Responding to request for information from FCC International Bure...

Responding to request for information from FCC International Bureau, Deutsche Telekom (DT) and VoiceStream emphasized there’s “no substantial possibility” that Germany’s competitive or regulatory environment “could harm competition” in U.S. “There is nothing in the record to demonstrate that the merged company could engage in anticompetitive cross-subsidization or predation.” In connection with proposed merger of Germany’s DT, VoiceStream and Powertel, International Bureau Chief Donald Abelson sent list of 23 questions to DT and VoiceStream earlier this month. Questions included percentage of business and residential loops in Germany controlled by DT, how foreign holdings of DT were treated for regulatory purposes and whether govt. shareholders were bound to vote with majority of other owners. Bureau also asked about separate $5 billion investment that DT made in VoiceStream in advance of merger’s closing. Companies replied Germany doesn’t regulate DT’s foreign operations, including U.S. affiliates. They said carriers had several options for bypassing DT facilities when bringing traffic into Germany from European countries where there are landing stations for U.S.-Europe undersea cables: Carriers can route traffic to any point in Germany without using DT facilities. Variety of alternatives “makes clear that no bottleneck exists for international services in Germany,” companies said. Answers also addressed concerns raised by Sen. Hollings (D-S.C.) that $5 billion investment by DT amounted to 39% of VoiceStream’s capital stock. Hollings has contended DT’s current stake in VoiceStream should be assessed, based on Commission precedent, by comparing DT’s investment with VoiceStream’s total “paid-in capital.” Companies said: “This argument is simply wrong.” They said Hollings misinterpreted past decisions of FCC in determining amount of “alien beneficial ownership.” One of cases cited as precedent is FCC order granting Fox TV stations permanent waiver of 25% limit on alien ownership of stations based on ownership of Australia-based News Corp. Unlike transactions at stake in Fox and NextWave cases, companies told bureau “share ownership is the only accurate means to evaluate alien beneficial ownership of VoiceStream.” Paid-in capital analysis would “greatly overstate” actual amount of alien beneficial ownership, companies said.