United States v. Commscope, Inc. and Andrew Corporation;, 72376-72388 [07-6125]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 72, Number 244 (Thursday, December 20, 2007)]
[Notices]
[Pages 72376-72388]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-6125]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Commscope, Inc. and Andrew Corporation;

Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Hold Separate Stipulation and Order, and Competitive Impact Statement 
have been filed with the United States District Court for the District 
of Columbia in United States of America v. CommScope. Inc. and Andrew 
Corporation, Civil Action No. 07-02200. On December 6, 2007, the United 
States filed a Complaint alleging that the proposed acquisition by 
CommScope, Inc. (``CommScope'') of Andrew Corporation (``Andrew'') 
would violate section 7 and section 8 of the Clayton Act, 15 U.S.C. 18, 
19 by substantially lessening competition in the United States market 
for drop cable and creating interlocking directorates between competing 
companies. The proposed Final Judgment, filed the same time as the 
Complaint, requires the divestiture of: (a) Andrew's entire stock 
ownership in Andes Industries, Inc. (``Andes''); (b) all notes of 
indebtedness in favor of Andrew by Andes; (c) all warrants to acquire 
additional stock of Andes; and (d) intellectual property relating to 
the ``Z-Wire'' product sold by Andes' subsidiary PCT International, 
Inc. A Competitive Impact Statement filed by the United States 
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, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 325 7th Street, 
NW., Suite 215, Washington, DC 20530 (telephone: 202-514-2481), on the 
Department of Justice's Web site at https://www.usdoj.gov/atr. and at 
the Office of the Clerk of the United States 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 the Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Nancy Goodman, Chief, Telecommunications and Media Enforcement 
Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, 
NW., Suite 8000, Washington, DC 20530 (telephone: 202-514-5621).

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

United States District Court for the District of Columbia

    United States of America, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, NW., Suite 8000, Washington, DC 20530, 
Plaintiff, v. CommScope, Inc., 1100 CommScope Place, SE., Hickory, 
North Carolina 28603 and Andrew Corporation, 3 Westbrook Corporate 
Center, Suite 900, Westchester, IL 60154, Defendants.

Case No.1 :07-cv-02200.
Assigned To: Lamberth, Royce C. Assign Date: 12/6/2007.
Description: Antitrust.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to enjoin the proposed acquisition of Andrew Corporation 
(``Andrew'') by CommScope, Inc. (``CommScope'') and alleges as follows:
    1. CommScope is a large manufacturer of wire and cable products 
used by, among others, telecommunications companies. CommScope is the 
leading manufacturer of drop cable in the United States, with a market 
share of approximately 60 to 70 percent. ``Drop cable'' is coaxial 
cable used by cable television providers to connect their transmission 
systems to their customers' premises and equipment inside the 
customers' premises. Drop cable sales average approximately $500 
million a year in the United States.
    2. Andrew is a global designer, manufacturer and supplier of 
communications equipment and systems. Andrew was a manufacturer of drop 
cable until it sold this business in March 2007 to Andes Industries, 
Inc. (``Andes''). Andes' subsidiary, PCT International, Inc. (``PCT''), 
is a manufacturer of broadband hardware products used with drop cable 
installations. PCT and another Andes subsidiary, PCT Broadband 
Communications (Yantai) Co. Ltd. (``PCTY''), manufacture and sell drop 
cable. As a result of two transactions between Andrew and Andes, Andrew 
holds thirty (30) percent of Andes' equity and voting shares, a warrant 
that could allow it to increase its share holdings, and several Andes' 
notes of indebtedness. Andrew also has certain

[[Page 72377]]

governance rights, including the right to appoint one of Andes' three 
board members.
    3. On June 26, 2007, defendants CommScope and Andrew entered into 
an Agreement and Plan of Merger, pursuant to which CommScope will 
acquire Andrew in an all-stock transaction valued at approximately $2.6 
billion.
    4. As a result of the proposed acquisition, CommScope will obtain a 
30 percent ownership interest in, and the right to appoint members to 
the board of directors of, one of its most significant competitors in 
the development, manufacture, and sale of drop cable. In addition, 
given its ownership of shares, warrants and debt instruments, and its 
governance rights, it will be able to exert substantial control over 
Andes. Therefore, CommScope's acquisition of Andrew would violate 
section 7 and section 8 of the Clayton Act because it would 
substantially lessen competition in the market for drop cable and would 
create interlocking directorates between competing companies.

I. Jurisdiction and Venue

    5. This action is filed by the United States under section 15 of 
the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain the 
violation by defendants of section 7 and section 8 of the Clayton Act, 
15 U.S.C. 18, 19.
    6. Defendant CommScope and defendant Andrew both manufacture and 
sell telecommunications products throughout the United States. 
Defendants are engaged in interstate commerce and in activities 
substantially affecting interstate commerce. This Court has 
jurisdiction over this action and the defendants pursuant to section 15 
of the Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 1331, 1337(a), and 
1345.
    7. Defendants transact business and are found within the District 
of Columbia. Venue is proper in the district under 15 U.S.C. 22, and 28 
U.S.C. 1391(c). Defendants acknowledge personal jurisdiction in the 
District of Columbia and consent to venue.

II. Defendants

    8. Defendant CommScope, with its headquarters in Hickory, North 
Carolina, is a corporation organized and existing under the laws of the 
state of Delaware. CommScope is a major manufacturer and provider of 
wire and cable products. For fiscal year 2006, it reported total 
revenues in excess of $1.6 billion, with $550 million coming from its 
broadband business segment, which supplies cable and hardware products 
to cable television and telecommunications companies.
    9. Defendant Andrew, with its headquarters in Westchester, 
Illinois, is a corporation organized and existing under the laws of the 
state of Delaware. Andrew is a major manufacturer and supplier of 
antenna and cable products and products for wireless communication 
systems. For fiscal year 2006, it reported total sales in excess of 
$2.1 billion, with approximately $1.3 billion coming from its antenna 
and cable business segment.
    10. Andrew holds extensive interests in, and the means to exercise 
effective control over, Andes and its subsidiaries, PCT and PCTY. 
Andrew owns shares of Andes equal to 30 percent of Andes' equity. It 
holds a warrant to purchase up to ten percent more of Andes' equity. It 
holds three notes of indebtedness issued by Andes and Andes' 
subsidiaries, in a total amount of almost $16 million. Andrew currently 
designates one member of Andes' three-member board of directors. After 
CommScope acquires Andrew, the combined firm will have the right to 
designate two members and, jointly with another Andes' shareholder, to 
select two more members of Andes' board, which will then consist of 
seven members. Andes and Andrew also have entered into an Amended and 
Restated Investor Rights Agreement (the ``IRA'') which effectively 
requires, and will continue to require, Andrew's approval for a wide 
range of Andes' corporate actions.

III. Violation of Section 7 of the Clayton Act: Acquisition 
Substantially Lessening Competition

A. Relevant Product Market
    11. Drop cable is 75 ohm coaxial cable used by cable television 
companies to connect their transmission systems with their customers' 
premises and equipment inside the customers' premises. Drop cable 
consists of a plastic jacket, metal braid and foil shielding, a 
dielectric layer, and a center conductor. Drop cable is used by cable 
television companies in three different kinds of locations: (1) In the 
air between outside poles and the exteriors of the customers' premises; 
(2) underground between buried transmission systems and the exteriors 
of the customers' premises; and (3) inside the customers' premises to 
connect the exterior cables with customer-premises devices. Drop cable 
strung between outside poles and the exteriors of the customers' 
premises typically contains an ultraviolet (``UV'') protectant in the 
jacket and a steel wire, called a ``messenger,'' inside the cable to 
reduce flexing; much of this aerial cable also incorporates anti-
corrosion protection for the metal shielding. Drop cable used 
underground typically is ``flooded'' with a gel compound in order to 
prevent water ingress and corrosion.
    12. No matter how it is used, all drop cable purchased by cable 
television companies is distinguished from other 75 ohm coaxial cable, 
which is usually called ``commodity'' cable. Drop cable must meet 
Society of Cable Television Engineers (``SCTE'') and other cable 
television industry standards. Those standards address, inter alia, 
durability, uniformity, electrical conduction and signal shielding. 
Signal shielding standards address the ability of the cable to prevent 
signal leakage outside the cable, as well as leakage into the cable of 
extraneous outside signals. Compliance with SCTE and other industry 
standards assures cable television companies that the drop cable they 
buy will not require frequent replacement, will fit with the other 
components of their systems, can readily be handled by a cable system's 
installers and technicians, and, most importantly, will deliver a 
strong and interference-free signal. Because it must meet SCTE and 
other industry standards, drop cable is substantially more difficult to 
manufacture than commodity cable.
    13. A small but significant increase in the price of drop cable 
would not cause cable television companies to substitute commodity 
cable so as to make such a price increase unprofitable. Cable 
television companies could not use commodity cable without: 
Substantially increasing the cost and difficulty of installing and 
servicing the cable in their systems, and seriously jeopardizing their 
relationships with their own customers because of poor signal quality. 
In addition, commodity cable typically lacks the UV and anti-corrosion 
protection, and interior messengers, usually required for aerial drop 
cable, and the flooded gel compounds typically required for underground 
drop cable.
    14. Accordingly, the development, manufacture, and sale of drop 
cable is a line of commerce and a relevant product market within the 
meaning of section 7 of the Clayton Act.
B. Geographic Market
    15. The United States is a distinct geographic market for the sale 
of drop cable. SCTE and cable televison industry standards are designed 
to meet the needs of cable television companies operating in the United 
States. Although PCTY and CommScope manufacture drop cable in China for 
sale in the United States, no foreign companies

[[Page 72378]]

make drop cable that conforms to SCTE and United States cable 
television industry standards, and no foreign companies sell drop cable 
to cable television companies in the United States. In addition, cable 
television companies in the United States require their suppliers to 
have a substantial presence within the United States, including 
distribution facilities and service infrastructures. No foreign company 
maintains such a presence for drop cable in the United States. 
Therefore, a small but significant increase in the price of drop cable 
would not cause cable television companies in the United States to 
substitute purchases from companies who operate outside the United 
States in sufficient quantities so as to make such a price increase 
unprofitable. Accordingly, the United States is a relevant geographic 
market within the meaning of section 7 of the Clayton Act, 15 U.S.C. 
18.
C. Anticompetitive Effects
    16. The proposed transaction, including CommScope's acquisition of 
Andrew's interests in Andes, would substantially lessen competition in 
the market for drop cable in the United States. The market for drop 
cable is already highly concentrated. There are only four companies 
that provide drop cable to cable television companies in the United 
States. CommScope is the leading manufacturer, with a market share of 
between 60 and 70 percent. PCT is the third largest manufacturer with 
about a four percent market share. PCT is having a significant impact 
in the market because of its low pricing and ability to offer drop 
cable with dry anti-corrosion protection.
    17. The full product lines offered by CommScope and PCT make them 
each other's closest competitors for many customers. Of the four 
manufacturers, only CommScope and PCT offer aerial drop cable in which 
a dry chemical coating is applied to the cable's braided metal shield 
to prevent corrosion of the metal. The processes by which both firms 
make products in this category--called Brightwire by CommScope and Z-
Wire by PCT--are protected by patent. Many cable television firms need 
or prefer the dry anti-corrosion protection offered by Brightwire or Z-
Wire. This is especially true for firms whose cable television systems 
are located in areas prone to metal oxidation, such as areas near sea 
coasts.
    18. Competition between PCT and CommScope in the sale of drop cable 
has benefitted consumers. The competition by PCT and its predecessor 
Andrew in the drop cable market has constrained CommScope's pricing. 
The prices charged by Andrew and PCT generally have been five to ten 
percent lower than those charged by CommScope and other competitors. 
Andrew's and later, PCT's, market share has been increasing as a 
greater number of cable television firms have approved their products 
for purchase.
    19. PCT and CommScope also compete with each other in product 
innovation. CommScope developed the first dry anti-corrosion protected 
drop cable product, Brightwire. Andrew developed Z-Wire specifically to 
compete for sales that would otherwise have gone to Brightwire. PCT and 
CommScope have continued to develop new technology in drop cable.
    20. Through the proposed acquisition of Andrew by CommScope, 
CommScope will acquire a substantial interest in, as well as 
substantial control over, one of its most significant drop cable 
competitors. In addition to holding a 30 percent interest in Andes, 
Andrew holds significant rights under the IRA to control core business 
decisions and to obtain critical confidential competitive information 
from Andes and PCT. Through the acquisition, CommScope would gain, 
among other rights, the rights to appoint Andes' board members and to 
veto important business decisions by Andes, such as issuing capital 
stock, changing executive compensation, and making certain acquisitions 
of other corporations. Post-merger, CommScope would likely have the 
ability and incentive to coordinate the activities of CommScope and 
PCT, and/or undermine PCT's ability to compete against CommScope on 
price and innovation. Such activity would likely result in a 
significant lessening of competition. This loss of competition would 
likely result in higher prices, reduced innovation, and fewer choices 
for customers.
D. Entry
    21. Successful entry into the drop cable market would not be 
timely, likely or sufficient to deter the anti-competitive effects 
resulting from this transaction. The drop cable industry has been 
characterized by firms exiting and failed entry attempts. Andrew itself 
began the process of entering the market in 1997, and only now, ten 
years later, has its successor, PCT, achieved a four percent market 
share.
    22. Timely entry sufficient to replace the market impact of PCT 
would be difficult for several reasons. Any new manufacturer would have 
to develop a product line and set up a manufacturing facility, submit 
sample products for the extensive laboratory and field tests required 
by all substantial cable television firms, and then undergo the lengthy 
process of attempting to sell the products to those companies. PCT's 
success is due in part to its ability to offer a full line of drop 
cable products. A new entrant could not duplicate that success unless 
it could offer drop cable with dry anti-corrosion protection. The 
Brightwire and Z-Wire products are both protected by patent. 
Development of a new process which does not infringe on those patents 
would likely be time-consuming and difficult.

IV. Violation of Section 8 of the Clayton Act: Interlocking 
Directorates

    23. CommScope is a corporation engaged in commerce. It 
manufactures, among other things, drop cable and, through a wholly-
owned subsidiary, hardware products associated with drop cable 
installations. Andes, through its wholly-owned subsidiaries, PCT and 
PCTY, is engaged in commerce. PCT and PCTY manufacture drop cable and 
hardware products associated with drop cable installations. Both 
CommScope and PCT sell drop cable and associated hardware products 
throughout the United States. With respect to those products, CommScope 
and PCT are, by virtue of their businesses and locations of operations, 
competitors, and the elimination of competition by agreement between 
them would constitute a violation of the antitrust laws.
    24. Both CommScope and Andes have capital, surplus and undivided 
profits in excess of $24,001,000. Both CommScope and Andes had sales in 
their last fiscal years of products in competition with products of the 
other exceeding $2,400,100. Each firm's annual competitive sales of 
these products exceeded two percent of its total sales. The annual 
competitive sales of these products by each firm also exceeded four 
percent of its total sales.
    25. Section 6 of the IRA now conveys to Andrew a right to appoint 
one member of Andes' three-member board of directors. When CommScope 
completes its acquisition of Andrew, Section 6 requires Andes' board of 
directors to be reconstituted as a new board of seven members. At that 
time section 6 will convey to Andrew, and by extension to CommScope, 
the right to designate two of the seven members of Andes' board of 
directors. In addition, Andrew, and by extension CommScope, will have 
the right to select, jointly with another Andes shareholder, two more 
members of Andes' board of directors.
    26. CommScope is a person within the meaning of section 8 of the 
Clayton Act, 15 U.S.C. 19. CommScope

[[Page 72379]]

nominates the members of its own board of directors. Its nominees, 
designees and selectees for the Andes' board stand or will stand in its 
stead for the purposes of section 8. CommScope will thus, when it 
completes its acquisition of Andrew, participate through its 
representatives both on its own board of directors and on the Andes' 
board of directors.

V. Violations Alleged

Count One

(Violation of Section 7 of the Clayton Act)

    27. Each and every allegation in paragraphs 1 through 26 of this 
Complaint is here realleged with the same force and effect as though 
said paragraphs were here set forth in full.
    28. CommScope and Andrew are hereby named as defendants on Count 
One of this complaint.
    29. The effect of the proposed acquisition by CommScope of Andrew 
may be to lessen competition substantially in the development, 
manufacture, and sale of drop cable in the United States, in violation 
of section 7 of the Clayton Act, 15 U.S.C. 18.
    30. Unless restrained, the proposed acquisition by CommScope of 
Andrew likely will have the substantial anti-competitive effects set 
forth in 16-20 above, in violation of section 7 of the Clayton Act, 15 
U.S.C. 18.
Count Two (Violation of Section 8 of the Clayton Act)
    31. Each and every allegation in paragraphs 1 through 26 of this 
Complaint is here realleged with the same force and effect as though 
said paragraphs were here set forth in full.
    32. CommScope and Andrew are hereby named as defendants on Count 
Two of this Complaint.
    33. The proposed acquisition by CommScope of Andrew, by conveying 
to CommScope rights to designate members of the board of directors of 
Andes will create interlocking directorates between competing 
corporations, in violation of section 8 of the Clayton Act, 15 U.S.C. 
19.

VI. Requested Relief

    34. Plaintiff requests:
    a. That the proposed acquisition be adjudged to violate Section 7 
and Section 8 of the Clayton Act, 15 U.S.C. 18, 19;
    b. that the defendants and all persons acting on their behalf be 
permanently enjoined and restrained from carrying out the Agreement and 
Plan of Merger dated June 26, 2007, or from entering into or carrying 
out any agreement, understanding, or plan by which CommScope would 
merge with or acquire Andrew, and that includes any ownership interests 
or governance rights in Andes;
    c. that defendants and all persons acting on their behalf be 
enjoined and restrained from violating Section 8 of the Clayton Act, 15 
U.S.C. 19.
    d. that the United States be awarded the costs of this action;
    e. that the United States be granted such other and further relief 
as the Court may deem just and proper.
Dated:
Respectfully Submitted,

For Plaintiff United States of America:

/s/--------------------------------------------------------------------
Thomas O. Barnett (D.C. Bar No. 426840)
Assistant Attorney General
Antitrust Division

/s/--------------------------------------------------------------------
J. Robert Kramer II
Director of Operations
Antitrust Division

/s/--------------------------------------------------------------------
Nancy M. Goodman (D.C. Bar No. 251694)
Chief, Telecommunications & Media
Enforcement Section
Antitrust Division

/s/--------------------------------------------------------------------
Laury Bobbish
Assistant Chief, Telecommunications &
Media Enforcement Section
Antitrust Division

/s/--------------------------------------------------------------------
Alvin H. Chu
Michael Hirrel (D.C. Bar No. 940353)
Brent Marshall
Peter Gray

Attorneys, Telecommunications & Media
Enforcement Section
Antitrust Division
U.S. Department of Justice
City Center Building
1401 H Street, N.W., Suite 8000
Washington, D.C. 20530

(202) 514-5621

Facsimile: (202) 514-6381

United States District Court District of Columbia

    United States of America, Plaintiff, v. CommScope, Inc., and 
Andrew Corporation, Defendants.

Case No: 1:07-cv-02200.
Filed: 12/6/2007.

Final Judgment

    Whereas, Plaintiff, United States of America, filed its Complaint 
on December 6, 2007, the United States and defendants, CommScope, Inc. 
(``CommScope'') and Andrew Corporation (``Andrew''), 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 Andrew and CommScope 
to assure that competition is not substantially lessened;
    And whereas, the United States requires Andrew and CommScope to 
make certain divestitures for the purpose of remedying the loss of 
competition alleged in the Complaint;
    And whereas, defendants have represented to the United States that 
the divestiture 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 and section 8 
of the Clayton Act, as amended (15 U.S.C. 18,19).

II. Definitions

    As used in this Final Judgment:
    A. ``CommScope'' means defendant CommScope, Inc., a Delaware 
corporation with its headquarters in Hickory, North Carolina, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    B. ``Andrew'' means defendant Andrew Corporation, a Delaware 
corporation with its headquarters in Westchester, Illinois, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, and their directors, 
officers, managers, agents, and employees.
    C. ``Acquirer'' means the entity or person to whom defendants 
divest their interests in the Andes Holdings.
    D. ``Andes'' means Andes Industries, Inc., a Nevada corporation 
with its headquarters in Gilbert, Arizona, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships and 
joint

[[Page 72380]]

ventures, and their directors, officers, managers, agents, and 
employees.
    E. ``PCT'' means PCT International, Inc., a wholly-owned subsidiary 
of Andes.
    F. ``Yantai Factory'' means the factory in Yantai City, China 
formerly operated by Andrew Broadband Telecommunications (Yantai) Co., 
Ltd., now operated by PCT Broadband Communications (Yantai) Co. Ltd., a 
subsidiary of Andes located in Yantai City, China, and used to 
manufacture, inter alia, coaxial cable.
    G. ``IRA'' means the Amended and Restated Investor Rights Agreement 
dated March 30,2007 between Andes and Andrew.
    H. ``Andes Holdings'' means stock representing Andrew's entire 
ownership interest in Andes, the Z-Wire IP, as well as all notes of 
indebtedness in favor of Andrew by Andes, and warrants to acquire 
additional stock of Andes, including but not limited to:
    1. Senior Note dated April 2, 2007 issued in favor of Andrew for 
the amount of $9,035,000;
    2. Senior Note dated March 30, 2007 issued in favor of Andrew 
Corporation Mauritius for the amount of $5,592,000;
    3. Promissory Note, dated September 29, 2006, issued in favor of 
Andrew for the amount of $1,016,000; and
    4. Warrant to Acquire Common Stock of Andes dated April 2, 2007, 
held by Andrew and Andrew Corporation Mauritius.
    I. ``Youtsey'' means Steve Youtsey, Chief Executive Officer of and 
stockholder in Andes.
    J. ``Drop Cable'' means 75 ohm coaxial cable used by cable 
television companies to connect their transmission systems with their 
customers' premises and equipment inside the customers' premises.
    K. ``Z-Wire IP'' means all intellectual property concerning the 
``Z-Wire'' product now made and sold by PCT and PCT Broadband 
Communications (Yantai) Co. Ltd. This intellectual property shall 
include, but not be limited to, the ``Z-Wire'' Trademark, Serial No. 
78,658,023 and the patent, U.S. Patent No. 7,084,343 B1, dated August 
1,2006, concerning the Z-Wire product.

III. Applicability

    A. This Final Judgment applies to CommScope and Andrew, 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. If, prior to complying with sections IV and V of this Final 
Judgment, defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the Andes 
Holdings, they shall require the purchaser to be bound by the 
provisions of this Final Judgment. Defendants need not obtain such an 
agreement from the Acquirer of the assets divested pursuant to this 
Final Judgment.

IV. Divestitures

    A. Defendants are ordered and directed, within 90 calendar days 
after the filing of the Complaint in this matter, or five (5) calendar 
days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to divest the Andes Holdings in a manner consistent 
with this Final Judgment to an Acquirer acceptable to the United 
States, in its sole discretion. Divestiture of all the Andes Holdings 
shall be made to one Acquirer. The United States, in its sole 
discretion, may agree to one or more extensions of this time period, 
not to exceed 60 calendar days in total, and shall notify the Court in 
such circumstances. If within the initial period for divestiture, plus 
any extensions, an agreement with a prospective Acquirer has been 
reached and the prospective Acquirer, and the terms of the acquisition 
agreement, have been approved by the United States, and the defendants 
have provided the written notice of intent to sell required by section 
4.1(b) of the IRA (``IRA 4.I(b)''), the time for completing the 
divestiture shall automatically be extended, in order to allow 
defendants to comply with the right of first refusal provision in IRA 
4.1(b). The period of this extension shall not exceed five (5) days 
past the date on which both Andes and Youtsey have failed to timely (a) 
deliver a Right of First Refusal (``ROFR'') Notice accompanied by a 
Reasonable Assurances Letter pursuant to IRA 4.1(b); or (b) consummate 
the purchase of Andrew's ownership interest in Andes pursuant to IRA 
4.1(b). Defendants agree to use their best efforts to divest the Andes 
Holdings as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability of the Andes Holdings. Defendants shall inform any person 
making inquiry regarding a possible purchase of the Andes Holdings 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 that are 
available to them relating to the Andes Holdings or to Andes, to the 
extent permitted by sections IV(C) and VIII(B) below or by sections 
V(A) and V(B) of the Hold Separate and Stipulation Order, and 
customarily provided in a due diligence process, except such 
information or documents subject to the attorney-client or work-product 
privileges. Defendants shall make available such information to the 
United States at the same time that such information is made available 
to any other person.
    C. Defendants shall, at the option of Andes, continue to provide 
the services now provided pursuant to the Transition Services Agreement 
dated March 30, 2007, according to the terms of that Agreement, until 
the end of February 2008. At the end of the period in which defendants 
provide transition services, defendants shall, at the option of Andes, 
provide a copy in a format acceptable to Andes from the relevant Andrew 
servers of all historic data concerning operation of the Yantai 
Factory. In any event, defendants shall maintain the operations 
software and the data on the servers for a period of two months after 
completion of the transition services period, and, during those two 
months, shall make available to Andes any information on the servers 
that is requested by Andes, except the licensed software itself. At the 
end of those two months, defendants shall erase from the servers all 
data relating to the operations of the Yantai Factory, but they may 
keep one copy of that data, which copy they shall place in the custody 
of their outside counsel. Defendants shall not access or use the Andes 
data on the servers or the copy for any purpose; provided, however, 
that, pursuant to a protective order issued by the Court, outside 
counsel and employees whose participation is necessary may access the 
Andes data to the extent necessary for the defense of a lawsuit or in 
connection with a regulatory or tax proceeding of which the defendants 
are, or one of them is, the subject.
    D. To the extent that Andrew now provides services, materials or 
building space to Andes, defendants shall, at the option of Andes, 
continue to provide those services, materials and building space on the 
existing terms until the end of the period in which defendants provide 
transition services pursuant to section IV(C) above. During the period 
in which defendants continue to provide services to Andes, they may not 
reduce the quality or timeliness of those services, including services 
under both this and section IV(C) above.

[[Page 72381]]

    E. Defendants shall divest to the Acquirer, as part of the Andes 
Holdings, the Z-Wire IP. The Acquirer shall acquire this intellectual 
property subject to Andrew's rights and obligations under the 
Technology Licensing Agreement dated March 30, 2007, between Andrew and 
PCT Broadband Communications (Yantai) Co. Ltd. Andrew shall assign its 
part in that agreement to the Acquirer, the Acquirer shall assume 
Andrew's position as licensor under the agreement, and PCT Broadband 
Communications (Yantai) Co. Ltd. shall remain the licensee. As part of 
the divestiture of the Z-Wire IP, the Acquirer shall offer defendants a 
non-exclusive, royalty-free license to use U.S. Patent No. 7,084,343 
B1, provided that the license does not permit defendants to use the Z-
Wire IP to develop, make, use or sell Drop Cable products and provided 
that the license does not directly or indirectly affect Andes' ability 
to use the Z-Wire IP. Prior to the divestiture of the Z-Wire IP, 
defendants shall, at the option of Andes, grant Andes and PCT a 
perpetual, worldwide and royalty-free license to use the ``Z-Wire'' 
trademark, Serial No. 78,658,023, and the Z-Wire trademark, Serial No. 
78,658,023 shall be divested to the Acquirer subject to that license.
    F. Defendants shall not take any action that will jeopardize, delay 
or impede in any way the divestiture of the Andes Holdings.
    G. Unless the United States otherwise consents in writing, the 
divestiture pursuant to section IV, or by trustee appointed pursuant to 
section V, of this Final Judgment, shall include the entire Andes 
Holdings, and shall be accomplished in such a way as to satisfy the 
United States, in its sole discretion, that Andes will remain a viable 
competitor in the market for Drop Cable, and that the divestiture will 
remedy the competitive harm alleged in the Complaint resulting from 
CommScope's acquisition of Andrew. In addition, the divestiture, 
whether pursuant to section IV or section V of this Final Judgment, 
shall be made to an Acquirer that in the United States' sole judgment 
has the intent and capability of investing in Andes in such a manner as 
to support the continued competitive operations of its Drop Cable 
business and shall be accomplished so as to satisfy the United States, 
in its sole discretion, that none of the terms of any agreement between 
the Acquirer and defendants unreasonably raises Andes' costs, lowers 
Andes' efficiency, or otherwise interferes in the ability of Andes to 
compete effectively.
    H. Upon completion of the divestiture to the Acquirer, neither the 
defendants nor the trustee shall have any rights under the IRA.
    I. Nothing in this Final Judgment shall prohibit defendants from 
seeking payment of the notes within the Andes Holdings or for services 
or products supplied under the terms of any agreement with Andes, and 
taking action to collect any amounts past due under those agreements, 
including institution of legal proceedings to collect those overdue 
amounts; provided, however, that defendants may not undertake legal 
actions that would jeopardize the divestiture required by this Final 
Judgment or Andes' continuing viability, including, but not limited to, 
seeking accelerated payment of principal or other amounts not currently 
overdue or seeking to place Andes in involuntary bankruptcy; nor may 
defendants exercise any right under the Warrant to acquire additional 
Andes stock.

V. Appointment of Trustee

    A. If defendants have not divested the Andes Holdings within the 
time period specified in section IV(A), defendants shall notify the 
United States of that fact in writing. Upon application of the United 
States, the Court shall appoint a trustee selected by the United States 
and approved by the Court to effect the divestiture of the Andes 
Holdings.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Andes Holdings. The trustee 
shall have the power and authority to accomplish the divestiture to an 
Acquirer acceptable to the United States at such price and on such 
terms as are then obtainable upon reasonable effort by the 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(D) of this Final Judgment, the 
trustee may hire at the cost and expense of defendants any investment 
bankers, attorneys, or other agents, who shall be solely accountable to 
the trustee, reasonably necessary in the trustee's judgment to assist 
in the divestiture.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under section VI.
    D. The trustee shall serve at the cost and expense of defendants, 
on such terms and conditions as the United States approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to CommScope (or to Andrew if Andrew has 
not been acquired by CommScope at that time) and the trust shall then 
be terminated. The compensation of the trustee and any professionals 
and agents retained by the trustee shall be reasonable in light of the 
value of the Andes Holdings and based on a fee arrangement providing 
the 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.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to Andrew's personnel 
responsible for its Andes investment and to documents and information 
concerning Andes in Andrew's possession, 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 trustee's accomplishment of the 
divestiture.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestiture ordered under this Final 
Judgment. To the extent such reports contain information that the 
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 
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, the Andes Holdings, and shall describe in 
detail each contact with any such person. The trustee shall maintain 
full records of all efforts made to divest the Andes Holdings.
    G. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment within six months after its appointment, the 
trustee shall promptly file with the Court a report setting forth (1) 
the trustee's efforts to accomplish the required divestiture, (2) the 
reasons, in the trustee's judgment, why the required divestiture has 
not been accomplished, and (3) the trustee's recommendations. To the 
extent such reports contain

[[Page 72382]]

information that the trustee deems confidential, such reports shall not 
be filed in the public docket of the Court. The trustee shall at the 
same time furnish such report to the United States which 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 
trustee's appointment by a period requested by the United States.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, defendants or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States of any proposed divestiture required by section IV or 
V of this Final Judgment. If the 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 Andes Holdings, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer, any other third party, or the trustee, if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, and any other potential Acquirer. Defendants and 
the 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 the United States has been 
provided with the additional information requested from defendants, the 
proposed Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendants and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If the 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(C) of 
this Final Judgment. Absent written notice that the United States does 
not object to the proposed Acquirer or upon objection by the United 
States, a divestiture proposed under section IV or section V shall not 
be consummated. Upon objection by defendants under section V(C), 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 purchase made 
pursuant to Section IV or V of this Final Judgment.

VIII. Hold Separate

    A. Until the divestiture required by this Final Judgment has been 
accomplished, the defendants shall be bound by, and shall take all 
steps necessary to comply with, the Hold Separate Stipulation and Order 
entered by this Court. The Hold Separate Stipulation and Order shall 
survive entry of this Final Judgment until the divestiture has been 
completed.
    B. Defendants shall not access or use any written confidential 
information provided to defendants by Andes about Andes' business 
operations, or access or use any written confidential information still 
possessed by Andrew about its former Drop Cable business and the Yantai 
Factory. Outside counsel for defendants and employees whose 
participation is necessary, may, however, access such information to 
the extent necessary to meet legal or regulatory requirements or to 
conduct a defense of a lawsuit, but only subject to a protective order 
by the Court. Defendants may also designate a third party agent 
approved by the United States to access on their behalf such 
confidential business information to which defendants are otherwise 
entitled for the purpose of sharing that information with bona fide 
prospective acquirers of the Andes Holdings. The agent shall identify 
to Andes in advance all prospective acquirers with whom confidential 
information will be shared, and shall, at Andes' request, require those 
prospective acquirers to execute confidentiality agreements binding 
them to keep the information confidential and to use it for no purpose 
other than to evaluate the prospective acquisition. The agent may not 
in any circumstances share any Andes confidential information with 
defendants.
    C. Defendants shall take no action that would diminish the value of 
the Andes Holdings.

IX. Survival of Agreements

    The Trademark License Agreement dated March 30, 2007 among Andrew, 
PCT and Andes, shall remain in force according to its terms. CommScope 
shall comply with Andrew's obligations under that agreement. Defendants 
shall not unreasonably interfere with the rights of Andes and PCT to 
use the subject intellectual property licensed under that agreement. 
Prior to the divestiture, the Trademark License Agreement shall, with 
respect to the ``Z-Wire'' trademark, Serial No. 78,658,023, be 
superseded by the new Z-Wire trademark license described in section 
IV(E) above.

X. 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 divestiture has been completed under section IV or V, defendants 
shall deliver to the United States an affidavit as to the fact and 
manner of its compliance with section IV or V of this Final Judgment. 
Each such affidavit with respect to section IV shall include the name, 
address, and telephone number of each person who, during the preceding 
thirty (30) calendar 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 Andes 
Holdings, and shall describe in detail each contact with any such 
person during that period. Each such affidavit with respect to section 
IV shall also include a description of the efforts defendants have 
taken to solicit buyers for the Andes Holdings, 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 the United States 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 the United States 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 the United States an affidavit describing any changes 
to the efforts and actions outlined in defendants' earlier affidavits 
filed 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 Andes Holdings until one year after such 
divestiture has been completed.

[[Page 72383]]

XI. 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 authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of an 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 the option of the United States, to require defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, 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 an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or responses to written 
interrogatories, 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 the United States to any person other 
than an authorized representative of the executive branch of the United 
States, 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 the 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 the 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).

XII. Restrictions on Acquisition

    Defendants may not reacquire all or any part of Andes or the Andes 
Holdings within the term of this Final Judgment, unless: (1) Defendants 
have, not earlier than the date three years after the Andes Holdings 
are divested, filed a Notification and Report required by the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, and all applicable 
waiting periods under that Act have expired, or; (2) if no such 
Notification and Report is required, defendants have, not earlier than 
the date three years after the Andes Holdings are divested, provided 
written notice to the United States containing information equivalent 
to that required in a Hart-Scott-Rodino Notification and Report, and 
either thirty days thereafter the United States has not issued a 
request for further information and documents, or, if the United States 
has issued such a further request, thirty days have expired since the 
date on which defendants certify that they have substantially complied 
with that further request, and; (3) in either or both of the preceding 
cases, the United States has not objected in writing to the 
reacquisition. Provided, further, that the Andes Holdings are deemed to 
include any license defendants might acquire to use any part of the Z-
Wire IP for Drop Cable. Nothing in this Final Judgment affects any 
ability defendants may otherwise have to acquire any parts of Andes' 
business that solely concern products other than Drop Cable.

XIII. 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.

XIV. Expiration of Final Judgment

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

XV. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and the United States's responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and response to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16

-----------------------------------------------------------------------
United States District Judge

In the United States District Court for the District of Columbia

    United States Of America, Plaintiff, v. Commscope, Inc. and Andrew 
Corporation, Defendants.

    Case No. 1:07-cv-02200.
    Assigned To: Lamberth, Royce C.
    Assign Date: 12/6/2007.
    Description: Antitrust.

Competitive Impact Statement

    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. 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 entered into an Agreement and Plan of Merger dated June 
26, 2007, pursuant to which CommScope, Inc. (``CommScope'') will 
acquire Andrew Corporation (``Andrew''). As a result of the 
transaction, CommScope will acquire Andrew's interests, including stock 
ownership, notes of indebtedness and management rights, in Andes 
Industries, Inc. (``Andes''). Plaintiff filed a civil antitrust 
Complaint on December --, 2007 seeking to enjoin the proposed 
acquisition. The Complaint alleges that the acquisition by CommScope of 
Andrew's holdings in Andes may substantially lessen competition in the 
market for drop cable and will create interlocking directorates, in 
violation of Section 7 and Section 8 of the Clayton Act, 15 U.S.C. 18, 
19. This loss of competition would likely result in higher prices, 
reduced innovation, and fewer choices for customers.
    At the same time the Complaint was filed, plaintiff also filed a 
Hold Separate Stipulation and Order and proposed Final Judgment, which 
are designed to eliminate both the anti competitive effects of the 
acquisition and the interlocking directorates. Under the proposed Final 
Judgment, which is explained more fully below, defendants

[[Page 72384]]

are required to divest (a) Andrew's entire ownership in Andes; (b) all 
notes of indebtedness in favor of Andrew by Andes; (c) all warrants to 
acquire additional stock of Andes; and (d) intellectual property 
relating to the ``Z-Wire'' product (collectively the ``Andes 
Holdings''). At the same time as the required divestiture, defendants 
will relinquish Andrew's governance rights over Andes, including rights 
to appoint members of Andes' board of directors. Under the Hold 
Separate Stipulation and Order, defendants will take certain steps to 
ensure (a) that defendants do not exercise any of Andrew's management 
rights in Andes, except in certain narrowly defined circumstances; (b) 
that Andrew's current member on the Andes' board of directors will 
resign within two business days after CommScope acquires Andrew and 
Andrew will not exercise its right to appoint members to Andes' board; 
(c) that Andes will remain independent of and uninfluenced by 
defendants during the pendency of the ordered divestiture; and (d) that 
competition is maintained during the pendency of the ordered 
divestiture.
    Plaintiff and defendants have stipulated that the proposed Final 
Judgment may be entered after compliance with the APP A. 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.

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

A. The Defendants and the Proposed Transaction
    Defendant CommScope is a Delaware corporation with headquarters in 
Hickory, North Carolina. It is a major manufacturer and provider of 
wire and cable products. It manufactures, among other things, drop 
cable and, through a wholly-owned subsidiary, hardware products used in 
drop cable installations. For fiscal year 2006, CommScope reported 
total revenues in excess of $1.6 billion, with $550 million coming from 
its broadband business segment, which includes cable and hardware 
products sold to cable television and telecommunications companies.
    Defendant Andrew is a Delaware corporation with headquarters in 
Westchester, Illinois. Andrew is a major manufacturer and supplier of 
antenna and cable products and products for wireless communication 
systems. For fiscal year 2006, it reported total sales in excess of 
$2.1 billion, with approximately $1.3 billion coming from its antenna 
and cable business segment.
    Andrew was a manufacturer of drop cable until it sold this business 
in March 2007 to Andes and Andes' subsidiaries, PCT International, Inc. 
and PCT Broadband Communications (Yantai) Co. Ltd. (collectively 
``Andes''). As a result of two transactions between Andrew and Andes, 
Andrew holds 30 percent of Andes' equity, a warrant to acquire 
additional stock of Andes, and several Andes' notes of indebtedness. 
Andrew also holds, under a March 30, 2007, Amended and Restated 
Investor Rights Agreement (the ``IRA''), numerous governance rights 
over Andes, including rights to designate members of Andes' board of 
directors. When it sold its drop cable business to Andes, Andrew 
licensed Andes to use the intellectual property associated with Z-Wire, 
a dry anti-corrosion protected drop cable.
    Pursuant to an Agreement and Plan of Merger dated June 26, 2007, 
CommScope proposes to acquire Andrew in an all-stock transaction valued 
at approximately $2.6 billion. As a result of the proposed acquisition, 
CommScope would obtain rights to appoint members to the board of 
directors of Andes, a significant competitor in the development, 
manufacture and sale of drop cable. In addition, it would be able to 
exert substantial control over Andes, given its ownership of shares, 
warrants and debt instruments, and its governance rights. CommScope's 
acquisition of Andrew would thus substantially lessen competition in 
the market for drop cable, and would create interlocking directorates 
between competing companies. This acquisition is the subject of the 
Complaint and proposed Final Judgment filed by plaintiff.
B. Substantial Lessening of Competition
    CommScope's acquisition of Andrew's holdings in Andes would violate 
section 7 of the Clayton Act because the acquisition's effect may be 
substantially to lessen competition in the market for drop cable in the 
United States.

1. Relevant Product and Geographic Markets

a. Drop Cable Product Market

    Drop cable is 75 ohm coaxial cable used by cable television 
companies to connect their transmission systems with their customers' 
premises and equipment inside the customers' premises. It consists of a 
plastic jacket, metal braid and foil shielding, a dielectric layer, and 
a center conductor. Cable television companies typically use drop cable 
in three kinds of locations: (1) In the air between outside poles and 
the exteriors of the customers' premises; (2) underground between 
buried transmission systems and the exteriors of the customers' 
premises; and (3) inside the customers' premises to connect the 
exterior cables with customer-premises devices. Drop cable strung 
between outside poles and the exteriors of the customers' premises 
typically contains an ultraviolet (``UV'') protectant in the jacket and 
a steel wire, called a ``messenger,'' inside the cable to reduce 
flexing; much of this aerial cable also incorporates anti-corrosion 
protection for the metal shielding. Drop cable used underground 
typically is ``flooded'' with a gel compound to prevent water ingress 
and corrosion.
    No matter how it is used, all drop cable purchased by cable 
television companies is distinguished from other 75 ohm coaxial cable, 
which is usually called ``commodity'' cable. Drop cable must meet 
stringent Society of Cable Television Engineers (``SCTE'') and other 
cable television industry standards. Those standards address, inter 
alia, durability, uniformity, electrical conduction and signal 
shielding. Signal shielding standards address the ability of the cable 
to prevent signal leakage outside the cable, as well as leakage into 
the cable of extraneous outside signals. Compliance with SCTE and other 
industry standards assures cable television companies that the drop 
cable they buy will not require frequent replacement, will fit with the 
other components of their systems, can readily be handled by a cable 
system's installers and technicians, and, most importantly, will 
deliver a strong and interference-free signal.
    In addition to the above requirements, some cable television 
customers require that dry anti-corrosion protection be incorporated 
into much of the drop cable they buy. Anti-corrosion protection 
protects the cable's shielding from oxidation, which can result in 
interference and diminished signal strength. Two types of anti-
corrosion coatings are used, gel and dry. Gel coated cables are used 
for almost all underground installations. A few cable television 
companies also use them for aerial installations. Many cable television 
companies require dry-coated cable for all aerial installations. They 
impose this requirement because dry cable is easier to work with, does 
not drip from cables onto hardware or customers' property, and costs 
less. The demand for dry anti-corrosion is

[[Page 72385]]

especially strong among cable television companies that operate near 
the ocean or in other areas prone to metal oxidation.
    Drop cable is the relevant product market, or ``line of commerce,'' 
within the meaning of section 7 of the Clayton Act. Cable television 
companies, who are the purchasers of drop cable, could not use other 
types of coaxial cable. Those alternatives do not meet industry 
standards and could fail to provide the strong and interference-free 
signal that consumers expect. Because other types of coaxial cable 
would degrade the performance of their networks, causing cable 
subscriber dissatisfaction, cable television companies would not switch 
from drop cable to other types of cable even if faced with a 
significant price increase.

b. The United States Geographic Market

    The United States is a distinct geographic market for the sale of 
drop cable. SCTE and cable television industry standards are designed 
to meet the common needs of cable television companies operating in the 
United States. Although Andes and CommScope manufacture drop cable i