2004, pursuant 
to which Cingular will acquire AT&T Wireless. Plaintiff United States 
and the states of Connecticut and Texas (``plaintiff states'') filed a 
civil antitrust Complaint on October 25, 2004, seeking to enjoin the 
proposed acquisition. The

[[Page 65634]]

Compliant alleges that the likely effect of this acquisition would be 
to lessen competition substantially for mobile wireless 
telecommunications services and mobile wireless broadband services 
(collectively, ``Mobile wireless services'') in violation of Section 7 
of the Clayton Act, 15 U.S.C. 18. This loss of competition would result 
in consumers facing higher prices, lower quality or quantity of mobile 
wireless services, or delayed launch of new mobile wireless services.
    At the same time the Complaint was filed, plaintiff United States 
also filed a Preservation of Assets Stipulation and Order and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which is 
explained more fully below, defendants are required to divest (1) AT&T 
Wireless's mobile wireless services business and related assets in five 
markets (``Wireless Business Divesture Assets''); (2) Cingular's or 
AT&T Wireless's minority interests in other mobile wireless services 
providers in five markets (``Minority Interests''); and (3) 10 MHz of 
contiguous PCS wireless spectrum in three markets (``Spectrum Divesture 
Assets''). Under the terms of the Preservation of Assets Stipulation 
and Order, defendants will take certain steps to ensure (a) that these 
assets are preserved and that the Wireless Business Divestiture Assets 
are operated as competitively independent, economically viable and 
ongoing businesses; (b) that they will remain independent and 
uninfluenced by defendants or the consummation of the transaction; and 
(c) that competition is maintained during the pendency of the ordered 
divestiture.
    Plaintiffs and defendants have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. Entry of the 
proposed Final Judgment would terminate this action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof. Plaintiffs and defendants have also stipulation that 
defendants will comply with the terms of the Preservation of Assets 
Stipulation and Order and the proposed Final Judgment from the date of 
signing of the Preservation of Assets Stipulation and Order, pending 
entry of the proposed Final Judgment by the Court and the required 
divestitures. Should the Court decline to enter the proposed Final 
Judgment, defendants have also committed to continue to abide by its 
requirements and those of the Preservation of Assets Stipulation and 
Order until the expiration of time for appeal.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Cingular, with headquarters in Atlanta, Georgia, is a company 
organized and existing under the laws of the State of Delaware. 
Cingular was formed in 2000 by SBC and BellSouth, who own equity 
interests in it of 60 and 40 percent, respectively. SBC and BellSouth 
evenly share management control of Cingular. Cingular is the second-
largest provider of mobile wireless voice and data services in the 
United States by number of subscribers; it serves more than 24 million 
customers. Cingular provides mobile wireless services in areas 
throughout the United States and is one of only six providers with a 
national presence. In 2003, Cingular earned revenues of approximately 
$15.5 billion.
    SBC, with headquarters in San Antonio, Texas, is a corporation 
organized and existing under the laws of the state of Delaware. SBC is 
one of several regional Bell operating companies (``RBOCs'') formed in 
1984 as a result of the breakup of AT&T Corporation's local telephone 
business. SBC's wireline telecommunications businesses serve 54.7 
million access lines in 13 states: Arkansas, California, Connecticut, 
Illinois, Indiana, Kansas, Michigan, Missouri, Nevada, Ohio, Oklahoma, 
Texas, and Wisconsin. In 2003, SBC earned approximately $40.8 billion 
in revenues.
    BellSouth, an RBOC with headquarters in Atlanta, Georgia, is a 
corporation organized and existing under the laws of the state of 
Georgia. BellSouth's wireline telecommunications businesses serve 23.7 
million access lines in nine states: Alabama, Florida, Georgia, 
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and 
Tennessee. Its total operating revenues for 2003 were approximately 
$22.6 billion.
    AT&T Wireless, with headquarters in Redmond, Washington, is a 
corporation organized and existing under the laws of the state of 
Delaware. Spun off from AT&T Corporation in 2001, it had more than 22 
million subscribers as of August 2004 and earned revenues of 
approximately $16.6 billion in 2003. AT&T Wireless is the third-largest 
U.S. mobile wireless services provider by number of subscribers, and, 
like Cingular, it provides mobile wireless services in areas throughout 
the United States and has a national presence.
    Pursuant to an Agreement and Plan of Merger dated February 17, 
2004, Cingular will pay AT&T Wireless shareholders $15 in cash per 
common share and thereby plans to acquire AT&T Wireless for 
approximately $41 billion. If this transaction is consummated, Cingular 
and AT&T Wireless combined would have more than 46 million subscribers, 
with over $32 billion in revenues, making it the largest mobile 
wireless services provider in the United States, with operations in 49 
states covering 97 of the top 100 marketing areas.
    The proposed transaction, as initially agreed to by defendants, 
would lessen competition substantially for mobile wireless 
telecommunications service in 10 markets and for mobile wireless 
broadband services in three markets. This acquisition is the subject of 
the Complaint and proposed Final Judgment filed by plaintiffs.

B. Mobile Wireless Services Industry

    Mobile wireless services allow customers to make and receive 
telephone calls and use data services using radio transmissions without 
being confined to a small area during the call or data session, and 
without the need for unobstructed line-of-sight to the radio tower. 
This mobility is highly prized by customers, as demonstrated by the 
more than 160 million people in the United States who own mobile 
wireless telephones. In 2003, revenues for the sale of mobile wireless 
services in the United States were nearly $90 billion. To provide these 
services, mobile wireless services providers must acquire adequate and 
appropriate spectrum, deploy an extensive network of switches, radio 
transmitters, and receivers, and interconnect this network with those 
of local and long-distance wireline telecommunications providers and 
other mobile wireless services providers.
    The first wireless voice systems were based on analog technology, 
now referred to as first-generation or ``1G'' technology. These analog 
systems were launched after the FCC issued the first licenses for 
mobile wireless telephone service: two cellular licenses (A-block and 
B-block) in each geographic area in the early to mid-1980s. The 
licenses are in the 800 MHz range of the radio spectrum, each license 
consists of 25 MHz of spectrum, and they are issued for each 
Metropolitan Statistical Area (``MSA'') and Rural Service Area 
(``RSA'') (collectively, ``Cellular Marketing Areas'' or ``CMAs''), 
with a total of 734 CMAs covering the entire

[[Page 65635]]

United States. In 1982, one of the licenses was issued to the incumbent 
local exchange carrier in the market, and the other was issued by 
lottery to someone other than the incumbent. Cellular licensees must 
support analog service until February 2008.
    In 1995, the FCC allocated and subsequently issued licenses for 
additional spectrum for the provision of Personal Communications 
Services (``PCS''), a category of services that includes mobile 
wireless telephone services comparable to those offered by cellular 
licensees. These licenses are in the 1.8 GHz range of the radio 
spectrum and are divided into six blocks. A, B, and C, which consist of 
30 MHz each; and D, E, and F, which consist of 10 MHz each. 
Geographically, the A and B-block 30 MHz licenses are issued by Major 
Trading Areas (``MTAs''), and C, D, E, and F-block licenses are issued 
by Basic Trading Areas (``BTAs''), several of which comprise each MTA. 
MTAs and BTAs do not generally correspond to MSAs and RSAs. With the 
introduction of the PCS license, both cellular and PCS licensees began 
offering digital services, thereby increasing capacity, shrinking 
handsets, and extending battery life. Unlike the cellular licensees, 
PCS licensees are not required to provide support for analog or any 
other technology standard. In 1996, one provider, a specialized mobile 
radio (``SMR'' or ``dispatch'') spectrum licensee, began to use its SMR 
spectrum of offer mobile wireless telephone services comparable to 
those offered by other mobile wireless services providers, in 
conjunction with its dispatch, or ``push-to-talk,'' service.
    Today, more than 90 percent of all mobile wireless services 
customers have digital service, and nearly all mobile wireless voice 
service has migrated to second-generation or ``2G'' digital 
technologies: TDMA (time division multiple access), GSM (Global 
Standard for Mobile, a type of TDMA standard used by all carriers in 
Europe), and CDMA (code division multiple access). Mobile wireless 
services providers have chosen to build their networks on these 
incompatible technologies and most have chosen CDMA or GSM, with TDMA 
having been orphaned by equipment vendors. (The SMR providers use a 
fourth incompatible technological standard better suited to the 
spectrum they own, and, as SMR licensees, they have no obligation to 
support a specific technology standard.) Even more advanced 
technologies (``2.5G'') have begun to be deployed for voice and data 
(e.g., IxRIT (a/k/a CDMA 2000), GPRS (General Packet Radio Service), 
and EDGE (Enhanced Data for GSM Evolution)). The data transmission 
speeds of these technologies vary. For example, 1xRTT provides average 
user speeds of 70 kilobits per second (``kbps''), and GPRS and EDGE 
provide average user speeds of 20 to 40 kbps and 80 to 110 kbps, 
respectively.
    Currently, the U.S. mobile wireless services industry is taking the 
next evolutionary step in wireless technology to third-generation or 
``3G'' technologies (e.g., for GSM, UMTS (Universal Mobile 
Telecommunications System) and for CDMA, Ev-DO/DV (Evolution Data Only/
Date Voice)) that provide for more capacity and higher data throughout. 
All of the national mobile wireless services providers and some of the 
regional providers are considering how and where they will deploy 3G 
services across their networks. Some providers have already deployed 
this service in some areas of the country.

C. The Competitive Effects of the Transaction on Mobile Wireless 
Telecommunications Services and Mobile Wireless Broadband Services

    Cingular's proposed acquisition of AT&T Wireless will substantially 
lessen competition in mobile wireless telecommunications services and 
mobile wireless broadband services in the relevant geographic areas. 
Mobile wireless telecommunications services include both voice and data 
services provided over a radio network and allow customers to maintain 
their telephone calls or data sessions without wires, such as when 
traveling. Mobile wireless broadband services offer data speeds four to 
six times faster than the 2G and 2.5G data offerings currently provided 
by the mobile wireless services providers. Mobile wireless broadband 
services, which are now being launched using various 3G technologies, 
offer average data speeds of 200 to 300 kbps, peaking at 2 megabits per 
second or higher. These speeds rival wireline broadband services at 
peak speeds. At average speeds, they are comparable to low-end wireline 
high-speed data offerings and can support bandwidth-intensive services 
including video conferencing, video streaming, downloading of music and 
video files, and voice over Internet protocol (``VoIP'') calling, none 
of which can be used reliably at slower speeds. Fixed wireless services 
and other wireless services that have a limited range (e.g., Wi-Fi) do 
not offer a viable alternative to either mobile wireless 
telecommunications services or mobile wireless broadband services 
primarily because customers using these services cannot maintain a call 
or data session while moving from one location to another.
    Most customers use mobile wireless services in close proximity to 
their workplaces and homes. Thus, customers purchasing mobile wireless 
telecommunications services and mobile wireless broadband services 
choose among mobile wireless services providers that offer services 
where they are located and travel on a regular basis: home, work, other 
areas they commonly visit, and areas in between. The number and 
identity of mobile wireless services providers varies from geographic 
area to geographic area, along with the quality of their services and 
the breadth of their geographic coverage, all of which are significant 
factors in customers' purchasing decisions. Mobile wireless services 
providers can and do offer different promotions, discounts, calling 
plans, and equipment subsidies in different geographic areas, 
effectively varying the actual price for customers by geographic area.
    The relevant geographic markets for mobile wireless services are, 
therefore, local in nature and are generally centered around a 
metropolitan area or a population center and its environs. The FCC has 
licensed a limited number of mobile wireless services providers in 
these and other geographical areas based upon the availability of radio 
spectrum. These FCC spectrum licensing areas often represent the core 
of the business and social sphere where customers face the same 
competitive choices for mobile wireless services. Although not all FCC 
spectrum licensing areas are relevant geographic areas for the purpose 
of analyzing the antitrust impact of this transaction, the FCC spectrum 
licensing areas that encompass the 13 geographic areas of concern in 
this transaction are where consumers in these communities principally 
use their mobile wireless services. As described in the Complaint, the 
relevant geographic markets where the transactions will substantially 
lessen competition for mobile wireless telecommunications services are 
represented by the following FCC spectrum licensing areas: Oklahoma 
City, Oklahoma (CMA 045), Topeka, Kansas (CMA 179), Pittsfield, 
Massachusetts (CMA 213), Athens, Georgia (CMA 234), St. Joseph, 
Missouri (CMA 275), Connecticut RSA-1 (CMA 357), Kentucky RSA-1 (CMA 
443), Oklahoma RSA-3 (CMA 598), Texas RSA-11 (CMA 662), and Shreveport, 
Louisiana (BTA 419). The relevant geographic markets where the 
transaction will substantially lessen competition for mobile wireless 
broadband services are represented by the following FCC spectrum 
licensing

[[Page 65636]]

areas: Dallas-Fort Worth, Texas (CMA 009), Detroit, Michigan (BTA 112), 
and Knoxville, Tennessee (BTA 232).
    The 10 geographic markets of concern for mobile wireless 
telecommunications services were identified by a fact-specific, market-
by-market analysis that included consideration of, but was not limited 
to, the following factors: the number of mobile wireless services 
providers and their competitive strengths and weaknesses, Cingular's 
and AT&T Wireless's market shares along with those of the other 
providers, whether additional spectrum is or is likely soon to be 
available, whether any providers are limited by insufficient spectrum 
or other factors in their ability to add new customers or launch 
additional services, the population of a market as it affects the need 
for spectrum to serve the population, the concentration of the market, 
and the breadth and depth of coverage by different providers in each 
market.
    Cingular and AT&T Wireless both own all or part of businesses that 
offer mobile wireless telecommunications services in the 10 relevant 
geographic areas. In five of these areas (Athens, Georgia; Topeka, 
Kansas; Pittsfield, Massachusetts; St. Joseph, Missouri; and 
Shreveport, Louisiana), Cingular or AT&T Wireless also owns minority 
equity interests in another mobile wireless telecommunications services 
provider that would be a significant competitor to the merged firm for 
these services. The minority equity interests range from approximately 
9 to 24 percent. Based upon these significant minority equity interests 
and the specific facts of the relationships, it was appropriate to 
attribute the shares and assets of the mobile wireless services 
businesses partially owned by Cingular or AT&T Wireless in these 
markets to either Cingular or AT&T Wireless, thus increasing the 
percentage of customers served by the merged firm.
    The individual market shares of Cingular's and AT&T Wireless's 
mobile wireless telecommunications services businesses in the 10 
relevant geographic markets as measures in terms of subscribers range 
from 9 to more than 71 percent, and their combined market shares range 
from 61 to nearly 90 percent. In each relevant geographic market, 
Cingular or AT&T Wireless has the largest market share, and, in all but 
one, the other is the second-largest mobile wireless telecommunications 
services provider. In all but one of the relevant geographic markets, 
Cingular and AT&T Wireless are the original cellular licensees and, as 
a result, have the network infrastructures with the greatest depth and 
breadth of coverage. Cingular and AT&T Wireless are likely closer 
substitutes for each other than the other mobile wireless 
telecommunications services providers in the relevant geographic 
markets. Additionally in these markets, there will be insufficient 
remaining competitors post-merger with the ability to compete 
effectively to defeat a small, but significant price increase by the 
merged firm.
    The relevant geographic markets for mobile wireless 
telecommunications services are highly concentrated. As measured by the 
Herfindahl-Hirschman index (``HHI''), which is commonly employed in 
merger analysis and is defined and explained in Appendix A to the 
Compliant, concentration in these markets ranges from approximately 
2600 to more than 5300, which is well above the 1800 threshold at which 
the Department considers a market to be highly concentrated. After 
Cingular's proposed acquisition of AT&T Wireless is consummated, the 
HHIs in the relevant geographic markets will range from approximately 
4400 to more than 8000, with increases in the HHI as a result of the 
merger ranging from approximately 1100 to more than 3500.
    Competition between Cingular and AT&T Wireless in the relevant 
geographic markets has resulted in lower prices and higher quality in 
mobile wireless telecommunications services than would otherwise have 
existed in these geographic markets. If Cingular's proposed acquisition 
of AT&T Wireless is consummated, the relevant geographic markets for 
mobile wireless telecommunications services will become substantially 
more concentrated, and the competition between Cingular and AT&T 
Wireless in mobile wireless telecommunications services will be 
eliminated in these markets. As a result, the loss of competition 
between Cingular and AT&T Wireless increases the likelihood of 
unilateral actions by the merged firm in the relevant geographic 
markets to increase prices, diminish the quality or quantity of 
services provided, refrain from or delay making investments in network 
improvements, and refrain from or delay launching new services.
    In the relevant geographic markets for mobile wireless broadband 
services, Cingular and AT&T Wireless have either launched or are likely 
soon to launch mobile wireless broadband services. Each has the 
spectrum necessary to offer mobile wireless broadband services and has 
business plans to offer these services in these markets. Not all mobile 
wireless services providers have sufficient spectrum to launch mobile 
wireless broadband services in these markets, nor do they all have 
business plans to do so in the near future. In the relevant geographic 
markets, the current number of mobile wireless services providers that 
are likely to launch mobile wireless broadband services in the 
foreseeable future is limited. Because mobile wireless broadband 
services are nascent, however, HHIs are uninformative.
    The competition between Cingular and AT&T Wireless has motivated 
their efforts to develop and launch mobile wireless broadband services 
in the relevant geographic markets. If Cingular's proposed acquisition 
of AT&T Wireless is consummated, the relevant geographic markets will 
lose one of only a few existing and likely mobile wireless broadband 
services providers. As a result, the loss of competition between 
Cingular and AT&T Wireless increases the likelihood of unilateral 
actions by the merged firm in these relevant geographic markets to 
increase prices, diminish the quality or quantity of services provided, 
and refrain from or delay the launch of mobile wireless broadband 
services.
    Entry by a new mobile wireless services provider in the relevant 
geographic markets would be difficult, time-consuming, and expensive, 
requiring the acquisition of spectrum licenses and the build-out of a 
network. Therefore, new entry in response to a small but significant 
price increase for mobile wireless telecommunications services or 
mobile wireless broadband services by the merged firm in the relevant 
geographic markets would not be timely, likely, or sufficient to thwart 
the competitive harm that would result from Cingular's proposed 
acquisition of AT&T Wireless.
    For these reasons, plaintiffs concluded that Cingular's proposed 
acquisition of AT&T Wireless will likely substantially lessen 
competition, in violation of Section 7 of the Clayton Act, in the 
provision of mobile wireless telecommunications services and mobile 
wireless broadband services in the relevant geographic markets.

III. Explanation of the Proposed Final Judgment

    The divestiture requirements of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in mobile 
wireless telecommunications services and mobile wireless broadband 
services in the 13 geographic markets of concern. The proposed Final 
Judgment requires defendants, within 120 days after the filing of the 
Complaint, or five days after notice of the entry of the Final Judgment 
by the Court, whichever is later, to

[[Page 65637]]

divest the Wireless Business Divestiture Assets, the Minority 
Interests, and Spectrum Divestiture Assets (collectively, ``Divestiture 
Assets''). The Wireless Business Divestiture Assets are essentially 
AT&T Wireless's entire mobile wireless business in the five markets 
where Cingular and AT&T Wireless both currently own and control 
providers of mobile wireless telecommunications services. These assets 
must be divested in such a way as to satisfy plaintiff United States in 
its sole discretion upon consultation with any relevant plaintiff state 
that they will be operated by the purchaser as a viable, ongoing 
business that can compete effectively in the relevant market. 
Defendants must take all reasonable steps necessary to accomplish the 
divestitures quickly and shall cooperate with prospective purchasers.
    With respect to the Wireless Business Divestiture Assets, in some 
markets the merged firm may retain some of AT&T Wireless's wireless 
spectrum (Connecticut RSA-1, Kentucky RSA-1, and Texas RSA-11). The 
spectrum that must be divested is adequate to support the operation and 
expansion of the mobile wireless services business being divested, and 
allowing the merged firm to retain some of AT&T Wireless's spectrum may 
benefit consumers by allowing the merged firm to provide improved or 
new services.
    In the five markets where either Cingular or AT&T Wireless owns a 
minority interest in another mobile wireless services provider, the 
proposed Final Judgment requires defendants to divest these Minority 
Interests. The proposed Final Judgment allows defendants to retain the 
Minority Interests in the Missouri, Kansas, and Louisiana areas with 
the approval of plaintiff United States in its sole discretion if they 
demonstrate that the retained minority interest will become irrevocably 
and entirely passive so long as the merged firm owns the interest and 
will not significantly diminish competition. The size of the minority 
interests and market concentrations in the Georgia and Massachusetts 
markets created concerns that allowing the merged firm to continue to 
hold even a passive interest would diminish competition, and defendants 
are required to divest fully their interests in those markets.
    The Spectrum Divestiture Assets consist of 10 MHz of contiguous PCS 
spectrum in three markets and must be divested in such a way as to 
remedy the competitive harm from the transaction in the relevant mobile 
wireless broadband services markets. The availability of this spectrum 
will make it more likely that another mobile wireless services provider 
could offer high-speed data services in these areas. In Knoxville, 
Tennessee, the merged firm can alternatively restructure its 
relationship with another spectrum licensee in the market so that the 
merged firm no longer has an effective controlling interest in the 
licensee and that the licensee's spectrum will be used by it in a 
manner that resolves the competitive concerns identified in the 
Complaint, which is effectively the same as if the merged firm were to 
divest the required amount of spectrum.

A. Timing of Divestitures

    In antitrust cases involving mergers or joint ventures in which 
plaintiff United States seeks a divestiture remedy, it requires 
completion of the divestitures within the shortest time period 
reasonable under the circumstances. The proposed Final Judgment in this 
case requires, in Section IV.A, divestiture of the Divestiture Assets, 
within 120 days after the filing of the Complaint, or five days after 
notice of the entry of the Final Judgment by the Court, whichever is 
later. Plaintiff United States in its sole discretion upon consultation 
with any relevant plaintiff state may extend the date for divestiture 
of the Divestiture Assets by up to 60 days. Because the FCC's approval 
is required for the transfer of the wireless licenses to a purchaser, 
Section IV.A provides that if applications for transfer of a wireless 
license have been filed with the FCC, but the FCC has not acted 
dispositively before the end of the required divestiture period, the 
period for divestiture of those assets shall be extended until five 
days after the FCC has acted. This extension is to be applied only to 
the individual Divestiture Assets affected by the delay in approval of 
the license transfer and does not entitle defendants to delay the 
divestiture of any other Divestiture Assets for which license transfer 
approval has been granted.
    The divestiture timing provisions of the proposed Final Judgment 
will ensure that the divestitures are carried out in a timely manner, 
and at the same time will permit defendants an adequate opportunity to 
accomplish the divestitures through a fair and orderly process. Even if 
all Divestiture Assets have not been divested upon consummation of the 
transaction, there should be no adverse impact on competition given the 
limited duration of the period of common ownership and the detailed 
requirements of the Preservation of Assets Stipulation and Order.

B. Use of a Management Trustee

    The Preservation of Assets Stipulation and Order, entered by the 
Court on October 26, 2004, ensures, prior to divestiture, that the 
Divestiture Assets are maintained and the Wireless Business Divestiture 
Assets remain an ongoing business concern and that the other 
Divestiture Assets remain economically viable. The Divestiture Assets 
will remain preserved, independent and uninfluenced by defendants, so 
that competition is maintained during the pendency of the ordered 
divestiture.
    The Preservation of Assets Stipulation and Order appoints a 
management trustee selected by plaintiff United States upon 
consultation with plaintiff states to oversee the Divestiture Assets in 
the relevant geographic markets. The appointment of a management 
trustee in this unique situation is required because the Divestiture 
Assets are not independent facilities that can be held separate and 
operated as standalone units by the merged firm. Rather, the Wireless 
Business Divestiture Assets are an integral part of a nationwide 
network, and to maintain their competitive viability and economic 
value, they should remain part of that network during the divestiture 
period. To ensure that these assets are preserved and supported by 
defendants during this period, yet run independently, a management 
trustee is necessary to oversee the continuing relationship between 
defendants and these assets. The management trustee will have the power 
to operate the Wireless Business Divestiture Assets in the ordinary 
course of business, so that they will remain preserved, independent, 
and uninfluenced by defendants, and an ongoing and economically viable 
competitor to defendants and to other mobile wireless services 
providers. The management trustee will preserve the confidentiality of 
competitively sensitive marketing, pricing, and sales information; 
insure defendants' compliance with the Preservation of Assets 
Stipulation and Order and the proposed Final Judgment; and maximize the 
value of the Divestiture Assets so as to permit expeditious divestiture 
in a manner consistent with the proposed Final Judgment.
    The Preservation of Assets Stipulation and Order provides that 
defendants will pay all costs and expenses of the management trustee, 
including the cost of consultants, accountants, attorneys, and other 
representatives and assistants hired by the management trustee as are 
reasonably necessary to carry out his or her duties and 
responsibilities. After his

[[Page 65638]]

or her appointment becomes effective, the management trustee will file 
monthly reports with plaintiffs setting forth the efforts to accomplish 
the goals of the Preservation of Assets Stipulation and Order and the 
proposed Final Judgment and the extent to which defendants are 
fulfilling their responsibilities. Finally, the management trustee may 
become the divestiture trustee, pursuant to the provisions of Section V 
of the proposed Final Judgment.

C. Use of a Divestiture Trustee

    In the event that defendants do not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, the Final 
Judgment provides that the Court will appoint a trustee selected by 
plaintiff United States upon consultation with any relevant plaintiff 
state to effect the divestitures. As part of this divestiture, 
defendants must relinquish any direct or indirect financial ownership 
interests and any direct or indirect role in management or 
participation in control. Pursuant to Section V of the proposed Final 
Judgment, the divestiture trustee will own and control the systems 
until they are sold to a final purchaser, subject to safeguards to 
prevent defendants from influencing their operation.
    Section V details the requirements for the establishment of the 
divestiture trust, the selection and compensation of the divestiture 
trustee, the responsibilities of the divestiture trustee in connection 
with the divestiture and operation of the Divestiture Assets, and the 
termination of the divestiture trust. The divestiture trustee will have 
the obligation and the sole responsibility, under Section V.D, for the 
divestiture of any transferred Divestiture Assets. The divestiture 
trustee has the authority to accomplish divestitures at the earliest 
possible time and ``at the best price then obtainable upon a reasonable 
effort by the trustee.'' In addition, to insure that the divestiture 
trustee can promptly locate and divest to an acceptable purchaser, 
plaintiff United States, in its sole discretion upon consultation with 
any relevant plaintiff state, may require defendants to include 
additional assets, or allow defendants to substitute substantially 
similar assets, which substantially relate to the Wireless Business 
Divestiture Assets to be divested by the divestiture trustee.
    The divestiture trustee will not only have responsibility for sale 
of the Divestiture Assets, but will also be the authorized holder of 
the wireless licenses, with full responsibility for the operations, 
marketing, and sales of the wireless businesses to be divested, and 
will not be subject to any control or direction by defendants. 
Defendants will no longer have any role in the ownership, operation, or 
management of the Divestiture Assets following consummation of the 
transaction, as provided by Section V, other than the right to receive 
the proceeds of the sale, and certain obligations to provide support to 
the Divestiture Assets, and cooperate with the divestiture trustee in 
order to complete the divestiture, as indicated in Section VI.L and in 
the Preservation of Assets Stipulation and Order.
    The proposed Final Judgment provides that defendants will pay all 
costs and expenses of the divestiture trustee. The divestiture 
trustee's commission will be structured, under Section V.G of the 
proposed Final Judgment, so as to provide an incentive for the 
divestiture trustee based on the price obtained and the speed with 
which the divestitures are accomplished. After his or her appointment 
becomes effective, the divestiture trustee will file monthly reports 
with the Court and plaintiffs setting forth his or her efforts to 
accomplish the divestitures. Section V.J requires the divestiture 
trustee to divest the Divestiture Assets to an acceptable purchaser or 
purchasers no later than six months after the assets are transferred to 
the divestiture trustee. At the end of six months, if all divestitures 
have not been accomplished, the trustee, plaintiff United States, and 
any relevant plaintiff state will make recommendations to the Court, 
which shall enter such orders as appropriate in order to carry out the 
purpose of the trust, including extending the trust or term of the 
trustee's appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the transaction in the 
provision of mobile wireless telecommunications services and mobile 
wireless broadband services. The divestitures of the Wireless Business 
Divestiture Assets and the Minority Interests will preserve competition 
in mobile wireless telecommunications services by maintaining an 
independent and economically viable competitor in the relevant 
geographic markets. The divestiture of the Spectrum Divestiture Assets 
will preserve competition in mobile wireless broadband services by 
making assets available to establish a new, independent, and 
economically viable competitor.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    Plaintiffs and defendants have stipulated that the proposed Final 
Judgment may be entered by a Court after compliance with the provisions 
of the APPA, provided that plaintiffs have not withdrawn their consent. 
The APPA conditions entry upon the Court's determination that the 
proposed Final Judgment is in the public interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to plaintiff United States written comments regarding 
the proposed Final Judgment. Any person who wishes to comment should do 
so within sixty (60) days of the date of publication of this 
Competitive Impact Statement in the Federal Register. All comments 
received during this period will be considered by the Department of 
Justice, which remains free to withdraw its consent to the proposed 
Final Judgment at any time prior to the Court's entry of judgment. The 
comments and the response of plaintiff United States will be filed with 
the Court and published in the Federal Register.
    Written comments should be submitted to: Nancy M. Goodman, Chief, 
Telecommunications and Media Enforcement Section, Antitrust Division, 
U.S. Department of Justice, 1401 H Street, NW., Suite 8000, Washington, 
DC 20530. The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    Plaintiff United States considered, as an alternative to the 
proposed Final

[[Page 65639]]

Judgment, a full trail on the merits against defendants. Plaintiff 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Cingular's acquisition of 
AT&T Wireless. Plaintiff United States is satisfied, however, that the 
divestiture of assets and other relief described in the proposed Final 
Judgment will preserve competition for the provision of mobile wireless 
telecommunications services and mobile wireless broadband services in 
the relevant markets identified in the Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' 15 U.S.C. 
16(e)(1). In making that determination, the Court shall consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). As the United States Court of Appeals for 
the District of Columbia Circuit has held, the APPA permits a court to 
consider, among other things, the relationship between the remedy 
secured and the specific allegations set forth in the government's 
compliant, whether the consent judgment is sufficiently clear, whether 
enforcement mechanisms are sufficient, and whether the consent judgment 
may positively harm third parties. See United States v. Microsoft 
Corp., 56 F.3d 1448, 1458-62 (D.C. Cir. 1995).
    ``Nothing in this section shall be construed to require the court 
to conduct an evidentiary hearing or to require the court to permit 
anyone to intervene.'' 15 U.S.C. 16(e)(2). Thus, in conducting this 
inquiry, ``[t]he court is nowhere compelled to go to trial or to engage 
in extended proceedings which might have the effect of vitiating the 
benefits of prompt and less costly settlement through the consent 
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Senator 
Tunney).\1\ Rather:

    \1\ See United States v. Gillette Co., 406 F. Supp. 713, 716 (D. 
Mass. 1975) (recognizing it was not the court's duty to settle; 
rather, the court must only answer ``whether the settlement achieved 
[was] within the reaches of the public interest''). A ``public 
interest'' determination can be made properly on the basis of the 
Competitive Impact Statement and Response to Comments field by the 
Department of Justice pursuant to the APPA. Although the APPA 
authorizes the use of additional procedures, 15 U.S.C. 16(f), those 
procedures are discretionary. A court need not invoke any of them 
unless it believes that the comments have raised significant issues 
and that further proceedings would aid the court in resolving those 
issues. See H.R. Rep. No. 93-1463, 93d Cong., 2d Sess. 8-9 (1974), 
reprinted in 1974 U.S.C.C.A.N. 6535, 6538-39.
---------------------------------------------------------------------------

[a]bsent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) 
]61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the proposed Final Judgment, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62. Courts have held that:

[t]he balancing of competing social and political interest affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\
---------------------------------------------------------------------------

    \2\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); Gillette, 406 F. Supp. at 716 
(noting that, in this way, the court is constrained to ``look at the 
overall picture not hypercritically, nor with a microscope, but with 
an artist's reducing glass''); see generally Microsoft, 56 F.3d at 
1461 (discussing whether ``the remedies [obtained in the decree are] 
so inconsonant with the allegations charged as to fall outside of 
the `reaches of the public interest' '').
---------------------------------------------------------------------------

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' '' United 
States v. AT&T Corp., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations 
omitted) (quoting Gillette, 406 F. Supp. at 716), aff'd sub nom. 
Maryland v. United States, 460 U.S. 1001 (1983); see also United States 
v. Alcan Aluminum Ltd., 605 F. supp. 619, 622 (W.D. Ky. 1985) 
(approving the consent judgment even though the court would have 
imposed a greater remedy).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 1459-60.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by plaintiff United States in 
formulating the proposed Final Judgment.

Dated: October 29, 2004.

     Respectfully submitted,
 /s/-------------------------------------------------------------------

Hillary B. Burchuk, (D.C. Bar # 366755)
Matthew C. Hammond
David T. Blonder
Benjamin Brown
Michael D. Chaleff
Benjamin Giliberti
Jeremiah M. Luongo
Lorenzo McRae (D.C. Bar # 473660)

Attorneys, Telecommunications & Media, Enforcement Section, 
Antitrust Division, U.S. Department of Justice, City Center 
Building, 1401 H Street, NW., Suite 8000, Washington, DC 20530, 
(202) 514-5621, Facsimile: (202) 514-6381.

[[Page 65640]]

Certificate of Service

    I hereby certify that copies of the Competitive Impact Statement 
have been mailed, by U.S. mail, postage preparid, to the attorneys 
listed below, the 29th day of October 2004.

Richard L. Rosen, Esq., Arnold & Porter LLP, 555 Twelfth St., NW, 
Washington, DC 20004.

Counsel For Defendants Cingular Wireless Corporation and SBC 
Communications, Inc.

Stephen M. Axinn, Esq., Axinn, Veltrop & Harkrider LLP, 1801 K St., 
NW, Washington, DC 2006.

Counsel For Defendants Cingular Wireless Corporation and BellSouth 
Corporation.

Ilene Knable Gotts, Esq., Wachtell, Lipton, Rosen & Katz51 West 52nd 
Street, New York, NY 10019.

Counsel for Defendant AT&T Wireless Services, Inc.

John T. Prud'homme, Jr., Esq, Assistant Attorney General, Antitrust 
and Civil Medicare Fraud Department, Office of the Attorney General, 
300 West 15th Street, 9th Floor, Austin, Texas 78701.

Counsel for Plaintiff State of Texas.

Rachel O. Davis, Esq., Assistant Attorney General, Antitrust 
Department, 55 Elm Street, Hartford, Connecticut 06106.

Counsel for Plaintiff State of Connecticut.

 /s/-------------------------------------------------------------------

Hillary B. Burchuk (D.C. Bar # 366755)
Matthew C. Hammond

Attorneys, Telecommunications & Media, Enforcement Section, 
Antitrust Division, U.S. Department of Justice, City Center 
Building, 1401 H Street, NW., Suite 8000, Washington, DC 20530, 
(202) 514-5621, Facsimile: (202) 514-6381.

In the United States District Court for the District of Columbia

United States of America, State of Connecticut and State of Texas, 
Plaintiffs, v. Cingular Wireless Corporation, SBC Communications Inc., 
BellSouth Corporation and AT&T Wireless Services, Inc., Defendants; 
Final Judgment

Civil No.: 1:04CV01850 (RBW)
Filed: November 3, 2004

    Whereas, plaintiffs, United States of America, and the states of 
Connecticut and Texas (``plaintiff states''), filed their Complaint on 
October 25, 2004, plaintiffs and defendants, Cingular Wireless 
Corporation, SBC Communications Inc., BellSouth Corporation and AT&T 
Wireless Services, Inc. (``AT&T Wireless''), by their respective 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of fact or law;
    And Whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by the defendants to 
assure that competition is not substantially lessened;
    And Whereas, plaintiffs require defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And Whereas, defendants have represented to plaintiffs that the 
divestitures required below can and will be made and that defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now Therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against defendants under Section 7 of the Clayton 
Act, 15 U.S.C. 18.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest the Divestiture Assets.
    B. ``AT&T Wireless'' means defendant AT&T Wireless Services, Inc., 
a Delaware corporation with headquarters in Redmond, Washington, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``BellSouth'' means defendant BellSouth Corporation, a Georgia 
corporation with headquarters in Atlanta, Georgia, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    D. ``Cingular'' means defendant Cingular Wireless Corporation, a 
Delaware corporation with headquarters in Atlanta, Georgia, and 
Cingular Wireless LLC, a Delaware limited liability company formed as a 
joint venture between SBC and BellSouth, with headquarters in Atlanta, 
Georgia, their successors and assigns, and their subsidiaries, 
divisions, groups, affiliates, partnerships and joint ventures, and 
their directors, officers, managers, agents, and employees.
    E. ``Divestiture Assets'' means Wireless Business Divestiture 
Assets, Spectrum License Divestiture Assets, and Minority Interests, 
including any direct or indirect financial ownership or leasehold 
interests and any direct or indirect role in management or 
participation in control therein.
    F. ``Minority Interests'' means the equity interests owned by any 
defendant in the following entities that are the licensees or operators 
of mobile wireless services businesses in the specified Metropolitan 
Statistical Areas (``MSAs'') and Rural Statistical Areas (``RSAs'') 
(collectively, Cellular Marketing Areas (``CMAs'')) used to define 
cellular license areas by the Federal Communications Commission 
(``FCC''):
    (1) Alltel Communications of North Louisiana Cellular Limited 
Partnership, covering the Shreveport, Louisiana MSA (CMA 100), Monroe, 
Louisiana MSA (CMA 219), Louisiana RSA-1 (CMA 454), Louisiana RSA-2 
(CMA 455) and Louisnana RSA-3 (CMA 456);
    (2) Athens Cellular Inc., covering the Athens, Georgia MSA (CMA 
234);
    (3) CellTelCo, covering the St. Joseph, Missouri MSA (CMA 275);
    (4) Pittsfield Cellular Telephone Co., covering the Pittsfield, 
Massachusetts MSA (CMA 213); and
    (5) Topeka Cellular Telephone Co., Inc., covering the Topeka, 
Kansas MSA (CMA 179).
    As an alternative to the divestiture of the Alltel Communications 
of North Louisiana Cellular Limited Partnership, CellTelCo, and Topeka 
Cellular Telephone Co., Inc. Minority Interests as required by Section 
IV of this Final Judgment, defendants may request, at least 20 days 
prior to consummation of the Transaction, approval from plaintiff 
United States to retain such interests. Plaintiff United States in its 
sole discretion may approve this request if it is demonstrated that the 
retained minority interest will become irrevocably and entirely 
passive, so long as defendants own the minority interests, and will not 
significantly diminish competition.
    G. ``Multi-line Business Customer'' means a corporate or business 
customer that contracts with AT&T Wireless for mobile wireless services 
to provide multiple telephones to its employees or members whose 
services are provided pursuant to a contract with a corporate or 
business customer.
    H. ``SBC'' means defendant SBC Communications Inc., a Delaware 
corporation with headquarters in San

[[Page 65641]]

Antonio, Texas, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships and joint ventures, and 
their directors, officers, managers, agents, and employees.
    I. ``Skagit'' means Skagit Wireless LLC, an Oregon corporation with 
headquarters in Portland, Oregon, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    J. ``Spectrum License Divestiture Assets'' means a license for 10 
MHz of contiguous PCS spectrum in the specified MSAs and Basic Trading 
Areas (``BTAs'') used to define cellular and PCS license areas by the 
FCC:
    (1) The Dallas-Fort Worth, Texas MSA (CMA 009);
    (2) The Detroit, Michigan BTA (BTA 112), provided that the license 
to be transferred does not have to include any PCS spectrum in Monroe 
and Sanilac counties; and
    (3) The Knoxville, Tennessee BTA (BTA 232), provided that as an 
alternative to the divestiture of a license for 10 MHz of contiguous 
PCS spectrum as required by Section IV of this Final Judgment, 
defendants, with the approval of plaintiff United States in its sole 
discretion, can restructure AT&T Wireless's existing relationship with 
Skagit such that (i) defendants have no equity or leasehold interest 
in, hold no debt of, and have no managerial or operational interest in 
Skagit's PCS license in the Knoxville Tennessee BTA, and (ii) Skagit's 
PCS license in the Knoxville Tennessee BTA is contractually committed 
to be used in a manner that resolve the competitive concerns alleged by 
plaintiffs in the Complaint.
    K. ``Transaction'' means the Agreement and Plan of Merger By and 
Among AT&T Wireless Services, Inc., Cingular Wireless Corporation, 
Cingular Wireless LLC, Links I Corporation, SBC Communications Inc., 
and BellSouth Corporation, dated February 17, 2004.
    L. ``Wireless Business Divestiture Assets'' means, for each mobile 
wireless business to be divested under this Final Judgment, all types 
of assets, tangible and intangible, used by defendants in the operation 
of the mobile wireless businesses to be divested (including the 
provision of long distance telecommunications services for wireless 
calls). ``Wireless Business Divestiture Assets'' shall be construed 
broadly to accomplish the complete divestitures of the entire business 
of AT&T Wireless in each of the following MSA and RSA license areas as 
required by this Final Judgment and to ensure that the divested mobile 
wireless businesses remain viable, ongoing businesses:
    (a) Oklahoma City, Oklahoma MSA (CMA 045);
    (b) Connecticut RSA-1 (CMA 357), provided that defendants may 
retain 10 MHz of AT&T Wireless's PCS spectrum, provided that 10 MHz of 
contiguous PCS spectrum throughout the RSA is divested to an Acquirer;
    (c) Kentucky RSA-1 (CMA 443), provided that defendants may retain 
15 MHz of AT&T Wireless's PCS spectrum in Fulton county and 10 MHz of 
AT&T Wireless's PCS spectrum in the other counties contained within the 
RSA, provided that 30 MHz of contiguous PCS spectrum in Fulton county 
and 20 MHz of contiguous PCS spectrum in the other counties contained 
in the RSA is divested to an Acquirer;
    (d) Oklahoma RSA-3 (CMA 598); and
    (e) Texas RSA-11 (CMA 662), provided that defendants may retain 25 
MHz of AT&T Wireless's PCS spectrum in Sabine county, and 20 MHz of 
AT&T Wireless's PCS spectrum in Angelina, Nacogdoches, and San 
Augustine counties, provided that 10 MHz of contiguous PCS spectrum 
throughout the RSA is divested to an Acquirer.
    Wireless Business Divestiture Assets shall include, without 
limitation, all types of real and personal property, monies and 
financial instruments, equipment, inventory, office furniture, fixed 
assets and furnishings, supplies and materials, contracts, agreements, 
leases, commitments, spectrum licenses issued by the FCC and all other 
licenses, permits and authorizations, operational support systems, cell 
sites, network infrastructure, switches, customer support and billing 
systems, interfaces with other service providers, business and customer 
records and information, customer contracts, customer lists, credit 
records, accounts, and historic and current business plans which relate 
primarily to the wireless business being divested, as well as any 
patents, licenses, sub-licenses, trade secrets, know-how, drawings, 
blueprints, designs, technical and quality specifications and 
protocols, quality assurance and control procedures, manuals and other 
technical information defendants supply to their own employees, 
customers, suppliers, agents, or licensees, and trademarks, trade names 
and service marks or other intellectual property, including all 
intellectual property rights under third-party licenses that are 
capable of being transferred to an Acquirer either in their entirety, 
for assets described in (1) below, or through a license obtained 
through or from the divesting defendant, for assets described in (2) 
below; provided that defendants shall only be required to divest Multi-
line business Customer contracts, if 50 percent or more of the Multi-
line Business Customer's subscribers reside or work within any of the 
five (5) license areas described herein, and further, any subscribers 
who obtain mobile wireless services through any such contract retained 
by defendants and who are located within the five (5) geographic areas 
identified above, shall be given the option to terminate their 
relationship with defendants, without financial cost, within one year 
of the closing of the Transaction. Defendants shall provide written 
notice to these subscribers within 45 days after the closing of the 
Transaction.
    These divestitures of the Wireless Business Divestiture Assets 
shall be accomplished by:
    (1) Transferring to the Acquirers the complete ownership and/or 
other rights to the assets (other than those assets used substantially 
in the operations of AT&T Wireless's overall wireless business which 
must be retained to continue the existing operations of the wireless 
properties that defendants are not required to divest, and that either 
are not capable of being divided between the divested wireless 
businesses and those not divested, or are assets that the defendants 
and the Acquirer(s) agree, subject to approval of plaintiff United 
States upon consultation with any relevant plaintiff state, shall not 
be divided); and
    (2) Granting to the Acquirer(s) an option to obtain a non-
exclusive, transferable license from defendants for a reasonable 
period, subject to approval of plaintiff United States upon 
consultation with any relevant plaintiff state, at the election of an 
Acquirer to use any of AT&T Wireless's retained assets under paragraph 
(1) above, used in the operation of the wireless business being 
divested, so as to enable the Acquirer to continue to operate the 
divested wireless business without impairment. Defendants shall 
identify in a schedule submitted to plaintiffs and filed with the 
Court, as expeditiously as possible following the filing of the 
Complaint and in any event prior to any divestitures and before the 
approval by the Court of this Final Judgment, any intellectual property 
rights under third-party licenses that are used by the wireless 
businesses being divested but that defendants could not transfer to an 
Acquirer entirely or by license without third-party consent, and the 
specific reasons why such consent is necessary and how such consent 
would be obtained for each asset.

[[Page 65642]]

III. Applicability

    A. This Final Judgment applies to defendants Cingular, SBC, 
BellSouth and AT&T Wireless, as defined above, and all other persons in 
active concert or participation with any of them who receive actual 
notice of this Final Judgment by personal service or otherwise.
    B. Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets or of lesser 
business units that include the Divestiture Assets, that the purchaser 
agrees to be bound by the provisions of this Final Judgment, provided 
that defendants need not obtain such an agreement from the Acquirer(s).

IV. Divestitures

    A. Defendants are ordered and directed, within 120 days after 
consummation of the Transaction, or five (5) days after notice of entry 
of this Final Judgment, whichever is later, to divest the Divestiture 
Assets to an Acquirer or Acquirers acceptable to plaintiff United 
States in its sole discretion upon consultation with any relevant 
plaintiff state, and, if applicable, to a Divestiture Trustee 
designated pursuant to Section V of this Final Judgment. Plaintiff 
United States, in its sole discretion upon consultation with any 
relevant plaintiff state, may agree to one or more extensions of this 
time period not to exceed 60 days in total, and shall notify the Court 
in such circumstances. With respect to divestiture of the Divestiture 
Assets by defendants or the Divestiture Trustee, if applications have 
been filed with the FCC within the period permitted for divestiture 
seeking approval to assign or transfer licenses to the Acquirer(s) of 
the Divestiture Assets, but an order or other dispositive action by the 
FCC on such applications has not been issued before the end of the 
period permitted for divestiture, the period shall be extended with 
respect to divestiture of those Divestiture Assets for which FCC 
approval has not been issued until five (5) days after such approval is 
received. Defendants agree to use their best efforts to accomplish the 
divestitures set forth in this Final Judgment and to seek all necessary 
regulatory approvals as expeditiously as possible. This Final Judgment 
does not limit the FCC's exercise of its regulatory powers and process 
with respect to the Divestiture Assets. Authorization by the FCC to 
conduct the divestiture of a Divestiture Asset in a particular manner 
will not modify any of the requirements of this decree.
    B. In accomplishing the divestitures ordered by this Final 
Judgment, defendants shall promptly make known, if they have not 
already done so, by usual and customary means, the availability of the 
Divestiture Assets. Defendants shall inform any person making inquiry 
regarding a possible purchase of the Divestiture Assets that they are 
being divested pursuant to this Final Judgment and provide that person 
with a copy of this Final Judgment. Defendants shall offer to furnish 
to all prospective Acquirers, subject to customary confidentiality 
assurances, all information and documents relating to the Divestiture 
Assets customarily provided in a due diligence process except such 
information or documents subject to the attorney-client or work 
productive privileges. Defendants shall make available such information 
to plaintiffs at the same time that such information is made available 
to any other person.
    C. Defendants shall provide to the Acquirer(s) and plaintiffs 
information relating to the personnel involved in the operation, 
development, and sale of the Wireless Business Divestiture Assets to 
enable the Acquirer(s) to make offers of employment. Defendants will 
not interfere with any negotiations by the Acquirer(s) to employ any 
defendant employee whose primary responsibility is the operation, 
development, and sale of the Wireless Business Divestiture Assets.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the Divestiture Assets; access to any and all environmental, zoning, 
and other permit documents and information; and access to any and all 
financial, operational, and other documents and information customarily 
provided as part of a due diligence process.
    E. Defendants shall warrant to all Acquirer(s) that (1) each asset 
of the Wireless Business Divestiture Assets will be operational on the 
date of sale, and (2) every wireless spectrum license is in full force 
and effect on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, licensing, operation, or divestiture of the Divestiture 
Assets.
    G. Defendants shall warrant to the Acquirer(s) of the Divestiture 
Assets that there are no material defects in the environmental, zoning, 
licensing or other permits pertaining to the operation of each assets, 
and that following the sale of the Divestiture Assets, defendants will 
not undertake, directly or indirectly, any challenges to the 
environmental, zoning, licensing or other permits relating to the 
operation of the Divestiture Assets.
    H. Unless plaintiff United States otherwise consents in writing, 
upon consultation with any relevant plaintiff state, the divestitures 
pursuant to Section IV, or by a Divestiture Trustee appointed pursuant 
to Section V of this Final Judgment, shall include the entire 
Divestiture Assets and with respect to the Wireless Business 
Divestiture Assets and Spectrum License Divestiture Assets, shall be 
accomplished in such a way as to satisfy plaintiff United States, in 
its sole discretion upon consultation with any relevant plaintiff 
state, that these assets can and will be used by the Acquirer(s) as 
part of a viable, ongoing business engaged in the provision of mobile 
wireless services. Divestiture of the Divestiture Assets may be made to 
one or more Acquirers, provided that in each instance it is 
demonstrated to the sole satisfaction of plaintiff United States upon 
consultation with any relevant plaintiff state, that the Divestiture 
Assets will remain viable and the divestiture of such assets will 
remedy the competitive harm alleged in the Complaint. The divestitures 
of the Wireless Business Divestiture Assets and Spectrum License 
Divestiture Assets, whether pursuant to Section IV or Section V of this 
Final Judgment,
    (1) Shall be made to an Acquirer (or Acquirers) that, in plaintiff 
United State's sole judgment upon consultation with any relevant 
plaintiff state, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the provision of mobile wireless services; and
    (2) Shall be accomplished so as to satisfy plaintiff United States 
in its sole discretion upon consultation with any relevant plaintiff 
state, that none of the terms of any agreement between the Acquirer (or 
Acquirers) and any defendant shall give defendants the ability 
unreasonably to raise the Acquirer's costs, to lower the Acquirer's 
efficiency, or otherwise to interfere with the ability of the Acquirer 
to compete effectively.
    I. At the option of the Acquirer(s), defendants shall enter into a 
contract for transition services customarily provided in connection 
with the sale of a business providing mobile wireless services 
sufficient to meet all or part of the needs of the Acquirer'(s) needs 
for a period of up to one year. The terms and conditions of any 
contractual arrangement meant to satisfy this provision must be 
reasonably related to market conditions.

[[Page 65643]]

    J. To the extent that the mobile wireless businesses to be divested 
use intellectual property, as required to be identified by Section 
II.L, that cannot be transferred or assigned without the consent of the 
licensor or other third parties, defendants shall use their best 
efforts to obtain those consents.
    K. In the event plaintiff United States approves retention of any 
Minority Interests, defendants shall not obtain any additional equity 
interest in such entity.

V. Appointment of Divestiture Trustee

    A. If defendants have not divested the Divestiture Assets within 
the time period specified in Section IV.A, defendants shall notify 
plaintiff United States and any relevant plaintiff state of that fact 
in writing, specifically identifying the Divestiture Assets that have 
not been divested. Then, upon application of plaintiff United States, 
upon consultation with any plaintiff state, the Court shall appoint a 
Divestiture Trustee selected by plaintiff United States and approved by 
the Court to effect the divestiture of the Divestiture Assets. The 
Divestiture Trustee, will have all the rights and responsibilities of 
the Management Trustee appointed pursuant to the Preservation of Assets 
Stipulation and Order, and will be responsible for:
    (1) Accomplishing divestiture of all Divestiture Assets transferred 
to the Divestiture Trustee from defendants, in accordance with the 
terms of this final Judgment, to an Acquirer or Acquirers approved by 
plaintiff United States, upon consultation with any relevant plaintiff 
state, under Sections IV.A and IV.C of this Final Judgment, and
    (2) Exercising the responsibilities of the licensee of any 
transferred Divestiture Assets and controlling and operating any 
transferred Wireless Business Divestiture Assets, to ensure that the 
businesses remain ongoing, economically viable competitors in the 
provision of mobile wireless services in the five (5) license areas 
specified in the Wireless Business Divestiture Assets, until they are 
divested to an Acquirer or Acquirers, and the Divestiture Trustee shall 
agree to be bound by this Final Judgment.
    B. Defendants shall submit a proposed trust agreement (``Trust 
Agreement'') to plaintiff United States and any relevant plaintiff 
state, which must be consistent with the terms of this Final Judgment 
and which must receive approval by plaintiff United States in its sole 
discretion, upon consultation with any relevant plaintiff state, who 
shall communicate to defendants within ten (10) business days its 
approval or disapproval of the proposed Trust Agreement, and which must 
be executed by the defendants and the Divestiture Trustee within five 
(5) business days after approval by plaintiff United States; and
    C. After obtaining any necessary approvals from the FCC for the 
assignment of the licenses of the remaining Divestiture Assets to the 
Divestiture Trustee, defendants shall irrevocably divest the remaining 
Divestiture Assets to the Divestiture Trustee, who will own such assets 
(or own the stock of the entity owning such assets, if divestiture is 
to be effected by the creation of such an entity for sale to 
Acquirer(s)) and control such assets, subject to the terms of the 
approved Trust Agreement.
    D. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the Divestiture Assets. The Divestiture Trustee shall have the power 
and authority to accomplish the divestiture to an Acquirer(s) 
acceptable to plaintiff United States, in its sole judgment upon 
consultation with any relevant plaintiff state, at such price and on 
such terms as are then obtainable upon reasonable effort by the 
Divestiture Trustee, subject to the provisions of Sections IV, V, and 
VI of this Final Judgment, and shall have such other powers as this 
Court deems appropriate. Subject to Section V.G of this Final Judgment, 
the Divestiture Trustee may hire at the cost and expense of defendants 
the Management Trustee appointed pursuant to the Preservation of Assets 
Stipulation and Order, and any investment bankers, attorneys or other 
agents, who shall he solely accountable to the Divestiture Trustee, 
reasonably necessary in the Divestiture Trustee's judgment to assist in 
the divestiture.
    E. In addition, notwithstanding any provision to the contrary, 
plaintiff United States, in its sole discretion upon consultation with 
any relevant plaintiff state, may require defendants to include 
additional assets, or allow, with the written approval of plaintiff 
United States, defendants to substitute substantially similar assets, 
which substantially relate to the Wireless Business Divestiture Assets 
to be divested by the Divestiture Trustee to facilitate prompt 
divestiture to an acceptable Acquirer.
    F. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such objections by defendants must be conveyed in writing to plaintiff 
United States, any relevant plaintiff state, and the Divestiture 
Trustee within ten (10) calendar days after the Divestiture Trustee has 
provided the notice required under Section VI.
    G. The Divestiture Trustee shall serve at the cost and expense of 
defendants, on such terms and conditions as plaintiff United States 
approves, and shall account for all monies derived from the sale of the 
assets sold and all costs and expenses so incurred. After approval by 
the Court of the Divestiture Trustee's accounting, including fees for 
its services and those of any professionals and agents retained by the 
Divestiture Trustee, all remaining money shall be paid to defendants 
and the trust shall then be terminated. The compensation of the 
Divestiture Trustee and any professionals and agents retained by the 
Divestiture Trustee shall be reasonable in light of the value of the 
Divestiture Assets and based on a fee arrangement providing the 
Divestiture Trustee with an incentive based on the price and terms of 
the divestiture, and the speed with which it is accomplished, but 
timeliness is paramount.
    H. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestitures 
including their best efforts to effect all necessary regulatory 
approvals and will provide any necessary representations or warranties 
as appropriate related to sale of the Divestiture Assets. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other persons retained by the Divestiture Trustee shall have full and 
complete access to the personnel, books, records, and facilities of the 
business to be divested, and defendants shall develop financial and 
other information relevant to the assets to be divested as the 
Divestiture Trustee may reasonably request, subject to reasonable 
protection for trade secret or other confidential research, 
development, or commercial information. Defendants shall take no action 
to interfere with or to impede the Divestiture Trustee's accomplishment 
of the divestitures.
    I. After its appointment, the Divestiture Trustee shall file 
monthly reports with plaintiff United states, any relevant plaintiff 
state, and the Court setting forth the Divestiture Trustee's efforts to 
accomplish the divestitures ordered under this Final Judgment. To the 
extent such reports contain information that the Divestiture Trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. Such reports shall include the name, address, and 
telephone number of each person who, during the preceding

[[Page 65644]]

month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The 
Divestiture Trustee shall maintain full records of all efforts made to 
divest the Divestiture Assets.
    J. If the Divestiture Trustee has not accomplished such 
divestitures within six months after its appointment, the Divestiture 
Trustee shall promptly file with the Court a report setting forth (1) 
the Divestiture Trustee's efforts to accomplish the required 
divestitures, (2) the reasons, in the Divestiture Trustee's judgment, 
why the required divestitures have not been accomplished, and (3) the 
Divestiture Trustee's recommendations. To the extent such reports 
contain information that the Divestiture Trustee deems confidential, 
such reports shall not be filed in the public docket of the Court. The 
Divestiture Trustee shall at the same time furnish such report to the 
plaintiff United States and any relevant plaintiff state who shall have 
the right to make additional recommendations consistent with the 
purpose of the trust. The Court thereafter shall enter such orders as 
it shall deem appropriate to carry out the purpose of the Final 
Judgment, which may, if necessary, include extending the trust and the 
term of the Divestiture Trustee's appointment by a period requested by 
plaintiff United States upon consultation with any relevant plaintiff 
state.
    K. After defendants transfer the Divestiture Assets to the 
Divestiture Trustee, and until those Divestiture Assets have been 
divested to an Acquirer or Acquirers approved by plaintiff United 
States pursuant to Section IV.A and IV.H the Divestiture Trustee shall 
have sole and complete authority to manage and operate the Divestiture 
Assets and to exercise the responsibilities of the licensee, and shall 
not be subject to any control or direction by defendants. Defendants 
shall not retain any economic interest in the Divestiture Assets 
transferred to the Divestiture Trustee, apart from the right to receive 
the proceeds of the sale or other disposition of the Divestiture 
Assets.
    L. The Divestiture Trustee shall operate the Wireless Business 
Divestiture Assets consistent with the Preservation of Assets 
Stipulation and Order and this Final Judgment, with control over 
operations, marketing and sales. Defendants shall not attempt to 
influence the business decisions of the Divestiture trustee concerning 
the operation and management of the Wireless business Divestiture 
Assets, and shall not communicate with the Divestiture Trustee 
concerning divestiture of the Divestiture Assets or take any action to 
influence, interfere with, or impede the Divestiture trustee's 
accomplishment of the divestitures required by this Final Judgment, 
except that defendants may communicate with the Divestiture Trustee to 
the extent necessary for defendants to comply with this Final Judgment 
and to provide the Divestiture Trustee, if requested to do so, with 
whatever resources or cooperation may be required to complete 
divestiture of the Divestiture Assets and to carry out the requirements 
of the Preservation of Assets Stipulation and Order and this Final 
Judgment. Except as provided in this Final Judgment and the 
Preservation of Assets Stipulation and Order, in no event shall 
defendants provide to, or receive from, the Divestiture Trustee or the 
mobile wireless businesses under the Divestiture Trustee's control any 
non-public or competitively sensitive marketing, sales, or pricing 
information relating to their respective mobile wireless businesses.

VI. Notice of Proposed Divestitures

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, defendants or the Divestiture Trustee, whichever 
is then responsible for effecting the divestitures required herein, 
shall notify plaintiff United States and any relevant plaintiff state 
in writing of any proposed divestiture required by Section IV or V of 
this Final Judgment. If the Divestiture Trustee is responsible, it 
shall similarly notify defendants. The notice shall set forth the 
details of the proposed divestiture and list the name, address, and 
telephone number of each person not previously identified who offered 
or expressed an interest in or desire to acquire any ownership interest 
in the Divestiture Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by plaintiff United 
States and any relevant plaintiff state of such notice, plaintiff 
United States and any relevant plaintiff state may request from 
defendants, the proposed Acquirer or Acquirers, any other third party, 
or the Divestiture Trustee if applicable additional information 
concerning the proposed divestiture, the proposed Acquirer or 
Acquirers, and any other potential Acquirer. Defendants and the 
Divestiture Trustee shall furnish any additional information requested 
within fifteen (15) calendar days of the receipt of the request, unless 
the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after plaintiff United States and any 
relevant plaintiff state have been provided the additional information 
requested from defendants, the proposed Acquirer or Acquirers, any 
third party, and the Divestiture Trustee, whichever is later, plaintiff 
United States, upon consultation with any relevant plaintiff state, 
shall provide written notice to defendants and the Divestiture Trustee, 
if there is one, stating whether or not it objects to the proposed 
divestiture. If plaintiff United States provides written notice that it 
does not object, the divestiture may be consummated, subject only to 
defendants' limited right to object to the sale under Section V.F of 
this Final Judgment. Absent written notice that plaintiff United States 
does not object to the proposed Acquirer or upon objection by plaintiff 
United States, a divestiture proposed under Section IV or Section V 
shall not be consummated. Upon objection by defendants under Section 
V.F, a divestiture proposed under Section V shall not be consummated 
unless approved by the Court.

VII. Financing

    Defendants shall not finance all or any part of any divestiture 
made pursuant to Section IV or V of this Final Judgment.

VIII. Preservation of Assets

    Until the divestitures required by this Final Judgment have been 
accomplished, defendants shall take all steps necessary to comply with 
the Preservation of Assets Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestitures 
ordered by this Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestitures have been completed under Section IV or V of this 
Final Judgment, defendants shall deliver to plaintiff United States and 
any relevant plaintiff state and affidavit as to the fact and manner of 
its compliance with Section IV or V of this Final Judgment. Each such 
affidavit shall include the name, address, and telephone number of each 
person who during the preceding thirty (30) days, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, any 
interest in the Divestiture

[[Page 65645]]

Assets, and shall describe in detail each contact with any such person 
during that period. Each such affidavit shall also include a 
description of the efforts defendants have taken to solicit buyers for 
the Divestiture Assets, and to provide required information to 
prospective Acquirers, including the limitations, if any, on such 
information. Assuming the information set forth in the affidavit is 
true and complete, any objection by plaintiff United States, after 
consultation with any relevant state, to information provided by 
defendants, including limitation on information, shall be made within 
fourteen (14) calendar days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to plaintiff United States and 
any relevant plaintiff state an affidavit that describes in reasonable 
detail all actions defendants have taken and all steps defendants have 
implemented on an ongoing basis to comply with Section VIII of this 
Final Judgment. Defendants shall deliver to plaintiff United States and 
any relevant plaintiff state an affidavit describing any changes to the 
efforts and actions outlined in defendants' earlier affidavits provided 
pursuant to this section within fifteen (15) calendar days after the 
change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestitures have been completed.

X. Compliance Inspection

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to defendants, be 
permitted:
    (1) Access during defendants' office hours to inspect and copy, or 
at plaintiff United States' option, to require defendants provide 
copies of, all books, ledgers, accounts, records and documents in the 
possession, custody, or control of defendants, relating to any matters 
contained in this Final Judgment; and
    (2) To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by plaintiff United States to any person 
other than an authorized representative of the executive branch of the 
United States or, pursuant to a customary protective Order or waiver of 
confidentiality by defendants, the FCC, except in the course of legal 
proceedings to which the United States is a party (including grand jury 
proceedings), or for the purpose of securing compliance with this Final 
Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to plaintiff United States, defendants represent and 
identify in writing the material in any such information or documents 
to which a claim of protection may be asserted under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure, and defendants mark each 
pertinent page of such material, ``Subject to claim of protection under 
Rule 26(c)(7) of the Federal Rules of Civil Procedure,'' then plaintiff 
United States shall give defendants ten (10) calendar days notice prior 
to divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. No Reacquisition

    Defendants may not reacquire or lease any part of the Divestiture 
Assets during the term of this Final Judgment.

XII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XIV. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

 Date:-----------------------------------------------------------------
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United States District Judge

In the United States District Court for the District of Columbia

United States of America, Department of Justice, Antitrust Division, 
1401 H Street, NW., Suite 8000, Washington, DC 20530, State of 
Connecticut, Office of the Attorney General, 55 Elm Street, Hartford, 
CT 06106, and State of Texas, Office of the Attorney General, P.O. Box 
12548, Austin, TX 78711, Plaintiffs, v. Cingular Wireless Corporation, 
5565 Glenridge Connector, Atlanta, GA 30349, SBC Communications Inc., 
174 East Houston, San Antonio, TX 78205, Bellsouth Corporation, 1155 
Peachtree Street, NE., Atlanta, GA 30309, and AT&T Wireless Services, 
Inc., 7277 164th Avenue, NE., Building 1, Redmond, WA 98052, 
Defendants; Complaint

Civil No.: 1:04CV01850 (RBW)
Filed: 10/25/04

    The United States of America, acting under the direction of the 
Attorney General of the United States, and the states of Connecticut 
and Texas (``plaintiff states''), acting under the direction of their 
respective Attorneys General, or other authorized officials, bring this 
civil action to enjoin the merger of two of the largest mobile wireless 
telecommunications services providers in the United States, Cingular 
Wireless Corporation (``Cingular'') and AT&T Wireless Services, Inc. 
(``AT&T Wireless''), and to obtain other relief as appropriate. 
Plaintiffs allege as follows:
    1. On February 17, 2004, Cingular, a joint venture between SBC 
Communications Inc. (``SBC'') and BellSouth Corporation 
(``BellSouth''), entered into an agreement to acquire AT&T Wireless 
under which the two companies would combine their mobile wireless 
services businesses. Plaintiffs seek to enjoin this transaction because 
it will substantially lessen competition in several geographic markets 
for mobile wireless telecommunications services and mobile wireless 
broadband services (collectively, ``mobile wireless services'').
    2. Cingular and AT&T Wireless are the second and third-largest 
mobile wireless services providers in the

[[Page 65646]]

United States, with approximately 24 and 22 million subscribers, 
respectively. They both provide mobile wireless services in areas 
throughout the United States and are two of only six providers with a 
national presence. As a result, Cingular and AT&T Wireless both provide 
mobile wireless services in hundreds of overlapping geographic areas, 
and in 13 of these areas the combination of Cingular's and AT&T 
Wireless's assets and business will likely result in substantially less 
competition for mobile wireless services. In 10 of these overlapping 
geographic areas located in the states of Connecticut, Georgia, Kansas, 
Kentucky, Louisiana, Massachusetts, Missouri, Oklahoma, and Texas, the 
combination of Cingular and AT&T Wireless will substantially lessen 
competition for mobile wireless telecommunications services, increasing 
the likelihood of unilateral actions by the merged firm to increase 
prices, diminish the quality or quantity of services provided, refrain 
from or delay making investments in network improvements, and refrain 
from or delay launching new services, substantially lessening 
competition for these services. In three of these overlapping 
geographic areas located in the states of Michigan, Tennessee, and 
Texas, both Cingular and AT&T Wireless have launched or will likely 
soon launch mobile wireless broadband services, and the transaction 
will result in the loss of one of only a few existing and likely mobile 
wireless broadband services providers, substantially lessening 
competition for these services.

I. Jurisdiction and Venue

    3. Complaint is filed by the United States under Section 15 of the 
Clayton Act, 15 U.S.C. 25, to prevent and restrain defendants from 
violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    4. Plaintiff states bring this action under Section 16 of the 
Clayton Act, 15 U.S.C. 26, to prevent and restrain the violation by 
defendants of Section 7 of the Clayton Act, 15 U.S.C. 18. Plaintiff 
states, by and through their respective Attorneys General, or other 
authorized officials, bring this action in their sovereign capacities 
and as parens patriae on behalf of the citizens, general welfare, and 
economy of each of their states.
    5. Cingular, AT&T Wireless, SBC, and BellSouth are engaged in 
interstate commerce and in activities substantially affecting 
interstate commerce. The Court has jurisdiction over this action 
pursuant to Sections 15 and 16 of the Clayton Act, 15 U.S.C. 25, 26, 
and 28 U.S.C. 1331, 1337.
    6. Cingular, AT&T Wireless, SBC, and BellSouth transact business or 
are found in the District of Columbia. Venue is proper in this Court 
pursuant to Section 12 of the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 
1391(b) and (c).

II. The Defendants and the Transaction

    7. Cingular, which headquarters in Atlanta, Georgia, is a company 
organized and existing under the laws of the state of Delaware. 
Cingular was formed in 2000 by SBC and BellSouth, who own equity 
interests in it of 60 and 40 percent, respectively, SBC and BellSouth 
evenly share management control of Cingular. Cingular is the second-
largest provider of mobile wireless voice and data services in the 
United States by number of subscribers; it serves more than 24 million 
customers. In 2003, Cingular earned revenues of approximately $15.5 
billion.
    8. SBC, with headquarters in San Antonio, Texas, is a corporation 
organized and existing under the laws of the state of Delaware. SBC is 
a regional bell operating company (``RBOC''), one of several regional 
holding companies formed in 1984 as a result of the breakup of AT&T 
Corporation's local telephone business. SBC's wireless 
telecommunications businesses serve 54.7 million access lines in 13 
states; Arkansas, California, Connecticut, Illinois, Indiana, Kansas, 
Michigan, Missouri, Nevada, Ohio, Oklahoma, Texas, and Wisconsin. In 
2003, SBC earned approximately $40.8 billion in revenues.
    9. BellSouth, an RBOC with headquarters in Atlanta, Georgia, is a 
corporation organized and existing under the laws of the state of 
Georgia. BellSouth's wireline telecommunications businesses serves 23.7 
million access lines in 9 states: Alabama, Florida, Georgia, Kentucky, 
Louisiana, Mississippi, North Caroline, South Carolina, and Tennessee. 
Its total operating revenues for 2003 were approximately $22.6 billion.
    10. AT&T Wireless, with headquarters in Redmond, Washington, is a 
corporation organized and existing under the laws of the state of 
Delaware. spun off from AT&T Corporation in 2001, it had more than 22 
million subscribers as of August 2004 an earned revenues of 
approximately $16.6 billion in 2003. AT&T Wireless is the third-largest 
U.S. mobile wireless services provider by number of subscribers.
    11. Pursuant to an Agreement and Plan of Merger dated February 17, 
2004, Cingular will pay AT&T Wireless shareholders $15 per common share 
and thereby plans to acquire AT&T Wireless for approximately $41 
billion in cash. If this transaction is consummated, Cingular and AT&T 
Wireless combined would have more than 46 million subscribers, with 
over $32 billion in revenues, making it the largest mobile wireless 
sevices provider in the United States, with operations in 49 states 
covering 97 of the top 100 marketing areas.

III. Trade and Commerce

A. Nature of Trade and Commerce

    12. Mobile wireless services allow customers to make and receive 
telephone calls and use data services using radio transmissions without 
being confined to a small area during the call or data session, and 
without the need for unobstructed line-of-sight to the radio tower. 
This mobility is highly prized by customers, as demonstrated by the 
more than 160 million people in the United States who own mobile 
wireless telephones. In 2003, revenues from the sale of mobile wireless 
services in the United States were nearly $90 billion.
    13. The first wireless voice systems were based on analog 
technology, now referred to as first-generation or ``IG'' technology. 
These analog systems were launched after the FCC issued the first 
licenses for mobile wireless telephone service: two cellular licenses 
(A-block and B-block) in each geographic area in the early to mid-
1980s. The licenses are in the 800 MHz range of the radio spectrum, 
each license consists of 25 MHz of spectrum, and they are issued for 
each Metropolitan Statistical Area (``MSA'') and Rural Service Area 
(``RSA'') (collectively, ``Cellular Marketing Areas'' or ``CMAs''), 
with a total of 734 CMAs covering the entire United States. In 1982, 
one of the licenses was issued to the incumbent local exchange carrier 
in the market, and the other was issued by lottery to someone other 
than the incumbent. Cellular licensees must support analog service 
until February 2008.
    14. In 1995, the FCC allocated and subsequently issued licenses for 
additional spectrum for the provision of Personal Communications 
Services (``PCS''), a category of services that includes mobile 
wireless telephone services comparable to those offered by cellular 
licensees. These licenses are in the 1.8 GHz range of the radio 
spectrum and are divided into six blocks: A, B, and C, which consist of 
30 MHz each; and D, E, and F, which consist of 10 MHz each. 
Geographically, the A- and B-block 30 MHz licenses are issued by Major 
Trading Areas (``MTAs''), and C-, D-, E-, and F-block licenses are 
issued by Basic Trading Areas

[[Page 65647]]

(``BTAs''), several of which comprise each MTA. MTAs and BTAs do not 
generally correspond to MSAs and RSAs. With the introduction of the PCS 
licenses, both cellular and PCS licensees began offering digital 
services, thereby increasing capacity, shrinking handsets, and 
extending battery life. Unlike the cellular licenses, PCS licensees are 
not required to provide support for analog or any other technology 
standard. In 1996, one provider, a specialized mobile radio (``SMR'' or 
``dispatch'') spectrum licensee, began to use its SMR spectrum to offer 
mobile wireless telephone services comparable to those offered by other 
mobile wireless services providers, in conjunction with its dispatch, 
or ``push-to-talk,'' service.
    15. Today, more than 90 percent of all mobile wireless services 
customers have digital service, and nearly all mobile wireless voice 
service has migrated to second-generation or ``2G'' digital 
technologies: TDMA (time division multiple access), GSM (Global 
Standard for Mobile, a type of TDMA standard used by all carriers in 
Europe), and CDMA (code division multiple access). Mobile wireless 
services providers have chosen to build their networks on these 
incompatible technologies and most have chosen CDMA or GSM, with TDMA 
having been orphaned by equipment vendors. (The SMR providers use a 
fourth incompatible technological standard better suited to the 
spectrum they own, and, as SMR licensees, they have no obligation to 
support a specific technology standard.) Even more advanced 
technologies (``2.5G'') have begun to be deployed for voice and data 
(e.g., 1xRTT (a/k/a CDMA 2000), GPRS (General Packet Radio Service), 
and EDGE (Enhanced Data for GSM Evolution)). The data transmission 
speeds of these technologies vary. For example, 1xRTT provides average 
user speeds of 70 kilobits per second (``kbps''), and GRPS and EDGE 
provide average user speeds of 20 to 40 kbps and 80 to 110 kbps, 
respectively.
    16. The U.S. mobile wireless services industry is taking the next 
evolutionary step in wireless technology to third-generation or ``3G'' 
technologies (e.g., for GSM, UMTS (Universal Mobile Telecommunications 
System) and for CDMA, Ev-DO/DV (Evolution Data Only/Data Voice)) that 
provide for more capacity and higher data throughout. All of the 
national mobile wireless services providers and some of the regional 
providers are considering how and where they will deploy 3G services 
across their networks. The data transmission speeds of these 
technologies vary. UMTS provides average user speeds of 200 to 300 
kbps, whereas Ev-DO provides average user speeds of 300 to 500 kbps.

B. Relevant Product Markets

    17. Mobile wireless telecommunications services and mobile wireless 
broadband services are relevant product markets (collectively, ``mobile 
wireless services'').
1. Mobile Wireless Telecommunications Services
    18. Mobile wireless telecommunications services include both voice 
and data services provided over a radio network and allow customers to 
maintain their telephone calls or data sessions without wires, such as 
when traveling. There are no cost-effective alternatives to mobile 
wireless telecommunications services. Fixed wireless services are not 
mobile, and other wireless services have a limited range (e.g., Wi-Fi); 
neither offers a viable alternative to mobile wireless 
telecommunications services. It is unlikely that a sufficient number of 
customers would switch away from mobile telecommunications services to 
make a small but significant price increase in those services 
unprofitable. Mobile wireless telecommunications services is a relevant 
product market under Section 7 of the Clayton Act, 15 U.S.C. 18.
2. Mobile Wireless Broadband Services
    19. Mobile wireless broadband services offer data speeds four to 
six times faster than the current data offerings fully deployed in any 
mobile wireless services provider's network. Mobile wireless broadband 
services, which are now being launched using various 3G technologies, 
offer average data speeds of 200 to 300 kbps, peaking at 2 megabits per 
second or higher. These speeds rival wireline broadband services at 
peak speeds. At average speeds, they are comparable to low-end wireline 
high-speed data offerings and can support bandwidth-intensive services 
including video conferencing, video streaming, downloading of music and 
video files, and voice over Internet protocol (``VoIP'') calling, none 
of which can be used reliably at slower speeds. There are no cost-
effective alternatives to mobile wireless broadband services. As with 
mobile wireless telecommunications services, fixed wireless services 
and other wireless services that have a limited range (e.g., Wi-Fi) do 
not offer a viable alternative to mobile wireless broadband services. 
It is unlikely that a sufficient number of customers would switch away 
from mobile wireless broadband services to make a small but significant 
price increase in those services unprofitable. Mobile wireless 
broadband services is a relevant product market under Section 7 or the 
Clayton Act, 15 U.S.C. 18.

C. Relevant Geographic Markets

    20. The large majority of customers use mobile wireless services in 
close proximity to their workplaces and homes. Thus, customers 
purchasing mobile wireless telecommunications services and mobile 
wireless broadband services choose among mobile wireless services 
providers that offer services where they are located and travel on a 
regular basis: home, work, other areas they commonly visit, and areas 
in between. The number and identity of mobile wireless services 
providers varies from geographic area to geographic area, along with 
the quality of their services and the breadth of their geographic 
coverage, all of which are significant factors in customers' purchasing 
decisions. Mobile wireless services providers can and do offer 
different promotions, discounts, calling plans, and equipment subsidies 
in different geographic areas, effectively varying the actual price for 
customers by geographic area.
    21. The United States comprises numerous local geographic markets 
for mobile wireless services. These local geographic markets are 
generally centered around a metropolitan area or a population center 
and its environs. The FCC has licensed a limited number of mobile 
wireless services providers in these and other geographic areas based 
upon the availability of radio spectrum. These FCC spectrum licensing 
areas therefore often represent the core of the business and social 
sphere where customers face the same competitive choices for mobile 
wireless services. The relevant geographic markets in which this 
transaction will substantially lessen competition in mobile wireless 
telecommunications services and mobile wireless broadband services are 
effectively represented, but not defined, by FCC spectrum licensing 
areas.
    22. The relevant geographic markets, under Section 7 of the Clayton 
Act, 15 U.S.C. 18, where the transaction will substantially lessen 
competition for mobile wireless telecommunications services are 
represented by the following FCC spectrum licensing areas: Oklahoma 
City, Oklahoma (CMA 045), Topeka, Kansas (CMA 179), Pittsfield, 
Massachusetts (CMA 213), Athens, Georgia (CMS 234), St. Joseph, 
Missouri (CMA 275), Connecticut RSA-1 (CMA 357), Kentucky RSA-1 (CMA 
443), Oklahoma RSA-3 (CMA 598), Texas

[[Page 65648]]

RSA-11 (CMA 662), and Shreveport, Louisiana (BTA 419).
    23. The relevant geographic markets, under Section 7 of the Clayton 
Act, 15 U.S.C. 18, where the transaction will substantially lessen 
competition for mobile wireless broadband services are represented by 
the following FCC spectrum licensing areas: Dallas-Fort Worth, Texas 
(CMA 009), Detroit, Michigan (BTA 112), and Knoxville, Tennessee (BTA 
232).
    24. It is unlikely that a sufficient number of customers would 
switch to mobile wireless services providers in a different geographic 
market to make a small but significant price increase in the relevant 
geographic markets unprofitable for mobile wireless telecommunications 
services or mobile wireless broadband services.

D. Anticompetitive Effects

1. Mobile Wireless Telecommunications Services
    25. Currently, Cingular and AT&T Wireless both own all or part of 
businesses that offer mobile wireless telecommunications services in 
the 10 relevant geographic areas. In Athens, Georgia; Topeka, Kansas; 
Pittsfield, Massachusetts; and St. Joseph, Missouri, AT&T Wireless owns 
a minority equity interest in Verizon Wireless's business providing 
mobile wireless telecommunications services. In Shreveport, Louisiana, 
Cingular owns a minority equity interest in AllTel Corporations' 
business providing mobile wireless telecommunications services. The 
minority equity interest range from approximately 9 to 24 percent. 
Based upon these significant minority equity interests and the specific 
facts of the relationships, the shares and assets of the mobile 
wireless services business partially owned by Cingular or AT&T Wireless 
in these markets should be attributed to either Cingular or AT&T 
Wireless.
    26. The individual market shares of Cingular's and AT&T Wireless's 
mobile wireless telecommunications services businesses in the relevant 
geographic markets as measured in terms of subscribers range from 9 to 
more than 71 percent, and their combined market shares range from 61 to 
nearly 90 percent. In each relevant geographic market, Cingular or AT&T 
Wireless has the largest market share, and in all but one, the other is 
the second-largest mobile wireless telecommunications services 
provider. In all but one of the relevant geographic markets, Cingular 
and AT&T Wireless are the original cellular licensees and, as a result, 
have the network infrastructures with the greatest depth and breadth of 
coverage. Therefore, Cingular and AT&T Wireless are likely closer 
substitutes for each other than the other mobile wireless 
telecommunications services providers in the relevant geographic 
markets.
    27. The relevant geographic markets for mobile wireless 
telecommunications services are highly concentrated. As measured by the 
Herfindahl-Hirschman Index (``HHI''), which is commonly employed in 
merger analysis and is defined and explained in Appendix A to this 
Complaint, concentration in these markets ranges from approximately 
2600 to more than 5300, which is well above the 1800 threshold at which 
the Department considers a market to be highly concentrated. After 
Cingular's proposed acquisition of AT&T Wireless is consummated, the 
HHIs in the relevant geographic markets will range from approximately 
4400 to more than 8000, with increases in the HHI as a result of the 
merger ranging from approximately 1100 to more than 3500, much higher 
than the thresholds below which the Department considers a transaction 
unlikely to cause competitive harm.
    28. Competition between Cingular and AT&T Wireless in the relevant 
geographic markets has resulted in lower prices and higher quality in 
mobile wireless telecommunications services, than would otherwise have 
existed in these geographic markets. If Cingular's proposed acquisition 
of AT&T Wireless is consummated, the relevant geographic markets for 
mobile wireless telecommunications services will become substantially 
more concentrated, and the competition between Cingular and AT&T 
Wireless in mobile wireless telecommunications services will be 
eliminated in these markets. As a result, the loss of competition 
between Cingular and AT&T Wireless increases the likelihood of 
unilateral actions by the merged firm in the relevant geographic 
markets to increase prices, diminish the quality of services provided, 
refrain from or delay making investments in network improvements, and 
refrain from or delay launching new services. Therefore, Cingular's 
proposed acquisition of AT&T Wireless will likely result in 
substantially less competition in mobile wireless telecommunications 
services in the relevant geographic markets.
2. Mobile Wireless Broadband Services
    29. In the relevant geographic markets for mobile wireless 
broadband services, Cingular and AT&T Wireless have either launched or 
are likely soon to launch mobile wireless broadband services. Each has 
the available spectrum necessary to offer mobile wireless broadband 
services and has business plans to offer these services in these 
markets. Not all mobile wireless services providers have sufficient 
spectrum to launch mobile wireless broadband services in these markets, 
nor do they all have business plans to do so. In the relevant 
geographic markets, the current number of mobile wireless services 
providers that are likely to launch mobile wireless broadband services 
in the foreseeable future is limited. Because mobile wireless broadband 
services are nascent, however, HHIs are uninformative.
    30. The competition between Cingular and AT&T Wireless has 
motivated their efforts to develop and launch mobile wireless broadband 
services in the relevant geographic markets. If Cingular's proposed 
acquisition of AT&T Wireless is consummated, the relevant geographic 
markets will lose one of only a few existing and likely mobile wireless 
broadband services providers. As a result, the loss of competition 
between Cingular and AT&T Wireless increases the likelihood of 
unilateral actions by the merged firm in these relevant geographic 
markets to increase prices, diminish the quality or quantity of 
services provided, refrain from or delay making investments in network 
improvements, and refrain from or delay launching mobile wireless 
broadband services. Therefore, Cingular's proposed acquisition of AT&T 
Wireless will likely result in substantially less competition in mobile 
wireless broadband services in the relevant geographic markets.
3. Entry
    31. Entry by a new mobile wireless services provider in the 
relevant geographic markets would be difficult, time-consuming, and 
expensive, requiring the acquisition of spectrum licenses and the 
build-out of a network. Therefore, new entry in response to a small but 
significant price increase for mobile wireless telecommunications 
services or mobile wireless broadband services by the merged firm in 
the relevant geographic markets would not be timely, likely, or 
sufficient to thwart the competitive harm resulting from Cingular's 
proposed acquisition of AT&T Wireless, if it were to be consummated.

IV. Violation Alleged

    32. The effect of Cingular's proposed acquisition of AT&T Wireless, 
if it were to be consummated, may be substantially to lessen 
competition in interstate trade and commerce in the relevant geographic 
markets for mobile

[[Page 65649]]

wireless telecommunications services and mobile wireless broadband 
services, in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    33. Unless restrained, the transaction will likely have the 
following effects in mobile wireless telecommunications services and 
mobile wireless broadband services in the relevant geographic markets, 
among others:
    a. Actual and potential competition between Cingular and AT&T 
Wireless will be eliminated;
    b. Competition in general will be lessened substantially;
    c. Prices are likely to increase;
    d. The quality and quantity of services are likely to decrease;
    e. Incentives to improve wireless networks will be reduced; and
    f. Incentives to innovate or launch new services will be reduced.

V. Requested Relief

    34. That Cingular's proposed acquisition of AT&T Wireless be 
adjudged to violate Section 7 of the Clayton Act, 15 U.S.C. 18;
    35. That defendants be permanently enjoined from and restrained 
from carrying out the Agreement and Plan of merger, dated February 17, 
2004, or from entering into or carrying out any agreement, 
understanding, or plan, the effect of which would be to bring the 
wireless telecommunications services businesses of Cingular and AT&T 
Wireless under common ownership or control;
    36. That plaintiffs be awarded their costs of this action; and
    37. That plaintiffs have such other relief as the Court may deem 
just and proper.

Dated: October 25, 2004.

     Respectfully Submitted,

For Plaintiff United States of America:

 /s/-------------------------------------------------------------------
R. Hewitt Pate

Assistant Attorney General, Antitrust Division.

 /s/-------------------------------------------------------------------
J. Bruce McDonald

Deputy Assistant Attorney General Antitrust Division.

J. Robert Kramer II,

Director of Operations, Antitrust Division.

 /s/-------------------------------------------------------------------
Nancy Goodman (D.C. Bar 251694),

Chief, Telecommunications & Media, Enforcement Section, Antitrust 
Division.

 /s/-------------------------------------------------------------------
Laury Bobbish,

Assistant Chief, Telecommunications & Media Enforcement Section, 
Antitrust Division.

 /s/-------------------------------------------------------------------
Hillary B. Burchuk (D.C. Bar 366755),
Matthew C. Hammond,
David T. Blonder,
Benjamin Brown,
Michael D. Chaleff,
Benjamin Giliberti,
Lorenzo McRae (D.C. Bar 473660),
Jeremiah M. Luongo,

Attorneys, Telecommunications & Media, Enforcement Section, 
Antitrust Division, U.S. Department of Justice, City Center 
Building, 1401 H Street, NW., Suite 8000, Washington, DC 20530, 
(202) 514-5621, Facsimile: (202) 514-6381.

State of Connecticut

Richard Blumenthal,

Attorney General.

Michael E. Cole,

Assistant Attorney General, Department Head/Antitrust Department, 
Federal bar No. ct20115.

 /s/-------------------------------------------------------------------

Rachel O. Davis,

Assistant Attorney General, Antitrust Department, Federal bar No. 
ct07411, DC Bar No. 413157 (inactive), 55 Elm Street, Hartford, 
Connecticut 06106, Tel: (860) 808-5041, Fax: (860) 808-5033.

For Plaintiff State of Texas

Greg Abbott,

Attorney General of Texas.

Barry R. McBee,

First Assistant Attorney General.

Edward D. Burbach,

Deputy Attorney General for Litigation.

Mark Tobey,

Assistant Attorney General, Chief, Antitrust & Civil Medicaid Fraud 
Division.

Rebecca Fisher,

Assistant Attorney General, Chief, Antitrust Section.

 /s/-------------------------------------------------------------------

John T. Prud'homme, Jr.,

Assistant Attorney General, TX Bar No. 24000322, Office of the 
Attorney General, P.O. Box 12548, Austin, Texas 78711-2548, 512/936-
1697, 512/320-0975 (Facsimile).

    Signature by the State of Texas on Complaint in United States of 
America, State of Connecticut and State of Texas v. Cingular 
Wireless Corporation, SBC Communications Inc., BellSouth Corporation 
and AT&T Wireless Services, Inc.

Appendix A--Herfindahl-Hirschman Index

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly 
accepted measure of market concentration. It is calculated by 
squaring the market share of each firm competing in the market and 
then summing the resulting numbers. For example, for a market 
consisting of four firms with shares of 30, 30, 20, and 20 percent, 
the HHI is 2600 (30\2\ + 30\2\ + 20\2\ + 20\2\ = 2600). (Note: 
Throughout the Complaint, market share percentages have been rounded 
to the nearest whole number, but HHIs have been estimated using 
unrounded percentages in order to accurately reflect the 
concentration of the various markets.) The HHI takes into account 
the relative size distribution of the firms in a market and 
approaches zero when a market consists of a large number of small 
firms. The HHI increases both as the number of firms in the market 
decreases and as the disparity in size between those firms 
increases.
    Markets in which the HHI is between 1000 and 1800 points are 
considered to be moderately concentrated, and those in which the HHI 
is in excess of 1800 points are considered to be highly 
concentrated. See Horizontal Merger Guidelines ]1.51 (revised Apr. 
8, 1997). Transactions that increase the HHI by more than 100 points 
in concentrated markets presumptively raise antitrust concerns under 
the guidelines issued by the U.S. Department of Justice and Federal 
Trade Commission. See id.

In the United States District Court for the District of Columbia

United States of America, State of Connecticut and State of Texas, 
Plaintiffs, v. Cingular Wireless Corporation, SBC Communications Inc., 
Bellsouth Corporation and AT&T Wireless Services, Inc., Defendants; 
Preservation of Assets Stipulation and Order

    Civil No.: 1:04CV01850 (RBW)
    Filed: 10/25/04
    It is hereby stipulated and agreed by and between the undersigned 
parties, subject to approval and entry by the Court, that:

I. Definitions

    As used in this Preservation of Assets Stipulation and Order:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom defendants divest the Divestiture Assets.
    B. ``AT&T Wireless'' means defendant AT&T Wireless Services, Inc., 
a Delaware corporation with headquarters in Redmond, Washington, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``BellSouth'' means defendant BellSouth Corporation, a Georgia 
corporation with headquarters in Atlanta, Georgia, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    D. ``Cingular'' means defendant Cingular Wireless Corporation, a 
Delaware corporation with headquarters in Atlanta, Georgia, and 
Cingular Wireless LLC, a Delaware limited liability company formed as a 
joint venture between SBC and BellSouth, with headquarters in Atlanta, 
Georgia, their successors and assigns, and their subsidiaries, 
divisions, groups, affiliates, partnerships and joint

[[Page 65650]]

ventures, and their directors, officers, managers, agents, and 
employees.
    E. ``Divestiture Assets'' means Wireless Business Divestiture 
Assets, Spectrum License Divestiture Assets, and Minority Interests, 
including any direct or indirect financial ownership or leasehold 
interests and any direct or indirect role in management or 
participation in control therein.
    F. ``Minority Interests'' means the equity interests owned by any 
defendant in the following entities that are the licensees or operators 
of wireless mobile telephone businesses in the specified Metropolitan 
Statistical Areas (``MSAs'') and Rural Statistical Areas (``RSAs'') 
(collectively, Cellular Marketing Areas (``CMAs'')) used to define 
cellular license areas by the Federal Communications Commission 
(``FCC''):

    (1) Alltel Communications of North Louisiana Cellular Limited 
Partnership, covering the Shreveport, Louisiana MSA (CMA 100), Monroe, 
Louisiana MSA (CMA 219), Louisiana RSA-1 (CMA 454), Louisiana RSA-2 
(CMA 455) and Louisiana RSA-3 (CMA 456);
    Athens Cellular Inc., covering the Athens, Georgia MSA (CMA 234);
    (3) CellTelCo, covering the St. Joseph, Missouri MSA (CMA 275);
    (4) Pittsfield Cellular Telephone Co., covering the Pittsfield, 
Massachusetts MSA (CMA 213); and
    (5) Topeka Cellular Telephone Co., Inc., covering the Topeka, 
Kansas MSA (CMA 179).

As an alternative to the divestiture of the Alltel Communications of 
North Louisiana Cellular Limited Partnership, CellTelCo, and Topeka 
Cellular Telephone Co., Inc. Minority Interests as required by Section 
IV of the proposed Final Judgment, defendants may request, at least 20 
days prior to consummation of the Transaction, approval from plaintiff 
United States to retain such interests. Plaintiff United States in its 
sole discretion may approve this request if it is demonstrated that the 
retained minority interest will become irrevocably and entirely 
passive, so long as defendants own the minority interests, and will not 
significantly diminish competition.
    G. ``Multi-line Business Customer'' means a corporate or business 
customer that contracts with AT&T Wireless for mobile wireless services 
to provide multiple telephones to its employees or members whose 
services are provided pursuant to the contract with the corporate or 
business customer.
    H. ``SBC'' means defendant SBC Communications, Inc., a Delaware 
corporation with its headquarters in San Antonio, Texas, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    I. ``Skagit'' means Skagit Wireless LLC, an Oregon corporation with 
headquarters in Portland, Oregon, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    J. ``Spectrum License Divestiture Assets'' means a license for 10 
MHz of contiguous PCS spectrum in the specified MSAs and Basic Trading 
Areas (``BTA'') used to define cellular and PCS license areas by the 
FCC:
    (1) The Dallas-Fort Worth, Texas MSA (CMA 009);
    (2) The Detroit, Michigan BTA (BTA 112), provided that the license 
to be transferred does not include any PCS spectrum in Monroe and 
Sanilac counties; and
    (3) The Knoxville, Tennessee BTA (BTA 232), provided that as an 
alternative to the divestiture of a license for 10 MHz of contiguous 
PCS spectrum as required by Section IV of the proposed Final Judgment, 
defendants, with the approval of plaintiff United States in its sole 
discretion, can restructure AT&T Wireless's existing relationship with 
Skagit such that (i) defendants have no equity or leasehold interest 
in, hold no debt of, and have no managerial or operational interest in 
Skagit's PCS license in the Knoxville Tennessee BTA, and (ii) Skagit's 
PCS license in the Knoxville Tennessee BTA is contractually committed 
to be used in a manner that resolves the competitive concerns alleged 
by plaintiffs in the Complaint.
    K. ``Transaction'' means the Agreement and Plan of Merger By and 
Among AT&T Wireless Services, Inc., Cingular Wireless Corporation, 
Cingular Wireless LLC, Links I Corporation, SBC Communications Inc., 
and Bell South Corporation, dated February 17, 2004.
    L. ``Wireless Business Divestiture Assets'' means, for each mobile 
wireless business to be divested under the proposed Final Judgment, all 
types of assets, tangible and intangible, used by defendants in the 
operation of the mobile wireless businesses to be divested (including 
the provision of long distance telecommunications services for wireless 
calls). ``Wireless Business Divestiture Assets'' shall be construed 
broadly to accomplish the complete divestitures of the entire business 
of AT&T Wireless in each of the following MSA and RSA license areas as 
required by the proposed Final Judgment and to ensure that the divested 
mobile wireless businesses remain viable, ongoing businesses:
    (a) Oklahoma City, Oklahoma MSA (CMA 045);
    (b) Connecticut RSA-1 (CMA 357), provided that defendants may 
retain 10 MHz of AT&T Wireless's PCS spectrum, provided that 10 MHz of 
contiguous PCS spectrum throughout the RSA is divested to the Acquirer;
    (c) Kentucky RSA-1 (CMA 443), provided that defendants may retain 
15 MHz of AT&T Wireless's PCS spectrum in Fulton country and 10 MHz of 
AT&T Wireless's PCS spectrum in the other counties contained within the 
RSA, provided that 30 MHz of contiguous PCS spectrum in Fulton county 
and 20 MHz of contiguous PCS spectrum in the other counties contained 
in the RSA is divested to an Acquirer;
    (d) Oklahoma RSA-3 (CMA 598); and
    (e) Texas RSA-11 (CMA 662), provided that defendants may retain in 
Sabine County, 25 MHz of AT&T Wireless's PCS spectrum, and in Angelina, 
Nacogdoches, and San Augustine counties, defendants may retain 20 MHz 
of AT&T Wireless's PCS spectrum, provided that 10 MHz of contiguous PCS 
spectrum throughout the RSA is divested to an Acquirer.
    Wireless Business Divestiture Assets shall include, without 
limitation, all types of real and personal property, monies and 
financial instruments, equipment, inventory, office furniture, fixed 
assets and furnishings, supplies and materials, contracts, agreements, 
leases, commitments, spectrum licenses issued by the FCC and all other 
licenses, permits and authorizations, operational support systems, cell 
sites, network infrastructure, switches, customer support and billing 
systems, interfaces with other service providers, business and customer 
records and information, customer contracts, customer lists, credit 
records, accounts, and historic and current business plans which relate 
primarily to the wireless business being divested, as well as any 
patents, licenses, sub-licenses, trade secrets, know-how, drawings, 
blueprints, designs, technical and quality specifications and 
protocols, quality assurance and control procedures, manuals and other 
technical information defendants supply to their own employees, 
customers, suppliers, agents, or licenses, and trademarks, trade names 
and service marks or other intellectual property, including all 
intellectual property rights under third-party licenses that are 
capable of being transferred to an Acquirer either in their entirety, 
for assets described in (1) below, or through a license obtained 
through or from the divesting defendant,

[[Page 65651]]

for assets described in (2) below; provided that defendants shall only 
be required to divest Multi-line Business Customer contracts, if 50 
percent or more of the Multi-line Business Customer's subscribers 
reside or work within any of the five (5) license areas described 
herein, and further, any subscribers who obtain mobile wireless 
services through any such contract retained by defendants and who are 
located within the five (5) geographic areas identified above, shall be 
given the option to terminate their relationship with defendants, 
without financial cost, within one year of the closing of the 
Transaction. Defendants shall provide written notice to these 
subscribers within 45 days after the closing of the Transaction.
    These divestitures of the Wireless Business Divestiture Assets as 
defined in Section II.L shall be accomplished by:
    (1) Transferring to the Acquirer(s) the complete ownership and/or 
other rights to the assets (other than those assets used substantially 
in the operations of AT&T Wireless's overall wireless business which 
must be retained to continue the existing operations of the wireless 
properties that defendants are not required to divest, and that either 
are not capable of being divided between the divested wireless 
businesses and those not divested, or are assets that the defendants 
and the Acquirer(s) agree, subject to approval of plaintiff United 
States upon consultation with any relevant plaintiff state, shall not 
be divided); and
    (2) Granting to the Acquirer(s) an option to obtain a non-
exclusive, transferable license from defendants for a reasonable 
period, subject to approval of plaintiff United States upon 
consultation with any relevant plaintiff state, at the election of an 
Acquirer to use any of AT&T Wireless's retained assets under paragraph 
(1) above, used in the operation of the wireless business being 
divested, so as to enable the Acquirer to continue to operate the 
divested wireless business without impairment. Defendants shall 
identify in a schedule submitted to plaintiffs and filed with the 
Court, as expeditiously as possible following the filing of the 
Complaint and in any event prior to any divestitures and before the 
approval by the Court of the proposed Final Judgment, any intellectual 
property rights under third-party licenses that are used by the 
wireless businesses being divested but that defendants could not 
transfer to an Acquirer entirely or by license without third-party 
consent, and the specific reasons why such consent is necessary and how 
such consent would be obtained for each asset.

II. Objectives

    The Final Judgment filed in this case is meant to ensure 
defendants' prompt divestiture of the Divestiture Assets for the 
purpose of preserving viable competitors in the provision of mobile 
wireless services in order to remedy the effects that plaintiffs allege 
would otherwise result from Cingular's acquisition of AT&T Wireless. 
This Preservation of Assets Stipulation and Order ensures, prior to 
such divestitures, that competition is maintained during the pendency 
of the ordered divestitures, and that the Wireless Business Divestiture 
Assets remain an ongoing business concern and the Divestiture Assets 
remain economically viable. The Divestiture Assets will remain, as 
provided herein, preserved, independent and uninfluenced by defendants.

III. Jurisdiction and Venue

    This Court has jurisdiction over the subject matter of this action 
and each of the parties hereto, and venue of this action is proper in 
the United States District Court for the District of Columbia. The 
Complaint states a claim upon which relief may be granted against 
defendants under Section 7 of the Clayton Act, 15 U.S.C. 18.

IV. Compliance With and Entry of Final Judgment

    A. The parties stipulate that a proposed Final Judgment in the form 
attached hereto as Exhibit A may be filed with and entered by the 
Court, upon the motion of any party or upon the Court's own motion, at 
any time after compliance with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, and without further notice 
to any party or other proceedings, provided that no plaintiff has 
withdrawn its consent, which it may do at any time before the entry of 
the proposed Final Judgment by serving notice thereof on defendants and 
other plaintiffs and by filing that notice with the Court.
    B. Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment, pending the Judgment's entry by the Court, or 
until expiration of time for all appeals of any Court ruling declining 
entry of the proposed Final Judgment, and shall, from the date of the 
signing of this Stipulation by the parties, comply with all the terms 
and provisions of the proposed Final Judgment as though the same were 
in full force and effect as an order of the Court.
    C. Defendants shall not consummate the transaction sought to be 
enjoined by the Complaint herein before the Court has signed this 
Preservation of Assets Stipulation and Order.
    D. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    E. In the event (1) any plaintiff has withdrawn its consent, as 
provided in Section IV.A above, or (2) the proposed Final Judgment is 
not entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court declining entry of the proposed Final Judgment, 
and the Court has not otherwise ordered continued compliance with the 
terms and provisions of the proposed Final Judgment, then the parties 
are released from all further obligations under this Stipulation, and 
the making of this Stipulation shall be without prejudice to any party 
in this or any other proceeding.
    F. Defendants represent that the divestitures ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of mistake, hardship or difficulty of compliance 
as grounds for asking the Court to modify any of the provisions 
contained therein.

V. Management Trustee

    A. Plaintiff United States nominates Joseph J. Simons as Management 
Trustee in this case. The plaintiff states consent to, and defendants 
have no objection to, his immediate appointment by this Court. 
Accordingly, this Court appoints Joseph J. Simons as Management Trustee 
to serve as manager of the Divestiture Assets until the Divestiture 
Assets are sold or transferred to a Divestiture Trustee pursuant to 
Section V of the proposed Final Judgment. Nothing in this Stipulation 
shall be interpreted to prevent the Management Trustee from becoming 
the Divestiture Trustee pursuant to Section V of the proposed Final 
Judgment.
    B. Within five (5) business days of the entry of this Stipulation 
by the Court, defendants shall enter into a trust agreement with Mr. 
Simons subject to the approval of plaintiff United States in its sole 
discretion upon consultation with plaintiff states, that will grant the 
rights, powers, and authorities necessary to permit him to perform the 
duties and responsibilities of the Management Trustee pursuant to this 
Stipulation. The trust agreement shall enable him to assume all rights, 
powers, and authorities necessary to perform his duties and 
responsibilities, pursuant to this Stipulation and the proposed Final 
Judgment and consistent with their

[[Page 65652]]

purposes. Mr. Simons or any other subsequently appointed Management 
Trustee shall serve at the cost and expense of defendants, on such 
terms and conditions as plaintiff United States approves upon 
consultation with plaintiff states, with a fee arrangement that is 
reasonable in light of the person's experience and responsibilities.
    C. The Management Trustee will have the following powers and 
responsibilities with respect to the Divestiture Assets:
    (1) The Management Trustee will have the power to manage the 
Divestiture Assets in the ordinary course of business consistent with 
this Stipulation. Only with the prior written approval of plaintiff 
United States upon consultation with plaintiff states, may the 
Management Trustee make any decision, take any action, or enter any 
transaction that is outside the ordinary course of business;
    (2) The Management Trustee shall have a duty to, consistent with 
the terms of this Stipulation and the proposed Final Judgment, monitor 
the organization of the Divestiture Assets; manage the Divestiture 
Assets in order to maximize their value so as to permit expeditious 
divestitures in a manner consistent with the proposed Final Judgment; 
maintain the independence of the Divestiture Assets from defendants; 
control and operate the Wireless Business Divestiture Assets to ensure 
that the Wireless Business Divestiture Assets remain an independent, 
ongoing, economically viable competitor to the other mobile wireless 
services providers; and assure defendants' compliance with their 
obligations pursuant to this Stipulation and the proposed Final 
Judgment;
    (3) The Management Trustee shall have the authority to employ, at 
the cost and expense of defendants, such consultants, accountants, 
attorneys, and other representatives and assistants as are reasonably 
necessary to carry out the Management Trustee's duties and 
responsibilities;
    (4) The Management Trustee and any consultants, accountants, 
attorneys, and any other persons retained by the Management Trustee, 
shall have full and complete access to all personnel, books, records, 
documents, and facilities of the Divestiture Assets or to any other 
relevant information as the Management Trustee may reasonably request, 
including, but not limited to, all documents and records kept in the 
normal course of business that relate to the Divestiture Assets. 
Defendants shall develop such financial or other information as the 
Management Trustee may request and shall cooperate with the Management 
Trustee. Defendants shall take no action to interfere with or impede 
the Management Trustee's ability to monitor defendants' compliance with 
this Stipulation and the proposed Final Judgment or otherwise to 
perform his duties and responsibilities consistent with the terms of 
this Stipulation and the proposed Final Judgment;
    (5) The Management Trustee will ensure that the Divestiture Assets 
shall be staffed with sufficient employees to maintain their viability 
and competitiveness. To the extent that any employees whose principal 
responsibilities related to the Divestiture Assets leave or have left 
the Divestiture Assets prior to divestiture of the Divestiture Assets, 
the Management Trustee may replace departing or departed employees with 
persons who have similar experience and expertise or determine not to 
replace such departing or departed employees; and
    (6) Thirty (30) days after the Management Trustee has been 
appointed by the Court, and every thirty (30) days thereafter until the 
Divestiture Assets are either transferred to an Acquirer or to the 
Divestiture Trustee, the Management Trustee shall report in writing to 
the plaintiffs concerning the efforts to accomplish the purposes of 
this Stipulation and the proposed Final Judgment. Included within that 
report shall be the Management Trustee's assessment of the extent to 
which the Divestiture Assets are meeing (or exceeding) their projected 
goals as are reflected in existing or revised operating plans, budgets, 
projections or any other regularly prepared financial statements and 
the extent to which defendants are fulfilling their responsibilities 
under this Stipulation and the proposed Final Judgment.
    D. The following limitations shall apply to the Management Trustee:
    (1) The Management Trustee shall not be involved, in any way, in 
the operations of the other businesses of defendants;
    (2) The Management Trustee shall have no financial interests 
affected by defendants' revenues, profits or profit margins, except 
that the Management Trustee's compensation for managing the Divestiture 
Assets may include economic incentives dependent on the financial 
performance of the Divestiture Assets provided that those incentives 
are consistent with the objectives of this Stipulation and the proposed 
Final Judgment and are approved by plaintiff United States upon 
consultation with plaintiffs states; and
    (3) The Management Trustee shall be prohibited from performing any 
further work for defendants for two (2) years after the close of the 
divestiture transactions.
    E. Defendants and the Management Trustee will take all reasonable 
efforts to preserve the confidentiality of information that is material 
to the operation of either the Divestiture Assets or defendants' 
businesses. Defendants' personnel supplying services to the Divestiture 
Assets pursuant to this Stipulation must retain and maintain the 
confidentiality of any and all confidential information material to the 
Divestiture Assets. Except as permitted by this Stipulation and the 
proposed Final Judgment, such persons shall be prohibited from 
providing, discussing, exchanging, circulating or otherwise furnishing 
the confidential information of the Divestiture Assets to or with any 
person whose employment involves any of defendants' businesses, except 
as necessary to fulfill the purposes of this Stipulation and the 
proposed Final Judgment.
    F. If in the judgment of the Management Trustee, defendants fail to 
provide the services listed in Section VI of this Stipulation to the 
satisfaction of the Management Trustee, upon notification to defendants 
and approval by plaintiff United States upon consultation with 
plaintiff states, the Management Trustee may engage third parties 
unaffiliated with the defendants to provide those services for the 
Divestiture Assets, at the cost and expense of defendants, provided 
that defendants may have reasonable access to information to satisfy 
themselves that after the services have been provided, the Divestiture 
Assets are in compliance with all applicable laws, rules, and 
regulations.
    G. At the option of the Management Trustee, defendants may also 
provide other products and services, on an arms-length basis provided 
that the Management Trustee is not obligated to obtain any other 
product or service from defendants and may acquire any such products or 
services from third parties unaffiliated with defendants.
    H. If the Management Trustee ceases to act or fails to act 
diligently and consistently with the purposes of this Stipulation and 
the proposed Final Judgment, if the Management Trustee proposed by 
plaintiff United States is not approved by this Court or resigns, or if 
for any other reason the Management Trustee ceases to serve in his or 
her capacity as Management Trustee, the United States may select upon 
consultation with any relevant plaintiff state, a substitute Management 
Trustee. In this event, plaintiff United States will

[[Page 65653]]

identify to defendants the individual or entity it proposes to select 
as Management Trustee. Defendants must make any such objection to this 
selection within five (5) business days after plaintiff United States 
notifies defendants of the Management Trustee's selection. Upon 
application of the United States, the Court shall approve and appoint a 
substitute Management Trustee. Within five (5) business days of such 
appointment, defendants shall enter into a trust agreement with the 
Management Trustee subject to the approval of plaintiff United States 
in its sole discretion upon consultation with plaintiff states, as 
described in Section V.B of this Stipulation.

VI. Preservation of Assets

    Until the divestitures required by the proposed Final Judgment have 
been accomplished, except as otherwise approved in advance in writing 
by plaintiff United States upon consultation with plaintiff states:
    A. Defendants and the Management Trustee shall preserve, maintain, 
and continue to support the Divestiture Assets, take all steps 
necessary to manage the Divestiture Assets in order to maximize their 
revenue, profitability and viability so to permit expeditious 
divestitures in a manner consistent with this Stipulation and the 
proposed Final Judgment.
    B. The Wireless Business Divestiture Assets shall be operated by 
the Management Trustee as part of an independent, ongoing, economically 
viable competitive business to other mobile wireless services providers 
operating in the same license area. Defendants and the Management 
Trustee shall take all steps necessary to ensure that:
    (1) The management, sales, and operations of the Wireless Business 
Divestiture Assets are independent from defendants' other operations; 
provided at the request of the Management Trustee, defendants shall 
include the marketing, pricing and sales of the mobile wireless 
services generated by the Wireless Business Divestiture Assets in the 
license areas served by the Wireless Business Divestiture Assets within 
its marketing, promotional, and service offerings, in the ordinary 
course of business, in any national, regional, and local marketing 
programs. Nothing in this Section shall prohibit the Management Trustee 
from developing his own reasonable marketing, sales, pricing or 
promotional offers, which shall be funded and supported by defendants;
    (2) The Wireless Business Divestiture Assets are maintained by 
adhering to normal and planned repair, capital improvement, upgrade and 
maintenance schedules;
    (3) The management of the Wireless Business Divestiture Assets will 
not be influenced by defendants;
    (4) The books, records, competitively sensitive sales, marketing 
and pricing information, and decision-making concerning marketing, 
pricing or sales of mobile wireless services generated by the Wireless 
Business Divestiture Assets will be kept separate and apart from 
defendants' other operations; and
    (5) The management of the Wireless Business Divestiture Assets acts 
to maintain and increase the sales and revenues of the mobile wireless 
services generated by the Wireless Business Divestiture Assets, and 
maintain at previously approved levels for 2004 and 2005, whichever are 
higher, all promotional, advertising, sales, marketing, and technical 
support for the Wireless Business Divestiture Assets.
    C. The management of the Spectrum License Divestiture Assets and 
the Minority Interests shall be held entirely separate, distinct, and 
apart from those of defendants' other operations.
    D. Defendants shall provide sufficient working capital and lines 
and sources of credit as deemed necessary by the Management Trustee to 
continue to maintain the Divestiture Assets consistent with this 
Stipulation.
    E. Except (1) as recommended by the Management Trustee and approved 
by plaintiff United States upon consultation with plaintiff states, or 
(2) as part of a divestiture approved by plaintiff United States upon 
consultation with any relevant plaintiff state, in accordance with the 
terms of the proposed Final Judgment, defendants shall not remove, 
sell, lease, assign, transfer, pledge or otherwise dispose of any of 
the Divestiture Assets outside the ordinary course of business.
    F. The Management Trustee, with defendants' cooperation consistent 
with this Stipulation and the proposed Final Judgment, shall maintain, 
in accordance with sound accounting principles, separate, accurate, and 
complete financial ledgers, books and records that report on a periodic 
basis, such as the last business day of every month, consistent with 
past practices, the assets, liabilities, expenses, revenues, and income 
of the Divestiture Assets.
    G. Defendants shall take no action that would jeopardize, delay, or 
impede the sale of the Divestiture Assets nor shall defendants take any 
action that would interfere with the ability of any Divestiture Trustee 
appointed pursuant to the proposed Final Judgment to operate and manage 
the Divestiture Assets or to complete the divestitures pursuant to the 
proposed Final Judgment to an Acquirer(s) acceptable to plaintiff 
United States.
    H. Upon the filing of the Complaint in the action, defendants shall 
appoint sufficient employees for each of the Wireless Business 
Divestiture Assets, who are familiar with and have had responsibility 
for the management, operation, marketing, and sales of the Divestiture 
Assets, to assist the Management Trustee with his duties and 
responsibilities hereunder.
    I. Except for employees (1) whose primary employment 
responsibilities relate to the Divestiture Assets, or (2) who are 
involved in providing support services to the Divestiture Assets 
pursuant to Sections V and VI of this Stipulation and Section V of the 
proposed Final Judgment, defendants shall not permit any other of their 
employees, officers, or directors to be involved in the operations of 
the Divestiture Assets.
    J. Except as required by law in the course of (1) complying with 
this Stipulation and the proposed Final Judgment; (2) overseeing 
compliance with policies and standards concerning the safety, health, 
and environmental aspects of the operations of the Divestiture Assets 
and the integrity of their financial controls; (3) defending legal 
claims, investigations or enforcement actions threatened or brought 
against the Divestiture Assets; or (4) obtaining legal advice, 
defendants' employees (excluding employees (a) whose primary employment 
responsibilities relate to the Divestiture Assets, or (b) who are 
involved in providing support services to the Divestiture Assets 
pursuant to Sections V and VI of this Stipulation and Sections V of the 
proposed Final Judgment) shall not receive, or have access to, or use 
any material confidential information, not in the public domain, of the 
Divestiture Assets. Defendants may receive aggregate financial 
information relating to the Divestiture Assets to the extent necessary 
to allow defendants to prepare the defendants' consolidated financial 
reports, tax returns, reports required by securities laws, and 
personnel reports. Any such information that is obtained pursuant to 
this subparagraph shall be used only for the purposes set forth in this 
subparagraph.
    K. Defendants may offer a bonus or severance to employees whose 
primary employment responsibilities relate to the Divestiture Assets, 
that continue their employment until divestiture (in addition to any 
other bonus or

[[Page 65654]]

severance to which the employees would otherwise be entitled).
    L. Until the Divestiture Assets are divested to an Acquirer(s) 
acceptable to plaintiff United States upon consultation with any 
relevant plaintiff state, defendants shall provide to the Divestiture 
Assets, at no cost, support services needed to maintain the Divestiture 
Assets in the ordinary course of business, including but not limited 
to:
    (1) Federal and state regulatory policy development and compliance;
    (2) Human resources administrative services;
    (3) Environmental, health and safety services, and developing 
corporate policies and ensuring compliance with federal and state 
regulations and corporate policies;
    (4) Preparation of tax returns;
    (5) Financial accounting and reporting services;
    (6) Audit services;
    (7) Legal services;
    (8) Routine network maintenance, repair, improvements, and 
upgrades;
    (9) Switching, call completion, and other services necessary to 
allow subscribers to use mobile wireless services and complete calls; 
and
    (10) Billing, customer care and customer service related functions 
necessary to maintain the subscriber account and relationship.
    M. Within twenty (20) days after the filing of the Complaint, 
defendants will notify plaintiff United States and plaintiff states in 
writing of the steps defendants have taken to comply with this Section.
    N. This Preservation of Assets Stipulation and Order shall remain 
in effect until consummation of the divestitures required by the 
proposed Final Judgment or until further order of the Court.

Dated: October 25, 2004
     Respectfully submitted,

For Plaintiff United States

 /s/-------------------------------------------------------------------
Hillary B. Burchuk (D.C. Bar  366755),
Matthew C. Hammond,

Attorneys, Telecommunications & Media, Enforcement Section, 
Antitrust Division, U.S. Department of Justice, City Center 
Building, 1401 H Street, NW., Suite 8000, Washington, DC 20530, 
(202) 514-5621, Facsimile: (202) 514-6381.

State of Connecticut

Richard Blumenthal,
Attorney General.

Michael E. Cole,
Assistant Attorney General, Department Head/Antitrust Department, 
Federal bar No. ct20115.
 /s/-------------------------------------------------------------------
Rachel O. Davis,
Assistant Attorney General, Antitrust Department, Federal bar No. 
ct07411, DC Bar No. 413157 (inactive), 55 Elm Street, Hartford, 
Connecticut 06106, Tel: (860) 808-5041, Fax: (860) 808-5033.

For Plaintiff State of Texas

Greg Abbott,

Attorney General of Texas.

Barry R. McBee,

First Assistant Attorney General

Edward D. Burbach,

Deputy Attorney General for Litigation.

Mark Tobey,

 /s/-------------------------------------------------------------------
Assistant Attorney General, Chief, Antitrust & Civil Medicaid Fraud 
Division.

Rebecca Fisher,

 /s/-------------------------------------------------------------------
Assistant Attorney General, Chief, Antitrust Section.

 /s/-------------------------------------------------------------------
John T. Prud'Homme, Jr.,

Assistant Attorney General, TX Bar No. 24000322, Office of the 
Attorney General, P.O. Box 12548, Austin, Texas 78711-2548, 512/936-
1697 512/320-0975 (Facsimile).

    Signature by the State of Texas on Preservation of Assets 
Stipulation and Order in United States of America, State of 
Connecticut and State of Texas v. Cingular Wireless Corporation, SBC 
Communications Inc., BellSouth Corporation and AT&T Wireless 
Services Inc.

For Defendants Cingular Wireless Corporation and SBC Communications 
Inc.

 /s/-------------------------------------------------------------------

Richard L. Rosen (D.C. Bar  307231),

Arnold & Porter LLP, 555 12th Street, NW., Washington, DC 20004, 
(202) 942-5000.

For Defendants Cingular Wireless Corporation and BellSouth Corporation

 /s/-------------------------------------------------------------------

Stephen M. Axinn, Esq. (D.C. Bar  478335),

Axinn, Veltrop & Harkrider LLP, 1801 K Street, NW., Washington, DC 
20006, (202) 912-4700.

For Defendant AT&T Wireless Services, Inc.

 /s/-------------------------------------------------------------------

Ilene Knable Gotts (D.C. Bar  384740),

Wachtell, Lipton, Rosen & Katz, 51 W. 52nd Street, New York, NY 
10019, (212) 403-1247.

Order

    It is so ordered by the Court, this ---- day of ----------, 
2004.

 /s/-------------------------------------------------------------------

United States District Judge

[FR Doc. 04-25323 Filed 11-12-04; 8:45 am]
BILLING CODE 4410-11-M