Public Comments and Plaintiff's Response; United States of America v. American Skiing Company and S-K-I Limited

DEPARTMENT OF JUSTICE

Antitrust Division

Public Comments and Plaintiff's Response; United States of

America v. American Skiing Company and S-K-I Limited

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. Sec. 16 (b)-(h), that Public Comments and

Plaintiff's Response have been filed with the United States District

Court for the District of Columbia in United States v. American Skiing

Company and S-K-I Limited, Civ. Action No. 96-01308.

On June 11, 1996, the United States filed a Complaint seeking to

enjoin a transaction in which American Skiing Company (``ASC'') agreed

to acquire S-K-I Limited (``S-K-I''). ASC and S-K-I are the two largest

owner/operators of ski resorts in New England, and this transaction

would have combined eight of the largest ski resorts in this region.

The Complaint alleged that the proposed acquisition would substantially

lessen competition in providing skiing to eastern New England and Maine

skiers in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec. 18,

and Section 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1.

Public comment was invited within the statutory 60-day comment

period. Such comments, and the responses thereto, are hereby published

in the Federal Register and filed with the Court. Brochures, newspaper

clippings and miscellaneous materials appended to the Public Comments

have not been reprinted here, however they may be inspected with copies

of the Complaint, Stipulation, proposed Final Judgment, Competitive

Impact Statement, Public Comments and Plaintiff's Response in Room 3233

of the Antitrust Division, Department of Justice, Tenth Street and

Pennsylvania Avenue, N.W., Washington, D.C. 20530 (telephone: 202-633-

2481) and at the office of the Clerk of the United States District

Court for the District of Columbia, Third Street and Constitution

Avenue, N.W., Washington, D.C. 20001.

Copies of any of these materials may be obtained upon request and

payment of a copying fee.

Constance K. Robinson,

Director of Operations, Antitrust Division.

United States of America, Plaintiff, v. American Skiing Company,

and S-K-I Limited, Defendants.

[Civil Action No.: 96-01308-TPJ]

United States' Response to Public Comments

Pursuant to the requirements of the Antitrust Procedures and

Penalties Act, 15 U.S.C. Sec. 16(b)-(h) )(the ``Tunney Act''), the

United States responds to the public comments received regarding the

proposed Final Judgment in this case.

I. Background

The United States filed a civil antitrust Complaint on June 11,

1996, alleging that the proposed acquisition of the ski resorts of S-K-

I Limited (``S-K-I'') by American Skiing Company (``ASC'') would

violate Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint

alleged that ASC and S-K-I were the two largest owner/operators of ski

resorts in New England, and that the proposed transaction would combine

eight of the largest ski resorts in this region. In particular, the

acquisition would substantially increase the concentration among ski

resorts to which eastern New England residents (i.e., those in Maine,

eastern Massachusetts and Connecticut, and Rhode Island) practicably

can go for weekend ski trips, and among those to which Maine residents

practicably can go for day ski trips. As a result, this acquisition

threatened to raise the price of, or reduce discounts for, weekend and

day skiing to consumers living in those areas in violation of Section 7

of the Clayton Act.

At the same time the Complaint was filed, the United States also

filed a proposed settlement that would permit ASC to complete its

acquisition of S-K-I's ski resorts, but also require certain

divestitures that would preserve competition for skiers in eastern New

England and Maine. This settlement consists of a Stipulation and a

proposed Final Judgment.

The proposed Final Judgment orders the parties to sell all of S-K-

I's rights, titles, and interests in the Waterville Valley resort in

Campton, New Hampshire, and all of ASC's rights, titles, and interests

in the Mt. Cranmore resort in North Conway, New Hampshire, to one or

more purchasers who have the capability to compete effectively in the

provision of skiing for eastern New England and Maine skiers at

Waterville Valley and Mt. Cranmore. The Stipulation and proposed Final

Judgment also impose a hold separate agreement that requires defendants

to ensure that, until the divestiture mandated by the proposed Final

Judgment has been accomplished, S-K-I's Waterville Valley and ASC's Mt.

Cranmore operations will be held separate and apart from, and operated

independently of, defendants' other assets and businesses, and be

preserved and maintained as saleable and economically viable, ongoing

concerns, with competitively sensitive business information and

decision-making divorced from that defendants' other ski resorts.

A Competitive Impact Statement (``CIS''), explaining the basis for

the complaint and proposed consent decree in settlement of the suit,

was filed on June 18, 1996, and subsequently published for comment,

along with the Stipulation and proposed Final Judgment, in the Federal

Register on June 28, 1996 (61 FR 33765-33774), as required by the

Tunney Act. The CIS explains in detail the provisions of the proposed

Final Judgment, the nature and purpose of these proceedings, and the

proposed acquisition alleged to be illegal.

The United States, ASC, and S-K-I stipulated that the proposed

Final Judgment may be entered after compliance with the Tunney Act. The

plaintiff and defendants have now, with the exception of publishing the

comments and this response in the Federal Register, completed the

procedures the Tunney Act requires before the proposed Final Judgment

can be entered.\1\ The sixty-day period for public comments expired on

August 27, 1996. As of October 1, 1996, the United States had received

98 comments.

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\1\ The United States plans to publish the comments and this

response promptly in the Federal Register. It will provide the Court

with a certificate of compliance with the requirements of the Tunney

Act and file a motion for entry of final judgment once publication

takes place.

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The comments, which are collected in the Appendix to this

Response,\2\ came from a variety of sources. The most comprehensive

comment was submitted by the Mount Washington Valley Task Force,

chaired by James B. Somerville,

[[Page 55996]]

manager of Town of Conway, New Hampshire (the ``Conway Report''). The

other comments came primarily from individuals such as skiers, property

owners, local business persons, and others. Many of the points made by

individual commentors were spelled out in more detail in the Conway

Report.

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\2\ The comments have been numbered, and a log prepared. For

ease of reference, the United States in this Response refers to

individual comments by the log number assigned to the comment, with

the exception of number 98, which is referred to as the ``Conway

Report.''

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II. Response to Comments

A. Overview

Several comments (3, 67, 75, 76, 97) support the proposed Final

Judgment. In particular they express approval of the provisions that

require the divestiture of the Mt. Cranmore ski resort and related

assets. These commentors note that economies of scale do not

necessarily result in lower prices (76, 97) and that LBO Resort

Enterprises (the predecessor to ASC) raised prices and eliminated

discount voucher programs at Mt. Cranmore after acquiring it. (67, 97)

``LBO only discounts when their competition is discounting and

impacting their skier visits and profit margin.'' (76) One commentor

stated, ``We need more competition, not less competition, in this

area.'' (97) The commentor also noted that the new owners of Mt.

Cranmore would have as much or more interest as LBO in ensuring that

Mr. Cranmore remains a healthy, vigorous competitor and in promoting

the local economy. Id.

The majority of the comments submitted, however, including the

Conway Report, expressed opposition, primarily to the provision of the

proposed Final Judgment requiring divestiture of Mt. Cranmore. These

comments can be arranged in a line of argument as follows:

--the antitrust laws should not apply to skiing;

--the Department misconceived the product markets for day and weekend

skiing;

--the Department misconceived the geographic markets for eastern New

England weekend skiing and for Maine day skiing;

--the proposed merger does not pose any anticompetitive problem;

--the proposed divestiture does not solve the anticompetitive problem

alleged in the Complaint; and

--Mt. Cranmore is not viable except as part of the post-merger entity.

The comments in opposition to the proposed Final Judgment are

addressed in the following sections of this Response and are arranged

by the antitrust issues they raise.\3\

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\3\ This Response addresses all of the antitrust issues that are

raised in the comments and issues related to the substance of the

Complaint and proposed Final Judgment. Unrelated arguments and

objections are not discussed, such as complaints about statements

reported in the press (32, 60). These comments are irrelevant to the

issues of this case, and not properly subject of comment to which

the Antitrust Division must respond under the Tunney Act.

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B. The Clayton Act Applies to Acquisitions in the Ski Industry

The Conway Report along with several commentors (12, 26, 32, 33,

56, 77, 82, 89) suggest that the antitrust laws should not apply to the

ASC/S-K-I merger because skiing is a ``leisure activity.'' They

maintain that the majority of skiers are middle- and upper-income

people who pay for the activity with ``discretionary dollars.''

In general, however, the antitrust laws protect consumers in

whatever markets they choose to spend their money. Specifically,

Section 7 of the Clayton Act does not distinguish between leisure

activities and other lines of commerce. Rather, subject to certain

jurisdictional qualifications, Section 7 prohibits all acquisitions

``where in any line of commerce or in any activity affecting commerce

in any section of the country, the effect of such acquisition may be

substantially to lessen competition, or to tend to create a monopoly.''

15 U.S.C. Sec. 18 (emphasis added). The provision of weekend and day

skiing clearly constitute lines of commerce subject to Section 7 and

other antitrust laws. The business of skiing comprises all services

related to providing access to downhill skiing, including but not

limited to, providing lifts; ski patrol; snowmaking; design, building;

and grooming of trails; skiing lessons; and ancillary services such as

food service, entertainment, and lodging. See Aspen Highlands Skiing

Corp v. Aspen Skiing Co., 738 F.2d 1509, aff'd, 472 U.S. 585 (1984)

(jury in private antitrust case found relevant product market and

injury in downhill skiing). Thus, the Department's antitrust analysis

of the proposed merger of ski slopes is appropriate.

C. Downhill Skiing Is a Relevant Product Market for Antitrust Purposes

The Conway report asserts that the ``ski industry is not in

competition with itself,'' but rather is part of a larger leisure and

sports industry. For purposes of antitrust analysis, Conway and several

commentors (22, 41, and 64) would define the relevant product market as

all leisure and sports activities, including gambling, cruises, warm

weather resorts, adventure/experience trips, shopping, theater, music,

and professional sports. Conway at 18.

The Antitrust Division's review of mergers is governed by the

Clayton and Sherman Acts, Supreme Court precedent, and the ``Horizontal

Merger Guidelines'' issued jointly by the Department and the Federal

Trade Commission in 1992. The standard for defining a relevant product

market is set forth below:

Specifically, the Agency will begin with each product (narrowly

defined) produced or sold by each merging firm and ask what would

happen if a hypothetical monopolist of that product imposed at least

a `small but significant and nontransitory' increase in price, but

the terms of sale of all other products remained constant. If, in

response to the price increase, the reduction in sales of the

product would be large enough that a hypothetical monopolist would

not find it profitable to impose such an increase in price, then the

Agency will add to the product group the product that is the next-

best substitute for the merging firm's product.

Horizontal Merger Guidelines Sec. 1.11. See Brown Shoe v. U.S., 370

U.S. 294 (1962).

Applying this standard to the present case, downhill skiing is the

relevant product market. For purposes of this merger, downhill skiing

differs from other winter recreational activities (such as cross-

country-skiing, ice skating, snowmobiling, ice climbing, and cruises to

warm weather resorts) and from all-weather activities (such as shopping

and gambling), because as the Department's investigation showed, if

prices at ASC resorts went up a small but significant amount after the

merger (for example, by five percent without inflation or any quality

improvements), people might switch where they went to ski, but they

would continue to ski rather than switch to these other recreational

activities. Typical downhill skiers would not switch to an activity

such as ice-climbing, for example, just because the price of a downhill

ticket increases by a small amount. They certainly would not switch in

sufficient numbers to defeat a price increase. Based on this

information, downhill skiing is the appropriate relevant product market

for our analysis.

D. There Are Regional Geographic Markets for Weekend Skiing in Eastern

New England and for Day Skiing in Maine

The Conway Report (p. 5) and commentors 34, 41, and 64 suggest that

the relevant geographic market for purposes of analyzing the proposed

acquisition is increasingly global in nature. Alternatively, Conway and

numerous commentors (1, 8, 13, 14, 17, 19, 21, 25, 30, 33, 44, 47-50,

53-57, 62, 70-72, 78-81, 85, 86, 89) maintain that there are many

resorts in the Mt.

[[Page 55997]]

Washington Valley, elsewhere in New England, and even in the western

U.S. that compete with Mt. Cranmore. Therefore, the commentors assert

that the Department's eastern New England/weekend and Maine/day

geographic markets are too narrow to be meaningful.

The standard for defining a relevant geographic market is set forth

below:

In defining the geographic market or markets affected by a

merger, the Agency will begin with the location of each merging firm

(or each plant of a multiplant firm) and ask what would happen if a

hypothetical monopolist of the relevant product at that point

imposed at least a `small but significant and nontransitory'

increase in price, but the terms of sale at all other locations

remained constant. If, in response to the price increase, the

reduction in sales of the product at that location would be large

enough that a hypothetical monopolist producing or selling the

relevant product at the merging firm's location would not find it

profitable to impose such an increase in price, then the Agency will

add the location from which production is the next-best substitute

for production at the merging firm's location.

Horizontal Merger Guidelines Sec. 1.21. See Brown Shoe v. U.S., 370

U.S. 294 (1962).

Thus, the appropriate starting point for defining the relevant

geographic market is the area in and around ASC's and S-K-I's resorts.

If ASC could impose a ``small but significant and nontransitory'' price

increase after the merger (for example, five percent) without causing a

sufficient number of skiers to switch to ski slopes in other geographic

areas and defeat the price increase, then the appropriate geographic

market is limited to these locations. Resorts in other geographic

regions of the country or abroad should not be included in the relevant

geographic market.

The Department's investigation revealed that geographic markets for

weekend and day skiing are indeed regional, rather than national or

international. Skiers are not willing to travel an unlimited distance

to ski. Traveling to distant ski resorts imposes a burden on the skier,

either in the form of excessive driving time or large additional

expense for airfare. The determinative factors in how far people are

willing to travel for skiing are the duration of the trip (e.g., single

day, weekend, extended vacation), the qualitative aspects of the

particular resort (e.g., number of trails and lifts, variety and

difficulty of trails, snowmaking, night skiing, accommodations, and

other amenities), and price. Ski resorts may compete in several

markets--quite local markets for day skiers, larger markets for weekend

skiers, and quite large markets for extended skier vacations. Because

ski resorts can offer different prices in these different markets, each

one is appropriate for antitrust analysis.

Prior to the proposed acquisition, ASC and S-K-I each operated a

total of four ski resorts in Maine, New Hampshire, and Vermont. They

were the two largest owner/operators of ski resorts in New England, and

this transaction would have combined eight of the largest ski resorts

in this region. The Department's investigation revealed that ASC and S-

K-I competed directly and significantly for two distinct groups of

skiers--eastern New England weekend skiers (i.e., those in Maine,

eastern Massachusetts and Connecticut, and Rhode Island) and Maine day

skiers. Although other categories of skiers (e.g., skiers from other

areas and skiers on extended vacation) visit ASC's and S-K-I's resorts,

those skiers were not adversely affected by the merger. The proposed

acquisition substantially increased concentration only among the ski

resorts to which eastern New England residents practicably could go for

weekend ski trips, and to which Maine residents practicably could go

for day ski trips. As a result, the acquisition threatened to raise the

price of, or reduce discounts for, weekend and day skiing to consumers

living in these areas.

1. Eastern New England Weekend Skiers

Eastern New England residents who wish to ski over a weekend can

feasibly turn only to a limited number of resorts with adequate

services (e.g., accommodations, number and variety of trails, and other

amenities) and that are located nearby in Maine, New Hampshire,

Vermont, or western Massachusetts. These are the resorts that have the

necessary qualities and are within a reasonable traveling distance for

eastern New England weekend skiers.

The Department considered the ski areas identified by the Conway

Report along with many others as potential choices for New England

weekend skiers. Of the fourteen resorts identified by the Conway

Report, four would have been owned by ASC after the acquisition as

originally proposed. Smaller ski resorts among the fourteen (such as

King Pine, Shawnee Peak, Black Mountain, and Gunstock) and other

resorts located farther away (such as New York, the West Coast, and

abroad) cannot, and after this transaction would not, constrain prices

charged to weekend skiers living in eastern New England. The smaller

resorts lack the qualitative aspects previously identified (number of

trails and lifts, variety and difficulty of trails, snowmaking, night

skiing, accommodations, and other amenities) and the more distant

resorts are too far away to constrain a small but significant price

increase after the merger of ASC and S-K-I resorts. Although eastern

New England skiers occasionally choose to ski at these smaller or even

more distant resorts, skiing at such resorts is not a practical or

economic alternative for most eastern New England weekend skiers most

of the time.

Ski resorts in Maine, New Hampshire, Vermont, and western

Massachusetts that have the necessary qualities and services to attract

weekend skiers from eastern New England can charge different effective

prices to these skiers than they charge to others. Eastern New England

weekend skiers can be identified easily by the ski resorts that are

reasonable alternatives for these consumers. These ski resorts can

charge eastern New England weekend skiers different prices than charged

to day skiing customers, to customers coming from other parts of the

country, or to customers who stay longer than a weekend. For example,

ski resorts can offer coupons for discounted lift tickets packaged with

lodging and/or airfare, either through direct mail or through

advertising in local papers in the New York, Washington D.C., or

Atlanta metropolitan areas, and not offer such coupons in eastern New

England. A single firm controlling all the resorts in Maine, New

Hampshire, and Vermont with the most attractive qualities and services

for weekend skiing would be able to raise prices a small but

significant amount to eastern New England weekend skiers without losing

sufficient business to smaller or more distant resorts to make the

price increase unprofitable.

Based on this analysis, the Department concluded, and maintains,

that the provision of weekend downhill skiing to eastern New England

residents is a relevant geographic market within the meaning of Section

7 of the Clayton Act.

2. Maine Day Skiers

Before the proposed acquisition, ASC provided skiing to Maine day

skiers primarily at its Sunday River, Attitash/Bear Peak, and Mt.

Cranmore ski resorts. S-K-I provided skiing to Maine day skiers

primarily at its Sugarloaf resort. The acquisition would have brought

these alternatives for Maine skiers under common ownership and control.

Moreover, the ASC acquisition as proposed would have eliminated

Waterville Valley as a non-ASC-owned resort that Maine day skiers could

[[Page 55998]]

consider. Maine residents feasibly can turn only to resorts in Maine

and eastern New Hampshire for day skiing trips. These are the resorts

that are within a reasonable traveling distance for Maine day skiers.

Ski resorts located farther from Maine and eastern New Hampshire

cannot, and after this transaction would not, constrain prices charged

to day skiers living in Maine. Although Maine skiers occasionally

choose to ski at such more distant resorts, skiing at such resorts is

not a practical or economic alternative for most Maine day skiers most

of the time.

Ski resorts in Maine and eastern New Hampshire easily can charge

different prices to Maine day skiers than they charge to other skiers.

Maine day skiers, for example, can be identified by the ski resorts

that are reasonable alternatives for these consumers to drive to for a

day of skiing. These ski resorts can charge Maine day skiers different

effective prices than those charged to out-of-state skiers or to Maine

skiers who stay multiple days. A single firm controlling all the ski

resorts in Maine and eastern New Hampshire would be able to raise

prices a small but significant amount to Maine day skiers (mainly by

reducing or eliminating discounts) without losing so much business as

to make the price increase unprofitable.

Based on this analysis the Department concluded, and maintains,

that the provision of day skiing to Maine residents is a relevant

geographic market within the meaning of Section 7 of the Clayton Act.

The Conway Report makes the following assertions:

--within an hour and fifteen minutes of North Conway there are fourteen

ski areas that create a competitive market place for Maine day skiers

(Conway at 5-6);

--data from 1996 shows that Mt. Cranmore had 125,000 skier visits of

which 6,500 (5.3%) were from Maine and Attitash had 201,000 skier

visits of which 4,422 (2.2%) were from Maine compared with 92,846 total

skier visits from Maine to the state of New Hampshire; thus, Maine

skiers already have sufficient alternatives (Id. at 8);

--the Maine Attorney General's Office negotiated a pricing discount

program for Maine residents ``which the DOJ is apparently satisfied

with'' (Id. at 9).

As with New England weekend skiers, the Department considered all

fourteen of the ski areas identified in the Conway Report along with

many others in its analysis of the competitive consequences of the

proposed merger on Maine day skiers. Of the fourteen ski areas

identified in the Conway Report, three (Cranmore, Attitash, and Sunday

River) were owned by ASC and one (Waterville Valley) was owned by S-K-

I. Many of the other smaller resorts lack the qualitative aspects

previously identified (number of trails and lifts, variety and

difficulty of trails, snowmaking, night skiing, and other amenities) to

constrain a small but significant price increase after the merger of

ASC and S-K-I resorts. Moreover, although many of these resorts are

within an hour and fifteen minutes of North Conway, the focus of our

inquiry is on the distance for day skiers from population centers in

Maine. Many skiers from Portland, Maine, for example, would not find it

practical to drive an additional hour and fifteen minutes beyond North

Conway, where Mt. Cranmore is located (an hour and a half or more trip

for Portland residents), for a day ski trip. For these residents, the

Maine resorts along with Mt. Cranmore and Attitash in eastern New

Hampshire are the most feasible resorts for day skiing.

Rather than focus on the percentage of Maine skier visits to Mt.

Cranmore compared to total New Hampshire skier visits from Maine, the

Department believes the appropriate focus should be on the practical

alternatives available to the Maine day skier after the merger that

could constrain a small but significant price increase by ASC. Prior to

the proposed acquisition, Sunday River (ASC) and Sugarloaf (S-K-I) in

Maine and Mt. Cranmore and Attitash (ASC) in New Hampshire provided

practical and viable alternatives in terms of distance, qualitative

aspects, and price competition for Maine day skiers. After the

acquisition ASC would own Sunday River, Sugarloaf, and Attitash. With

the divestiture of Mt. Cranmore, the Department believes Maine day

skiers will have a feasible and attractive competing alternative to ASC

resorts in Maine and New Hampshire. According to the Conway Report

statistics, Mt. Cranmore already receives almost one and one-half times

more skier visits from Maine than Attitash. The divesture provides the

opportunity for even more Maine day skiers to ski Mt. Cranmore as an

alternative to ASC resorts in the immediate vicinity and to constrain

noncompetitive price increases by ASC.

The Maine Attorney General's Office did negotiate a pricing

discount program with ASC for Maine residents. However, the program is

a percentage-based program. It requires ASC at its Sunday River and

Sugarloaf resorts to compute a ratio of the average resident and non-

resident ticket prices for the 1995-96 season and maintain that ratio

in future years. The Department generally prefers not to attempt to

remedy anticompetitive mergers with price regulation, but rather to

ensure that there is a structurally competitive marketplace that will

provide competitive pricing and high quality goods and services on its

own as a result of the competition. By preserving Mt. Cranmore as a

competitive alternative to ASC ski resorts, the Department believes the

marketplace itself will provide lower prices, higher quality services,

and attractive alternatives for Maine day skiers.

E. The Proposed Merger Is Likely To Result in Increased Prices or

Reduced Discounts in the Two Markets as Alleged

The Conway Report and commentors raise several issues about

pricing:

--the merger is not anticompetitive because it does not create a

single-firm monopoly (Conway at 6);

--the Department has not shown that a price increase will result from

the merger (Id. at 14);

--economies of scale may actually allow reduction in ticket prices

(commentors 9, 22, 53, 84);

--the Department has not shown that price increases will be

``unacceptable to the public;'' higher prices are ``justified and

acceptable to skiers when there is an increase in the level of

services,'' which should be taken into account (Conway at 6); price

increases would reflect improved conditions that LBO brings to the

resort, not monopoly pricing (commentors 12, 25).

The purpose of the Department's review of mergers under the

antitrust laws is to identify and challenge mergers that reduce

competition, facilitate the creation or exercise of market power, or

threaten to increase prices or reduce product quality to consumers. The

Clayton Act does not require the Untied States to wait until there is

an actual single-firm monopoly created by the merger, nor does it

require the Department to violate the antitrust laws. It simply

requires a showing that the effect of an acquisition ``may be

substantially to lessen competition, or to tend to create a monopoly.''

15 U.S.C. Sec. 18 (emphasis added). Market power can be exercised

through supracompetitive prices in market structures that are well

short of an actual monopoly. The Department's analysis of the ASC

transaction predicted that the new entity as originally proposed would

have had sufficient market power to impose price increases.

[[Page 55999]]

In its analysis of post-merger market power, the Department also

considers and evaluates potential efficiencies of the proposed

transaction that could bring improved service or lower prices to

consumers. In the present transaction the Department determined that

any efficiencies resulting from the proposed merger that were

obtainable by ASC in operating multiple resorts were not sufficient to

offset the potential for price increases as a result of the market

power acquired by ASC after the merger.

Moreover, the proposition that price increases after the

acquisition might be ``acceptable'' to the public would confirm that

the markets at issue are properly defined and threatened with loss of

competition. It could mean not only that consumers would face higher

prices, but not have adequate competitive alternatives to which they

could turn. Furthermore, the policy underlying the antitrust laws as

enacted by Congress and applied by the courts is that competition is

the best way to achieve the optimal combination of price and quality.

An antitrust analysis evaluates a merger by considering that the

quality of the product or service is held constant in determining

whether the merged entity would have sufficient market power to impose

a small but significant price increase on consumers. Price increases

that proportionally reflect improvements in quality or service are not

considered anticompetitive.

The Conway Report and several commenters also state:

--skiers do not make their decision where to ski solely on price; other

factors are ski conditions, ski terrain, lift facilities, snowmaking,

and amenities (Conway at 14; commentors 9, 14, 15, 22, 23, 26, 54, 61,

93);

--if the merger results in an anticompetitive price increase, people

will stop skiing (commentors 22, 25, 34, 58, 72, 77) or other resorts

will expand output and undercut those prices (Conway at 15; commentor

43); state-owned mountains in New Hampshire (Sunapee and Cannon)

provide price control (commentors 47-49, 55, 57, 62);

--the merger will hold prices down by encouraging more mid-week skiers

(commentor 73).

The Department did consider factors such as ski conditions, ski

terrain, lift facilities, snowmaking, and amenities in defining the

product market. The determinative factors in how far people are willing

to travel for skiing at a particular mountain are the duration of the

trip (e.g., single day, weekend, extended vacation), the qualitative

aspects of the resort (such as those outlined above), and price. The

lack of these qualitative factors are the very reason many of the

smaller resorts identified in the Conway Report are not feasible

alternatives for substantial numbers of New England weekend skiers.

In its analysis of the market power that ASC would have after its

acquisition of S-K-I, the Department considered whether people would

stop skiing if prices increased at ASC resorts or switch to other

resorts that had lower prices. Although some New England weekend skiers

and Maine day skiers may choose to stop skiing or to ski at smaller

resorts with less desirable qualitative aspects in response to a small

but significant price increase by ASC, they would not do so in

sufficient numbers to defeat such a price increase. The typical

downhill skier who goes to ASC resorts for the qualitative experience

is unlikely to stop skiing or switch to smaller resorts with less

amenities because ticket prices increase by a small amount, such as

five percent.

Moreover, many of the smaller resorts are unlikely to be able to

expand facilities within a timely fashion to defeat an anticompetitive

price increase. For example, to increase the number of lifts and trails

or add snowmaking or night skiing capability would take these resorts

more than two years in most cases and/or require a long regulatory

approval process if their resort is on national forest land.

F. The Proposed Divestiture Solves the Anticompetitive Problem Alleged

in the Complaint

Commentors 11, 43, and 45 suggested that if the Department had

concerns about the ASC/S-K-I acquisition, it should have required ASC

to divest a larger resort, such as Killington or Sunday River, instead

of smaller resorts like Waterville Valley and Cranmore.

In analyzing the proposed Final Judgment, ``the court's function is

not to determine whether the resulting array of rights and liabilities

is one that will best serve society, but only to confirm that the

resulting settlement is within the reaches of the public interest.''

United States v. Western Elec. Co., 993 F.2d 1572, 1576 (D.C. Cir.),

cert. denied, 114 S.Ct. 487 (1993) (emphasis added, internal quotation

and citation omitted). The relief in the proposed Final Judgment is

sufficient to preserve competition for eastern New England weekend and

Maine day skiers.

Before the proposed acquisition, Sunday River (ASC) and Sugarloaf

(S-K-I) in Maine; Mt. Cranmore (ASC), Attitash (ASC), and Waterville

Valley (S-K-I) in New Hampshire; and Sugarbush (ASC), Killington (S-K-

I), and Mt. Snow (S-K-I) in Vermont all provided practical and viable

alternatives in terms of distance, qualitative aspects, and price

competition for New England weekend and Maine day skiers. After the

acquisition ASC would own Sunday River, Sugarloaf, Attitash, Sugarbush,

Killington, and Mt. Snow. By reaching an agreement to divest Mt.

Cranmore and Waterville Valley, New England weekend and Maine day

skiers will continue to have sufficient feasible and attractive

alternatives to ASC resorts. Divesting Killington or another Vermont

resort, for example, would have been of no benefit to Maine day skiers.

Moreover, the divestitures ordered in the proposed Final Judgment

will resolve the substantial increase in concentration brought about by

the proposed transaction. With these divestitures, the post-merger HHI

\4\ for the eastern New England weekend skiing market will be below

1800, and the parties' post-merger share of that market will be less

than 40 percent. The post-merger HHI for the Maine day skiing market

will be slightly over 1900 with these divestitures, and that parties'

post-merger share of that market will be less than 35 percent. Given

these post-divestiture HHI levels, the combined firm's post-divestiture

market shares, and the number and size of independent ski resorts

remaining in the affected markets, the proposed transaction is not

likely to lead to an unilateral anticompetitive effect or to a higher

probability of coordinated behavior, provided the divestitures are

made.

---------------------------------------------------------------------------

\4\ ``HHI'' is an abbreviation for the Herfindahl-Hirschman

Index, a commonly accepted measures 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 thirty, thirty,

twenty and twenty percent, the HHI is 2600

(302+302+202+202=2600). The HHI takes into

account the relative size and distribution of the firms in a market

and approaches zero when a market consists of a large number of

firms of relatively equal size. 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 are considered

to be moderately concentrated and those in which the HHI is in

excess of 1800 points are considered to be concentrated.

Transactions that increase the HHI by more than 100 points in

moderately concentrated and concentrated markets presumptively raise

antitrust concerns under the Department of Justice and Federal Trade

Commission 1992 Horizontal Merger Guidelines.

---------------------------------------------------------------------------

G. Unique Aspects of Mt. Cranmore

The Conway Report and several commentors suggest that there are a

[[Page 56000]]

number of unique aspects of Mt. Cranmore that should be considered:

--there are various economies associated with operating and marketing

Attitash/Bear Creek together with Mt. Cranmore; these economies will be

lost if Mt. Cranmore is divested, making Mt. Cranmore less viable

(Conway at 13; commentor 94);

--the proposed Final Judgment reduces options for consumers because it

eliminates the Attitash/Cranmore joint ticket now offered through ASC

(commentors 1, 16, 21, 30, 32, 50, 63, 66, 70, 72, 77, 80, 85, 86); and

the Department is incapable of determining whether the prospective

buyer will be a strong operator (commenter 32);

--divestiture would have a significant adverse economic impact on the

area around Mt. Cranmore (Conway at 12-13; commentors 2, 5, 12, 14, 17-

19, 22-25, 29, 31, 33-36, 38, 43, 47-53, 55, 57, 59-62, 64, 65, 68, 69,

74, 83, 84, 91-96);

--Mt Cranmore cannot survive on a stand alone basis (Conway at 12-13;

commentors 2, 5, 15-18, 23, 28, 29, 34, 37, 38, 41, 45, 50, 59, 61, 63,

64, 66, 69, 71, 78, 85, 86, 89, 94); it needs to be part of a larger

organization because of economies in marketing (Conway at 12-13;

commentors 2, 9, 19, 21, 23, 26, 28-30, 54, 64, 77, 90, 96);

--Cranmore was struggling to survive before ASC purchased it; ASC has

invested heavily in Mt. Cranmore--in snowmaking equipment, lifts, and

marketing (Conway at 12-13; commentors 1, 2, 4-10, 12, 13, 15-18, 22,

24-29, 37-39, 40, 41, 42, 46, 50, 54, 56, 58, 60, 61, 63, 66, 69-72,

77, 79, 80-82, 87, 88, 89, 90, 93, 95).

There probably are some economies associated with operating and

marketing Mt. Cranmore together with ASC's other ski resorts. But most

relevant economies of scale, such as large-scale purchasing of lifts

and equipment and sharing overhead and administrative staff, also can

be obtained if Cranmore is purchased by another owner that operates

multiple ski resorts. Economies of scale associated with being part of

a larger organization are not unique to ASC, and there is no reason to

think they will be lost as a result of a divestiture of Cranmore to

another operator with multiple resorts.

Regarding joint tickets for both Attitash and Cranmore, nothing

prohibits the new owner of Cranmore, for example, from entering into

joint ticket arrangements with Attitash or other ski resorts for

tickets that would be good at any of the cooperative resorts. Moreover,

if Cranmore and Waterville Valley were divested to the same buyer, the

new owner could offer a joint ticket to these two resorts. In the past,

sales revenues from one joint Attitash/Cranmore ticket has been at most

less than four percent of Cranmore ticket revenues. Only one percent of

Cranmore ticket purchasers have paid the nominal upgrade fee to be able

to ski Attitash. If anything, the lack of a joint ticket would seem to

hurt Attitash, not Cranmore, by this measure. Given the ability to

continue offering joint ticket arrangements with other resorts, the

separation of ownership of Attitash and Cranmore should not be a

significant factor in the decision to divest Cranmore.

It clearly advances the Department's goal that a financially strong

buyer with good management skills be found to purchase Mt. Cranmore.

The whole purpose behind the divestiture is to maintain Mt. Cranmore as

a healthy, vigorous, independent competitor to ASC. Such competition

should spur increasingly improved ski services and conditions while

maintaining competitive pricing. Although the Department cannot

guarantee the financial success of the new purchaser of Mt. Cranmore,

the Department does have experience in evaluating the strength and

potential success of prospective purchasers in consent decree cases

over the years, and believes it can do so in this case.

The Department recognizes that maintaining Mt. Cranmore as a

healthy, vigorous competitor not only is important to competition, but

also is very important to the citizens and businesses located near Mt.

Cranmore in the Mount Washington Valley. In performing a merger

analysis, the Department's responsibility is to prevent violations of

the antitrust laws and to preserve competition. The principle that

underlines the antitrust laws enacted by Congress is that vigorous,

free market competition is the best way to protect the economy. The

Department is not charged, and it would be beyond its appropriate

sphere if inquiry, to evaluate directly--and base its enforcement

decisions on--the economic impact of the collateral spending of

consumers in areas other than the product markets being investigated.

Rather, this interest is considered and protected indirectly by

protecting a competitive free market and, in the specific case of a

divestiture, in ensuring the viability of the divested assets as a

vigorous competitor. Preserving Mt. Cranmore as a vigorous competitor

is the essence of the relief sought in the consent decree; by

protecting competition, the proposed relief also should protect

collateral spending by consumers and the resulting local economic

vitality.

Whether Mt. Cranmore can survive as a strong competitor on a stand-

alone basis is one of the factors the Department will evaluate in

analyzing the suitability of potential purchasers. The proposed

divesture would allow Cranmore and Waterville Valley to be sold to a

single purchaser as one option. Moreover, the benefits that ASC brought

to Mt. Cranmore by investing in snowmaking equipment, and marketing

will enure to the benefit of the new purchaser and put Cranmore in that

much better position to be a strong competitor to ASC.

III. The Legal Standard Governing the Court's Public Interest

Determination

Once the United States moves for entry of the proposed Final

Judgment, the Tunney Act directs the Court to determine whether entry

of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C.

Sec. 16(e). In making that determination, ``the court's function is not

to determine whether the resulting array of rights and liabilities is

one that will best serve society, but only to confirm that the

resulting settlement is within the reaches of the public interest.''

United States v. Western Elec. Co., 993 F.2d 1572, 1576 (D.C. Cir.)

cert. denied, 114 S. Ct. 487 (1993) (emphasis added, internal quotation

and citation omitted).\5\ The Court should evaluate the relief set

forth in the proposed Final Judgment and should enter the Judgment if

it falls within the government's ``rather broad discretion to settle

with the defendant within the reaches of the public interest.'' U.S.

v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995). Accord United

States v. Associated Milk Producers, 534 F.2d 113, 117-18 (8th Cir.

1976), cert. denied, 429 U.S. 940 (1976).

---------------------------------------------------------------------------

\5\ The Western Electric decision concerned a consensual

modification of an existing antitrust decree. The Court of Appeals

assumed that the Tunney Act was applicable.

---------------------------------------------------------------------------

The Court is not ``to make de novo determination of facts and

issues.'' Western Elec., 993 F.2d at 1577. Rather, ``[t]he balancing of

competing social and political interests affected by a proposed

antitrust decree must be left, in the first instance, to the discretion

of the Attorney General.'' Id. (internal quotation and citation omitted

throughout), In particular, the Court must defer to the Department's

assessment of likely competitive consequences, which it may reject

``only

[[Page 56001]]

if it has exceptional confidence that adverse antitrust consequences

will result--perhaps akin to the confidence that would justify a court

in overturning the predictive judgments of an administrative agency.''

Id.\6\

---------------------------------------------------------------------------

\6\ The Tunney Act does not give a court authority to impose

different terms on the parties. See, e.g., United States v. American

Tel. & Tel. Co., 552 F. Supp. 131, 153 n. 95 (D.D.C. 1982), aff'd

sub nom. Maryland v. United States, 460 U.S. 1001 (1983)(Mem.);

accord H.R. Rep. No. 1463, 93d Cong., 2d Sess. 8 (1974). A court, of

course, can condition entry of a decree on the parties' agreement to

a different bargain, see, e.g., AT & T, 552 F. Supp. at 225, but if

the parties do not agree to such terms, the court's only choices are

to enter the decree the parties proposed or to leave the parties to

litigate.

---------------------------------------------------------------------------

The Court may not reject a decree simply ``because a third party

claims it could be better treated.'' Microsoft, 56 F.3d at 1461 n.9.

The Tunney Act does not empower the court to reject the remedies in the

proposed Final Judgment based on the belief that ``other remedies were

preferable.'' Id. at 1460. As Judge Greene has observed:

If courts acting under the Tunney Act disapproved proposed

consent decrees merely because they did not contain the exact relief

which the court would have imposed after a finding of liability,

defendants would have no incentive to consent to judgment and this

element of compromise would be destroyed. The consent decree would

thus as a practical matter be eliminated as an antitrust enforcement

tool, despite Congress' directive that it be preserved.

United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 151

(D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001

(1983) (Mem.).

Moreover, the entry of a governmental antitrust decree forecloses

no private party from seeking and obtaining appropriate antitrust

remedies. Defendants will remain liable for any illegal acts, and any

private party may challenge such conduct if and when appropriate. The

issue before the Court in this case is limited to whether entry of this

particular proposed Final Judgment, agreed to by the parties as

settlement of this case, is in the public interest.

Further, the Tunney Act does not contemplate judicial reevaluation

of the wisdom of the government's determination of which violations to

allege in the Complaint. The government's decision not to bring a

particular case on the facts and law before it at a particular time,

like any other decision not to prosecute, ``involves a complicated

balancing of a number of factors which are peculiarly within [the

government's] expertise.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985).

Thus, the Court may not look beyond the Complaint ``to evaluate claims

that the government did not make and to inquire as to why they were not

made.'' Microsoft, 56 F.3d at 1459 (emphasis in original); see also

Associated Milk Producers, 534 F.2d at 117-18.

Finally, the government has wide discretion within the reaches of

the public interest to resolve potential litigation. E.g., Western

Elec. Co., 993 F.2d 1572; AT&T, 552 F. Supp. at 151. The Supreme Court

has recognized that a government antitrust consent decree is a contract

between the parties to settle their disputes and differences, United

States v. ITT Continental Baking Co., 420 U.S. 223, 235-38 (1975);

United States v. Armour & Co., 402 U.S. 673, 681-82 (1971), and

``normally embodies a compromise; in exchange for the saving of cost

and elimination of risk, the parties each give up something they might

have won had they proceeded with the litigation.'' Armour, 402 U.S. at

681. This Judgment has the virtue of bringing the public certain

benefits and protection without the uncertainty and expense of

protracted litigation. Armour, 402 U.S. at 681; Microsoft, 56 F.3d at

1459.

IV. Conclusion

After careful consideration of these comments, the United States

concludes that entry of the proposed Final Judgment will provide an

effective and appropriate remedy for the antitrust violation alleged in

the Complaint and is in the public interest. The United States will

therefore move the Court to enter the proposed Final Judgment after the

public comments and this Response have been published in the Federal

Register, as 15 U.S.C. Sec. 16(d) requires.

Dated: October 16, 1996.

Respectfully submitted,

John W. Van Lonkhuyzen,

Barry L. Creech (D.C. Bar # 421070),

Attorneys, U.S. Department of Justice, Antitrust Division, 1401 H

Street, N.W., Suite 4000, Washington, D.C. 20530, Tel: 202/307-0001.

Certificate of Service

On October 16, 1996, I caused a copy of the United States' Response

to Public Comments relating to the Proposed Final Judgment (with the

comments) to be served by facsimile and first-class mail upon

defendants in this action. A courtesy copy (without the comments) will

be mailed to each commentor as soon as practicable.

Barry L. Creech

Appendix--Index of Public Comments and Responses

------------------------------------------------------------------------

Comment Response

------------------------------------------------------------------------

1. Mr. and Mrs. Barry Berkal........... II.D, II.G

2. Charles Peter Pinkham............... II.G.

3. Beth Lincoln........................ II.A

4. Dr. Theodore Goldberg............... II.G

5. Charlotte Emmel..................... II.G

6. Evelyn Whelton...................... II.G

7. Beverly Mellen...................... II.G

8. Lawrence Markey..................... II.D, II.G

9. Gary P. Farmer...................... II.E, II.G

10. Mr. and Mrs. Bradford L. Boynton... II.G

11. Bill Glenn......................... II.F

12. Herbert H. Whittemore.............. II.B, II.E, II.G

13. Mr. and Mrs. Bartram W. Bumsted.... II.D, II.G

14. Mr. and Mrs. Richard Check......... II.D, II.E, II.G

15. John E. Hogan...................... II.E, II.G

16. Lawrence Fouraker, Ph.D............ II.G

17. Mr. and Mrs. Thomas O'Connor....... II.D, II.G

18. Mr. and Mrs. Arthur J. Brissman.... II.G

19. Harold C. Fisher................... II.D, II.G

20. Professor Stephen F. Ross Not Applicable.

(withdrawn by commenter).

21. Bruce Todd......................... II.D, II.G

22. John D. Krebs...................... II.C, II.E, II.G

23. Richard J. Fraser.................. II.E, II.G

24. Stanley P. Wilson.................. II.G

25. Joseph C. Webb..................... II.D, II.E, II.G

26. Dan Robinson....................... II.B, II.E, II.G

27. Peter B. Ward...................... II.G

28. Dick Smith......................... II.G

29. Robert L. Johnson.................. II.G

30. Robert M. Weiss.................... II.D, II.G

31. Mr. and Mrs. Robert McManus........ II.G

32. Harry Stead........................ II.B, II.G

33. Sandra W. Dahl..................... II.B, II.D, II.G

34. Robert C. Peterson................. II.D, II.E, II.G

35. Mr. and Mrs. Richard Anthony....... II.G

36. Miriam Regan....................... II.G

37. John J. Reilly, Jr................. II.G

38. Jennifer K. Savoie................. II.G

39. Frank Murphy....................... II.G

40. Jean M. Lees....................... II.G

41. David S. Urey...................... II.C, II.D, II.G

42. Thomas A. Mulkern.................. II.G

43. Richard F. Surrete................. II.E, II.F, II.G

44. Ronald K. Moore.................... II.D

45. Capt. David E. Bartlett............ II.F

46. Mr. and Mrs. Robert M. Fisher...... II.G

47. Mr. and Mrs. Robert A. McDaniel.... II.D, II.E, II.G

48. Gilbert G. Mahau................... II.D, II.E, II.G

49. Robert and Joan Billings........... II.D, II.E, II.G

50. David A. Pope...................... II.D, II.G,

51. Janet Cooper....................... II.G

52. Jeff Barley........................ II.G

[[Page 56002]]

53. Robert S. Morrell.................. II.D, II.E, II.G

54. Roy A. Lundquist................... II.D, II.E, II.G

55. Mr. and Mrs. Richard O. Pinkham.... II.D, II.E, II.G

56. Cynthia A. Feltch.................. II.B, II.D, II.G

57. Harold Berk........................ II.D, II.E, II.G

58. Bob Kyle........................... II.E, II.G

59. James R. Lane...................... II.G

60. William J. Denning................. II.G

61. T.M. Egbert, Jr.................... II.E, II.G,

62. Henry DiRico....................... II.D, II.E, II.G

63. Mr. and Mrs. Fred Pereira.......... II.G

64. Richard F. Hickey.................. II.C, II.D, II.G

65. Miriam Regan....................... II.G

66. Sally Hindson...................... II.G

67. Dennis J. Holland.................. II.A

68. George J.R. Sauer.................. II.G

69. John C. Conniff.................... II.G

70. Charles Morse, Jr.................. II.D, II.G

71. Jack B. Middleton.................. II.D, II.G

72. Robert E. Adair.................... II.D, II.E, II.G

73. William D. Quinn................... II.A

74. Calvin J. Coleman.................. II.G

75. David S. Urey...................... II.E

76. Maryellen LaRoche.................. II.A

77. Cynthia B. Briggs.................. II.B, II.E, II.G

78. James H. Hastings.................. II.D

79. John B. Pepper..................... II.D, II.G

80. Priscilla Morse.................... II.D, II.G

81. Peter B. Edwards................... II.D, II.G

82. David Peterson..................... II.B, II.G

83. Miriam L. Regan.................... II.G

84. Mr. and Mrs. Robert Fisher......... II.E, II.G

85. Christropher J. Cote............... II.D, II.G

86. Mr. and Mrs. Ronald F. Cote........ II.D, II.G

87. Douglas C. Albert.................. II.G

88. Conrad Briggs...................... II.G

89. Richard A. Ware.................... II.B, II.D, II.G

90. Stephen P. Camuso.................. II.G

91. Dr. Alfred C. Peters............... II.G

92. Joan M. Moeltner................... II.G

93. Fred C. Anderson................... II.E, II.G

94. Ronald and Pamela Barber........... II.G

95. Honorable William E. Williams, Jr.. II.G

96. Mr. A.O. Lucy...................... II.G

97. Richard M. Chrenko................. II.A

98. ``Conway Report''.................. II.A, II.B, II.C, II.D, II.E,

II.F, II.G

------------------------------------------------------------------------

Public Comments

1. Mr. and Mrs. Barry Berkal, 1000 Paradise Road, PHR-West,

Swampscott, MA 01907

2. Charles Peter Pinkham, P.O. Box 543, Main Street, North Conway,

NH 03860

3. Beth Lincoln, Box 119, Bartlett, NH 03812

4. Dr. Theodore Goldberg, Box 283, North Conway, NH 03860

5. Charlotte Emmel, P.O. Box 117, Madison, NH 03849

6. Evelyn Whelton, P.O. Box 176, Madison, NH 03849

7. Beverly Mellen, P.O. Box 484, Intervale, NH 03845

8. Lawrence Markey, 66 Mountainvale Village, Center Conway, NH 03813

9. Gary P. Farmer, P.O. Box 56, Kearsarge, NH 03860

10. Mr. and Mrs. Bradford L. Boynton, Shapleigh House, Box 236,

Jackson, NH 03846

11. Bill Glenn, P.O. Box 310, North Conway, NH 03860

12. Herbert H. Whittemore, P.O. Box 204, Intervale, NH 03845

13. Mr. and Mrs. Bartram W. Bumsted, The Bumsted Agency, Box 1850,

Conway, NH 03818

14. Mr. and Mrs. Richard Check, Country Cabinets, etc., 95 East

Conway Road, Box 3240, North Conway, NH 03860

15. John E. Hogan, P.O. Box 488, Intervale, NH 03845

16. Lawrence Fouraker, Ph.D., P.O. Box 726, Intervale, NH 03845

17. Mr. and Mrs. Thomas O'Connor, RR1 Box 216, Albany, NH 03818

18. Mr. and Mrs. Arthur J. Brissman, P.O. Box 1085, Glen, NH 03838

19. Harold C. Fisher, Loon Watch Point, Box 1187, Conway, NH 03818

20. Stephen F. Ross (withdrawn by commenter), Professor of Law,

University of Illinois, College of Law, 504 E. Pennsylvania Avenue,

Champaign, IL 61829

21. Bruce Todd, P.O. Box 249, Bartlett, NH 03812

22. John D. Krebs, Planning & Economic Development Director, Town of

Conway, P.O. Box 70, Center Conway, NH 03813-0070

23. Richard J. Fraser, 3 Applewood Lane, Franklin, MA 02038

24. Stanley P. Wilson, P.O. Box 328, Intervale, NH 03845

25. Joseph C. Webb, P.O. Box 2153, North Conway, NH 03860

26. Dan Robinson, 526 Ocean House Rd., Cape Elizabeth, ME 04107

27. Peter B. Ward, 60 Bridge Street, Manchester, MA 01944

28. Dick Smith, P.O. Box 300, Crestwood Drive, North Conway, NH

03860

29. Robert L. Johnson, Robert L. Johnson, CPA & Associate, Route

16A, RR1, Box 6, Intervale, NH 03845-9503

30. Robert M. Weiss, P.O. Box 680, Route 302, North Conway, NH

03860-0680

31. Mr. and Mrs. Robert McManus, P.O. Box 516, Jackson, NH 03846

32. Harry Stead, 7 Glen Ellis Road, Glen, NH 03838-1268

33. Sandra W. Dahl, P.O. Box 789, Glen, NH 03838

34. Robert C. Peterson, Box 473, Glen, NH 03838

35. Mr. and Mrs. Richard Anthony, 3 Concannon Rd., Kingston, NH

03848

36. Miriam Regan, P.O. Box 345, Intervale, NH 03845

37. John J. Reilly, Jr., Vice President, College Advancement, Saint

Anselm College, 100 Saint Anselm Drive, Manchester, NH 03102-1310

38. Jennifer K. Savoie, P.O. Box 715, 17 Skyline Drive, Intervale,

NH 03845

39. Frank Murphy, 1 Yellow Brick Road, North Conway, NH 03860

40. Jean M. Lees, P.O. Box 364, North Conway, NH 03860

41. David S. Urey, Tech Works, 15 Kancamagas Estates, P.O. Box 337,

Conway, NH 03818

42. Thomas A. Mulkern, 4 Cortland Lane, Lynnfield, MA 01940

43. Richard F. Surrete, P.O. Box 31, Freedom, NH 03836

44. Ronald K. Moore, P.O. Box 349, Chocorua, NH 03817-0349

45. Capt. David E. Bartlett, P.O. Box 1044, North Conway, NH 03860

46. Mr. and Mrs. Robert M. Fisher, 615 Potter Road, Center Conway,

NH 03813

47. Mr. and Mrs. Robert A. McDaniel, 19 Belleview Ave., Marlboro, MA

01752

48. Gilbert G. Mahau, P.O. Box 278, Kearsarge, NH 03847

49. Robert and Joan Billings, P.O. Box 126, Jackson, NH 03846

50. David A. Pope, Box 120, Kearsarge, NH 03847

51. Janet Cooper, 45 Plainfield St., Waban, MA 02168

52. Jeff Barley, no address given

53. Robert S. Morrell, Storyland, P.O. Box 1776, Glen, NH 03838

54. Roy A. Lundquist, 1 Wildflower Trail, Village at Kearsage,

Kearsarge, NH 03847-0196

55. Mr. and Mrs. Richard O. Pinkham, 44 Powers Road, Concord, MA

01742

56. Cynthia A. Feltch, P.O. Box 40, Bartlett, NH 03812

57. Harold Berk, Signature Breads, 300 Middlesex Avenue, Medford, MA

02155

58. Bob Kyle, Bartlett, NH 03812

59. James R. Lane, P.O. Box 485, Jackson, NH 03846

60. William J. Denning, P.O. Box 704, Intervale, NH 03845

61. T.M. Egbert, Jr., P.O. Box 448, Glen, NH 03808

62. Henry DiRico, 774 Norfolk Street, Mansfield, MA 02048

63. Mr. and Mrs. Fred Pereira, 392 Brenda Lane, Franklin, MA 02038

64. Richard F. Hickey, 9 Metcommet Road, Scituate, MA 02066

65. Miriam Regan, P.O. Box 345, Intervale, NH 03845

66. Sally Hindson, 1640 Plaintiff Pike, Cranston, RI 02920-1320

67. Dennis J. Holland, Marcia A. Burchstead, 35 Skyline Drive, P.O.

Box 826, Intervale, NH 03845

68. George J.R. Sauer, 45 Fuller Street, Dedham, MA 02026

69. John C. Conniff, 157 Pleasantview Avenue, Longmeadow, MA 01106

70. Charles Morse, Jr., 19 Green Street, Newbury, MA 01951

71. Jack B. Middleton, McLane, Graf, Raulerson & Middleton, Nine

Hundred Elm Street, P.O. Box 326, Manchester, NH 03105-0326

72. Robert E. Adair, 150 Old Westside Road, North Conway, NH 03860

73. William D. Quinn, P.O. Box 21, Madison, NH 03849

74. Calvin J. Coleman, Alvin J. Coleman & Son, Inc., RR 1, Box 120,

Route 16, Conway, NH 03818

75. David S. Urey, TechWorks, 15 Kancamagus Estates, P.O. Box 337,

Conway, NH 03818

76. Maryellen LaRoche, P.O. Box 110, 277 Stark Rd., Conway, NH 03818

[[Page 56003]]

77. Cynthia B. Briggs, Locust Hill, P.O. Box 427, North Conway, NH

03860

78. James H. Hastings, 55 Stetson Street, Bradford, MA 01835

79. John B. Pepper, P.O. Box X, Jackson, NH 03846

80. Priscilla Morse, 19 Green St., Newbury, MA 01951

81. Peter B. Edwards, P.O. Box 1915, North Conway, NH 03860

82. David Peterson, Glass Graphics, Inc., P.O. Box 1199, 56 Pleasant

Street, Conway, NH 03818

83. Miriam L. Regan, Box 345, Intervale, NH 03845

84. Mr. and Mrs. Robert Fisher, 615 Potter Road, Center Conway, NH

03813

85. Christopher J. Cote, 29 Essex Street, Lowell, MA 01850

86. Mr. and Mrs. Ronald F. Cote, 29 Essex Street, Lowell, MA 01850

87. Douglas C. Albert, President, Albert Farms/Maine Turf Company,

RR 1, Box 103, Fryeburg, ME 04037

88. Conrad Briggs, Locust Hill, Box 427, 267 Kearsarge Road, North

Conway, NH 03860

89. Richard A. Ware, Hurricane Mtn. Farmhouse, P.O. Box 310,

Intervale, NH 03845

90. Stephen P. Camuso, 14 Cranmore Circle, North Conway, NH 03818

91. Dr. Alfred C. Peters, Topnotch, P.O. Box 536, Glen, NH 03838

92. Joan M. Moeltner, National Federation of Independent Business,

600 Maryland Avenue S.W., Suite 700, Washington, D.C. 20024

93. Fred C. Anderson, General Manager/CEO, New Hampshire Electric

Cooperative, Inc., RR#4, Box 2100, Tenney Mountain Highway,

Plymouth, NH 03264-9420

94. Ronald and Pamela Barber, 364 Thompson Road, North Conway, NH

03860

95. Honorable William E. Williams, Jr., House of Representatives,

State of New Hampshire, Committee on Resources, Recreation and

Development, State House, Concord, New Hampshire 03301

96. Mr. A.O. Lucy, Executive Director, Mount Washington Valley

Chamber of Commerce & Visitors Bureau, P.O. Box 2300, North Conway,

NH 03860

97. Richard M. Chrenko, P.O. 913, West Side Road, Glen, NH 03838-

0913

98. ``Conway Report'', Mt. Washington Valley/Mt. Cranmore Task

Force, James B. Somerville, Chairman, Town of Conway, P.O. Box 70,

Center Conway, NH 03813-0073

The Berkals

June 18, 1996.

Anne K. Bingaman,

U.S. Assistant Attorney General, Anti-Trust Division, Justice

Department, Washington, DC 20530

Dear Madam: We sincerely hope that you do not force America

Skiing to sell Mt. Cranmore.

We have been skiing there for well over twenty years, and no

other owner has done as much to improve the skiing at this area. We

were absolutely delighted with the improvements made last year. The

interchangeable ticket between Attitash and Cranmore is a great draw

for tourists. I trust that you are aware that Mt. Cranmore was for

sale for some time before it was purchased by LBO.

This section of New Hampshire has other areas which provide

competition within a reasonable driving distance, such as Black

Mountain, Wildcat Mountain, Bretton Woods, Loon, King Pine and

Shawnee Peak, all within a fifteen to forty-five minute drive.

We were all justifiably enthused when LBO Resort Enterprises

bought Mt. Cranmore, and we trust that the decision to force the

corporation to dispose of Mt. Cranmore will not be enforced, as we

feel it is not in the best interest of the public or the community.

Yours very truly,

Betty Berkal, etc.

Pinkham Real Estate

June 18, 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street, NW., Washington, DC 20530

Dear Mr. Conrath: I was horrified to hear the news that Les

Otten has been ordered to sell Cranmore Mountain Ski Area. Cranmore

is the life blood of our economy here in North Conway and the

keystone to Mt. Washington Valley. It is the thread by which North

Conway's economic health hangs. As a ski area, it is completely

incapable of standing alone in today's ski market. Past performance

has already proven that. Forcing it to do so again means disaster,

not just for Cranmore, but for this town.

Cranmore isn't a Fleet Bank or Bank of Boston that apparently

can merge without protest. It isn't even a Stowe or a Sugarbush, or

indeed a Waterville Valley among ski areas. It's a little hill with

wide slopes and pleasant trails and a verticle drop that poses no

competitive threat to ski areas such as these. However, it happens

to be located right in North Conway village, which feels its every

economic shiver. For the past seven years this village has been

freezing.

After a year of LBO's management, when Cranmore and North Conway

finally felt a resurgence of business, what kind of unconscionable

bureaucracy is this that would shove this unassuming little business

back out in the cold and imperil the lives and jobs of an entire

town? If it is fear of the merged firm raising prices, don't they

realize Cranmore as an independent business would have to raise

prices to afford the kind of continuing capital investment,

management and marketing dollars necessary to offer skiers a

competitive product? A bit of history may serve to illustrate what

this business means to the town.

Cranmore was founded in the late 1930s by Harvey Gibson, a local

boy who had made good, not to show a profit, but to return something

to his home town. During the three decades that followed--as with

most businesses heavily dependent on the weather--it was never a big

money maker, but it was able to pay its bills. However, in 1970 a

snow drought forced it to its knees. Skiers left for other areas

that had had the dollars for snow-making, or the size and altitude

not to require it. The town responded. Over 100 people, most from

this little village of 2,500, put down hard earned dollars to enable

the mountain to buy snow-making equipment. The Manchester Union

Leader headlined it as a town raising itself by its own bootstraps.

I was owner/operator of North Conway's Eastern Slope Inn at the

time, and I've never seen a community so aware of the importance of

one business to the economic future of all.

Since then, ski areas have required bigger and bigger

investments to stay competitive: partial snow making had to be

extended to 100% cover; T Bars had to become chair lifts; chair

lifts have had to become detachable quads; base stations--like the

historic one at Cranmore--have had to be modernized, and louder

marketing voices are needed to meet the increasing competition from

inexpensive package plans to the big areas in the Rockies and the

Alps. Nowhere is the major investment required by a business more

obvious and open to the buying public than in a ski area, where a

skier can tell within minutes whether or not its product is

competitive.

During recent years, Cranmore has been owned by people who just

wanted to say they owned a ski area. Like a yacht, if you had to ask

how much it cost, you couldn't afford it. Today's costs have removed

ski areas from the toy department. Without the assistance of a

larger organization, to take advantage of economy of scale, Cranmore

is doomed. And so is the village and town around it.

This past year of LBO ownership has rejuvenated our local

economy. From 1990 to 1993 I was President of the Mt. Washington

Valley Chamber of Commerce, which doubles as our regional marketing

organization. For most of that period Cranmore existed at the

pleasure of the banks, as did much of the town. Though blessed with

a historically faithful clientele, skiers could no longer resist the

lure of areas with bigger, faster and more modern equipment. LBO

changed that. In my real estate business I have been able to observe

the LBO effect perhaps more closely than most. I've seen people

buying here this year with confidence again in Cranmore's future.

And North Conway's. That can all end if this decision is allowed to

stand.

The decision to make LBO divest of Cranmore must have been made

solely by mathematics: LBO has such and such percentage of the

market, therefore it must be harmful to the ski industry and/or

skiers. Believe me when I say, should the ruling be enforced, a

whole town will suffer.

I would ask those that made the ruling visit the elephants of

the American and Canadian skiing west and then take a look at the

little mouse-like knoll we call Cranmore.

Sincerely,

Charles Peter Pinkham.

cc: Congressman Bill Zeliff

Beth C. Lincoln

June 21, 1996.

Dear Mr. Conrath: I am very much in favor of the Justice

Department's action to force the sale of Mt. Cranmore by Les Otten.

LBO is only interested in profit, and apparently has no concern

for people or the community. He has clearly demonstrated

[[Page 56004]]

this, and his lack of integrity, by his actions at Athtash-Bear

Peak. He attempts to manipulate the community by deceit and smooth

talking. He charges premium prices and pays almost minimum wages (as

well as no benefits, and hour by hour layoffs).

I am a very private person, & do not wish my name used publicly.

However, I did wish to express my approval of your action.

Sincerely,

Beth C. Lincoln,

Box 119, Bartlett, NH 03812, 603-374-6033

Dr. Theodore Goldberg

June 21, 1996.

Dear Mr. Conrath: I have not seen or felt such enthusiasm either

on Mt. Cranmore or in the Valley as was shown this past winter under

Les Otten's ownership.

My children & grandchildren learned to ski on Cranmore & we have

been dismayed at the determination over the past 15 years.

Since the Otten [mgmt] purchases the mountain a feeling of

revitalization has taken hold in the entire valley. If he is not

allowed to continue this progress the area will revert to lethargy.

Sincerely,

Dr. Theodore Goldberg,

Box 283, N. Conway, NH 03860

Charlotte Emmel

June 21, 1996.

Dear Mr. Conrath: This is to strongly urge that the Justice

Dept. reconsider its decision to force Les Otten of LBO Enterprises

to divest itself of Cranmore Mt. before SKI Limited can be acquired.

This news was devastating to this area (Mt. Washington Valley

where Cranmore is located in North Conway). For years Cranmore has

been steadily going down hill because the different owners simply

did not have the funds to improve the mountain to make it

competitive. This has cost many jobs and has had an effect on the

tourist industry which the area relies on. When LBO purchased

Cranmore last year, I believe everyone, without exception, was

overjoyed--residents of the area and skier visitors alike. He pumped

money into it and everyone was very excited about the plans he had

to further develop the mountain. You may be delivering a death blow

to the mountain if you carry through on forcing LBO to divest itself

of Cranmore--and I beg you to reconsider.

Sincerely,

Charlotte Emmel

Evelyn Whelton

June 21, 1996.

Craig W Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H St., NW., Washington DC 20530

Re: Divesting, Cranmore Mountain, North Conway, NH

You are dealing with a ski resort in New Hampshire, that was

dying and bringing the town down with it. We finally found someone

that was willing to make a commitment to all of us and make this the

first rate ski area it used to be.

The bottom line here is this:

The future of the New Hampshire Ski industry

The future of Mt. Washington Valley

The future of all who live here and struggle to make a living

Please look this over again and I am sure you will recognize

that as a small community we can only benefit letting LBO keep

Cranmore Mountain.

Thank you,

Evelyn Whelton,

PO Box 176, Madison, NH 03849.

Beverly Mellen

June 21, 1996.

Craig W Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H St., NW., Washington, DC 20530

Re: Divesting, Cranmore Mountain, North Conway, NH

You are dealing with a ski resort in New Hampshire, that was

dying and bringing the town down with it. We finally found someone

that was willing to make a commitment to all of us and make this the

first rate ski area it used to be.

The bottom line here is this:

The future of the New Hampshire Ski industry

The future of Mt. Washington Valley

The future of all who live here and struggle to make a living

Please look this over again and I am sure you will recognize

that as a small community we can only benefit by letting LBO keep

Cranmore Mountain.

Thank you,

Beverly Mellen,

PO Box 484, Intervale, NH 03845.

Lawrence Markey

June 21, 1993.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street, Washington, DC 20530

Dear Sir: I am writing regarding the Justice Department's

decision to require the LOB holdings to sell the Cranmore Ski areas

in North Conway, NH particularly. The past year of ownership, LOB

has not only turned around the flagging ski area but has done a

great deal for the Mount Washington Valley area. To require the sale

of this area by a courageous true entrepreneur would be disastrous

for the community. He has plans far beyond the ski area that can

only benefit this area. Reading about this action I have noted that

currently LOB owns a mere 25% of the Northeast ski industry and 6%

of the national ski industry. This hardly constitutes a monopoly.

I desperately ask that you reconsider the demanded sale of Mount

Cranmore ski area. I am a skier and resident of the Mount Washington

Valley area and fully support what LBO has planned for this area.

Please Reconsider and Reverse Your Decision.

Lawrence Markey

ccs: Rep. Bill Zeliff

Sen. Judd Gregg

Sen. Robert Smith

Gary P. Farmer

June 21, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street, NW., Washington, DC 20530.

Dear Mr. Conrath: I am writing to ask your assistance in

reversing the senseless bureaucratic decision by the U.S. Department

of Justice forcing the divestiture of Cranmore Mountain by LBO

Enterprises.

As a neighbor to Cranmore and long time skier of New Hampshire

mountains including others owned or to be owned by LBO, I do not

believe the Antitrust Division understands the status of the ski

industry in New Hampshire nor the decline of Cranmore Mountain until

it was purchased by LBO this past ski season.

I do appreciate the mission of the Antitrust Division and its

role in maintaining completion and protecting the consumer, but this

is a case where allowing the consolidation to proceed will do just

that.

I say this because economies of scale in the ski industry are

necessary to reduce overall operating costs in an industry where

skyrocketing ticket prices in recent years have forced many families

to give up this recreational opportunity.

Cranmore is unique. It's place in history has been documented

but it's importance to the local economy is less well known. As a

local businessman in North Conway, I can assure you that the decline

of Cranmore had a significant impact on State tax revenues and local

incomes. This past year, with the substantial investments made by

LBO in Cranmore, this situation has turned around. The business

community showed their enthusiasm for and confidence in LBO by

planning additional economic expansion. This has been destroyed by

the Justice Department's proposed consent order.

I do not believe the Antitrust Division understands that New

Hampshire ski areas compete regionally within the state namely the

Sunapee, Franconia and Mt. Washington Valley regions. Geographic

distances and natural obstructions define these regions. Therefore

skiers choose a region first then a ski area within that region. If

Justice understood this, then they would know that the number of

areas owned by American Ski Company (LBO) only affects the economies

of scale and marketability of the areas, it does not diminish

competition. The exception would be owning multiple areas within the

same region. This does occur since Attitash and Crandmore are within

Mt Washington Valley.

However, LBO owned both there areas one season prior to the

merger and all areas within the region flourished. Wildcat Mountain

reported a 30% increase in skier visits, Black Mountain successfully

emerged from bankruptcy and for the first time in a long time, all

areas in the region were profitable. The reason is that LBO has

breathed new life with the region because of their investments in,

marketing of, and commitment to the Valley. These areas do not

compete on price. Each has established

[[Page 56005]]

its own niche based on terrain, amenities, teaching techniques and

size. Each has successfully marketed itself by aiming at its niche

demographics.

The bottom line is that the Department of Justice does not

understand the ski business in New Hampshire and I am asking that

you review the Consent Order and avoid making a mistake which will

have an adverse affect on the consumer and the general economy of

the region.

Thank you for your consideration. If you would like to discuss

this further please feel free to contact me at the above address.

Very truly yours,

Gary P. Farmer

cc: Congressman Bill Zeliff

Senator Judd Gregg

Senator Bob Smith

Mrs. Bradford Lewis Boynton

June 21, 1996.

Craig W. Conrath,

Chief of Merger Task Force, Anti-Trust Div., US D.O.J., 1401 H St

N.W., Washington DC 20530.

Dear Mr. Conrath: We were horrified to read our local papers

that the Justice Dept. is forcing L.B.O. to sell Cranmore Mt., a ski

resort in our village of No. Conway, so they have demanded that to

our several if not many Ski Resorts or Areas is a monopoly. Ski

business is not AT&T or any other large enterprize. It is a highly

expensive recreational operation of making, snow trails and skiers,

and getting people to use your mountain. It does not depend upon a

monopoly of areas but on incredible know-how. In the case of

Cranmore Mt., never has it been such excellent skiing as this year

under LBO and the little town of North Conway would be a winter

ghost town without Les Otten. He is a skier. He knows the ski area

business. Please, please rescind this foolish order of having to

sell out. We have skied at Cranmore since it opened in 1939 and we

know how badly off Cranmore Mt. got before Les Otten put his know

how to this area.

Sincerely,

Carol J. Boynton

Bradford L. Boynton

Bill Glenn

Craig W. Conrath,

Chief of Merger Task Force, AntiTrust Division, US DOJ, 1401 H

Street, NW., Washington, DC 20530.

Re: Justice v. LBO Enterprises

Dear Mr. Conrath: It does not help competitiveness in the skiing

industry to force LBO to give up their two weakest properties.

Sunday River and Killington would be far better choices. LBO should

be required to keep Cranmore for ten years.

There is a philosophy that says if one is going to be inspected,

provide something pleasant for the inspector to find so he will not

discover an unpleasant something else. Using this philosophy, LBO

could have acquired Cranmore just to have something to give up to

the Justice Department.

Sincerely yours,

Bill Glenn

Herbert H. Whittemore

June 21, 1996.

The Honorable Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street, Northwest, Washington, D.C. 20530.

Dear Mr. Conrath: I am writing to object in the strongest

possible way to your decision requiring Mr. Leslie B. Otten's LBO

Enterprises to divest Cranmore Mountain Ski Area in North Conway,

N.H., and Waterville Valley Ski Area in Waterville Valley, N.H., in

order to merge with SKI Limited.

I disagree with your apparent premise that Mr. Otten, by owning

three ski areas in New Hampshire, could monopolize ski ticket prices

or packages, harming skiers or competing ski areas.

I know you and your staff are concerned with the common good of

all parties: The skiers of New England, other ski areas, as well as

Mr. Otten and his employees. And I thank you for that!

But I contend that allowing Mr. Otten to retain control of

Cranmore and Waterville is crucial to skiers, to the economy of the

Mount Washington Valley, Conway, N.H., and Waterville, N.H.

As you may know, Cranmore was in bankruptcy or losing money for

the better part of a decade before Mr. Otten took over and turned

the area around with a huge investment in lift, snowmaking and other

equipment. Thanks to him, the mountain is recovering, skiers had a

great year, and valley communities benefited greatly. I must point

out that Cranmore is an economic linchpin and recreational jewel in

Conway, N.H.

Mr. Otten rescued Cranmore, as he did Attitash Ski Area in

neighboring Bartlett, N.H. I believe that Mr. Otten is good for

skiing--no, make that great for skiing and for skiers!

That conclusion is based on 41 years of skiing; I first strapped

on skis in 1954 at Cranmore and I've been going downhill ever since.

I am a retired newspaper editor and wrote twice-weekly winter ski

columns for the Lawrence (Mass.) Eagle-Tribune for 17 years.

I recall interviewing Mr. Otten in 1980 for a column when he

bought and began developing Sunday River Ski Area in Maine. Then, it

was a minuscule area. Today, it is simply the best; a jewel in the

Maine economy; a wonderful playground for skiers.

In that 1980 interview, Mr. Otten laid out a projection of what

he hoped to do with Sunday River. I went away from that interview

trying to keep my objectivity intact, but torn between wondering

whether Mr. Otten was a ski visionary or just spouting pipe dreams.

Well, let me tell you that those plans for Sunday River have all

come true, and much, much more!

Quite simply, I believe Mr. Otten is the most exciting and best

thing that I have witnessed in my 41 years of skiing.

It would be a sad and harmful thing, indeed, to deny Cranmore

and Waterville their opportunity to be part of Mr. Otten's dynamic

plans for skiing. And it will most certainly harm the economies of

their communities and the many employees of the two areas because,

without Mr. Otten, they are likely to slide back into bankruptcy.

It has been my observation that Mr. Otten's way of doing

business is NOT financially harmful to the price of lift tickets.

His way of doing business is simply better than that of other areas.

He makes lots of snow, keeps making it to improve conditions, runs

his areas with great care and concern.

Skiing, by its very nature, is an expensive sport. A skier's

personal equipment is costly. A well-equipped skier can be wearing

anywhere from $1,000 to $3,000 in gear. So, too, are lodging, meals,

and transportation. The point I am trying to make is that the price

of a lift ticket is a relatively small part of the individual

skier's cost.

It is doubtful, in my mind, that, with three ski areas in New

Hampshire, Mr. Otten could monopolize the ski industry in the

Granite State. In fact, I believe that by depriving him of the right

to run Cranmore and Waterville, you will be hurting the economy of

New Hampshire (where tourism is the Number 2 industry). You will be

hurting skiers, because, clearly, no one provides better skiing

conditions than Mr. Otten.

That is one skier's view of the situation. I hope that by

sharing it with you, you may reconsider your earlier action and

change your position regarding divestiture. I thank you for your

patience in considering these remarks.

I should say that I have no connection with LBO Enterprises or

SKI Limited. I am simply a retired newsman living in the Mount

Washington Valley and loving the skiing at Attitash Bear Peak

Cranmore and Sunday River. And I am thankful for brilliant men like

Mr. Otten and Mr. Phil Gravink, the masterful CEO of Attitash Bear

Peak Cranmore. And that is why I write.

Sincerely,

Herbert H. Whittemore,

P.O. Box 204, Intervale, N.H. 03845.

The Bumsted Agency

June 21, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Re: Mount Cranmore Ski Area, North Conway, NH 03860.

Dear Mr. Conrath: I was very upset to hear that the Justice

Department was requiring LOB Enterprises to divest itself of

Cranmore and Waterville Valley.

As a resident of Kearsarge (a suburb of North Conway) I am

primarily concerned with Mount Cranmore. This mountain has been

through a great deal since I moved here in 1973. When Les Otten

purchased it and started to pour money into it, it seemed that at

last its troubles were over.

It makes little sense to me to prohibit LBO from owning Cranmore

because of the possibility of lack of competition. We have a number

of other ski areas in the Valley should Mr. Otten elect to make his

prices non-competitive. Wildcat, Black Mountain, and King Pine all

offer a variety of skiing for all abilities.

[[Page 56006]]

Although I can see the need for monitoring corporations which

supply goods to the public to keep competition alive, I feel that,

in this case, which covers a recreational situation, the Justice

Department has over-stepped its bounds.

Sincerely yours,

Bartram W. Bumsted

Country Cabinets, etc.

June 21, 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Dear Mr. Conrath: The forced divestiture of LBO's ownership of

Mt. Cranmore and Waterville Valley as a condition required by the

DOJ for it to allow the merger of LBO Enterprises and S-K-I Ltd. has

the potential of having a very negative impact on our town and its

business climate.

The analysis of the situation seems to be flawed in the

assumption that LBO would have a monopoly thus eliminating a

competitive environment for the consumer. LBO knows, however, that

it is dealing with a savvy consumer and that charges can be only

what the market will bear. Although LBO currently owns Attitash/Bear

Peak/Cranmore, the daily ski rates are different at each mountain.

Each area has different amenities that dictate charges accordingly.

There are also other mountains in the immediate area which offer

alternatives of price as well as types of skiing and snowboarding

experiences.

Being business owners in North Conway and members of many

organizations including the Mount Washington Valley Chamber of

Commerce, we can attest to the fact that LBO is very community

minded and has added greatly to the marketing of our ``Valley''. We

know that LBO is strong and that Cranmore will continue to thrive

under its involvement. Cranmore is a ski area that had no investment

for years and was deteriorating. Finally, along came LBO willing to

work hard and put money into making it a first-rate ski area! To

have another entity take over such an important facet in our town is

risky. We know and like what we currently have!

Lastly, we are very concerned about local jobs being affected by

this change. Our economy is mainly dependent upon tourism and LBO's

ability to market our area as a whole will certainly be diminished

with it's loss of Cranmore's income. Our Chamber has suffered over

the past 8 years due to a poor economic climate. LBO's marketing

efforts and support of the Chamber's marketing programs has been

much appreciated.

Please reconsider and reverse your requirement that LBO must

sell Mount Cranmore. Thank you for your consideration.

Sincerely,

Richard and Joy Check

Senator Bob Smith, Senator Judd Gregg, Congressman Charlie Bass,

Congressman Bill Zeliff.

John E. Hogan

June 22, 1996.

Craig W. Conrath,

Chief Merger Task Force, U.S. Dept of Justice, Washington, D.C.

Dear Mr. Conrath: I am writing re the recent decision re the

merger of LBO Enterprises & Ski LTD that they must sell off Cranmore

Ski Area in North Conway. This decision made, I'm sure, because they

also own Attitash/Bear Peak which is also in Mt. Washington Valley

area.

I'm just hoping that you will give this a bit more consideration

and possibly allow them to retain this property along with Attitash/

Bear Peak. Just a bit of history. Cranmore was the first ski area in

Mt. Washington Valley, it is located right in the center of town; it

is rather historic, especially to skiers, in that it had the first &

only Skimobile to get skiers to the top; it brought Hannes Schnieder

over from Austria to escape the Jewish situation ad he started one

of the first ski schools in U.S. introducing his new method of

teaching skiing. I sort of refer to it as the Lily of the Valley

when it comes to skiing.

Unfortunately in the past 10 or 12 years (or more) it was not

being cared for and was running down rather badly. It finally wound

up in the banks hands and they were doing nothing other than trying

to run it until they found a buyer. Within a year of buying

Attitash/Bear Peak Les Otten took over Cranmore and immediately

started pouring money into putting in a great new lift, much work on

trails, lodge building and snowmaking and making it once again a

focal point in the Valley.

He now runs two great areas in the Valley and has been benefit

to the Valley. There is another major ski area about 20 miles from

North Conway known as Wildcat. I understand your concern re

competition & pricing but this is a perfect example that he is not

out to destroy anyone. Because of the extensive advertising that LBO

Enterprises does Wildcat benefited, as did the Valley as a whole, so

much so that Wildcats receipts were up almost 30% this past season.

(It helped that because of the competition they were also forced to

finally do some upgrading to their area!) Les Otten, it seems does

not compete by price, but rather feels it more important to give

value for what he charges.

Wildcat's prices are lower, especially weekdays & Sundays and

they have 2 for 1 specials on Wednesdays. Les Otten has never tried

to compete with that it seems. He just seems (I do not know the man

nor have I seen him) to try to be fair. I have a lifetime pass at

Attitash and when he took over, there was some concern that they

would continue to be honored. It turned to be not a problem at all

and we were even extended the right to also ski Cranmore on our

pass, something he definitely did not have to do.

I'm just afraid that if he is forced to sell Cranmore that it

will once again go into a nose-dive and may wind up closing. That

would be a terrible, terrible loss to the Valley and, from my

viewpoint, an historic loss.

I just don't believe that owning the two areas here puts him in

an extraordinary competitive position. This is just a case where LBO

Enterprises is truly good for Mt. Washington Valley and GREAT for

Cranmore.

I for one hope that you will reconsider your position on this

matter. Thank you for your time in reading this letter.

Sincerely,

John E. Hogan,

PO Box 488, Intervale, NH 03845.

Lawrence Fouraker

June 22, 1996.

Mr. Craig W. Conrath

Chief, Merger Task Force, Antitrust Division, US Department of

Justice, 1401 H Street NW., Washington DC 20530.

Dear Mr. Conrath: We are presently full-year residents of the

Mount Washington Valley, New Hampshire. (Next year we will be

weekend visitors, as I will join the faculty at Wellesley College.)

I am writing to protest the foolish and incomprehensible antitrust

ruling against Mr. Les Otten of LBO Enterprises. Last winter we had

season passes that were valid at both Mr. Cranmore and Mt. Attitash/

Bear Peak. Far from being anti-competitive, it is a great boon to

both areas to have interchangeable tickets.

We are also far from sanguine that another owner will prove able

to continue Les Otten's multimillion dollar investment program that

turned Cranmore from a run-down, struggling area threatened several

times with bankruptcy into an exciting fairly-centered tourist draw

for the businesses in the area. Wildcat is a potential buyer, but

they have hardly maintained equipment and facilities there, and I

don't see how they can do so at Cranmore. Thus, your decision may

well push a recovering ski area right in the middle of our community

back into financial trouble and possible bankruptcy. That would

certainly not stimulate competition. I have studied economics at the

graduate level and am well aware of the benefits of a competitive

marketplace. The airline industry and the telecommunications field

are two clear examples where consumers--and the U.S. economy--have

benefitted from the actions of your colleagues. But alpine skiing in

New England is clearly not such a case. The many happy customers of

Mr. Otten--and, surprisingly enough, every single employee I have

spoken with--implore you to reverse this stupid ruling.

Lawrence Fouraker, Ph.D,

P.O. Box 726, Intervale, NH 03845.

Thomas L. & Grace N. O'Connor

June 23, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, US Department of

Justice, 1401 H. Street NW., Washington, DC 20530.

Dear Sir: We are asking the Department of Justice to reconsider

its recent decision in the matter of the merger LBO Industries and

SKI Ltd. that requires LBO Enterprises to divest from its holdings

The Cranmore Mountain Ski Area. We feel this would have a negative

impact on the quality of skiing available in the Mount Washington

Valley as well as on the local economy.

Within an approximate 40 mile radius of North Conway, where

Mount Cranmore is situated, there are seven ski areas, only two

which would be owned by LBO Enterprises. This is surely a very

competitive market.

In the year of ownership under LBO Enterprises, the skiing

improved dramatically

[[Page 56007]]

and has never been better in the previous 25 years we have skied the

mountain. Without the financial backing available to a large and

successful operator in the ski business we feel the viability of

Cranmore is in jeopardy. Further improvements planned by LBO will

not be forthcoming, the business will fail and competition will be

reduced.

Sincerely yours,

Thomas L. O'Connor

Grace N. O'Connor

cc: Representative William Zeliff,

Senator Robert Smith,

Senator Judd Gregg.

Arthur J. Brissman and Barbara A. Brissman

June 23, 1996.

Craig W. Contrath,

Chief, Merger Task Force, Antitrust Division, US Department of

Justice, 1401 H. Street NW., Washington, DC 20530.

Dear Chief Conrath: The 1995-1996 Ski season at Cranmore

Mountain, No. Conway, New Hampshire was the very best skiing we have

had for a long long time.

The upkeep and economic worth of Mt. Cranmore had been on a

serious decline for the past several years and now, finally, in

1995, LBO, Les Otten, purchased the mountain and put money into it.

Even though he has been involved for only a year now, we, the

community, have already seen the value of commitment from somebody

willing to make Mt. Cranmore and the Mt. Washington Valley a first-

rate ski area.

Needless to say, we are devastated to learn that Mr. Otten has

been instructed to divest Mt. Cranmore in order to acquire SKI

Limited. We, among many, believe this would be a serious mistake and

are concerned about Cranmore's future if LBO is forced to sell the

mountain.

It is our most urgent request that you reconsider and reevaluate

your directive that LBO must sell Cranmore Mountain.

The merchants, innkeepers, and all of us dedicated skiers

believe the future growth and return of a strong economy in this

area depend on your revised decision to allow LBO to continue with

his plans and improvements in the Mt. Washington Valley.

This letter is respectfully submitted and thank you for your

attention to this matter.

Very truly yours,

Arthur J. Brissman

Barbara A. Brissman

Harold C. Fisher

June 23, 1996.

Re: Cranmore Mtn.--LBO Holdings

Dear Mr. Conrath: I am writing you in regard to your decision to

force LBO Holdings to sell Cranmore Mtn. because of the potential

for price fixing. While I can understand this possibility to some

extent, I think you should consider more carefully the ``big

picture''.

Cranmore has always been a good ski area because of its location

near the center of town. The previous owners weren't able or willing

to invest sufficient capital in the mountain to make it a profitable

enterprise. Because of the limited size of the mountain, I think it

requires a tie-in with another ski area in order to make it viable.

LBO did this. They installed a new high speed chair lift and made

the tickets interchangeable with Attitash, just 20 minutes away. As

a result, business boomed last year and the valley benefited

greatly. The point I want to make is that whatever risk may be

involved with price fixing, I believe is overshadowed by the

benefits to the town and valley by having Cranmore a successful ski

area.

Wildcat Mtn. is an excellent ski area, only about 40 minutes

from Cranmore. King Pine and Black Mtn. are smaller ski areas

nearby. Competition from these mountains should help to keep prices

in line.* LBO is doing a first class job in promoting skiing in our

area and the economic benefits are widespread. Before you definitely

decide to force the sale, I hope you will give full consideration to

the impact on our local economy.

Sincerely,

Harold C. Fisher.

*P.S. I forgot to mention Bretton Woods and Shawnee Peak are \1/

2\ hour from Cranmore.

The letter from Professor Stephen F. Ross was withdrawn by

commentor.

The letter from Bruce, Patricia and Carolyn Todd was not able to be

reprinted in the Federal Register, however, it may be inspected in

Suite 215, U.S. Department of Justice, Legal Procedures Unit, 325 7th

St., N.W., Washington, D.C. at (202) 514-2481 and at the Office of the

Clerk of the United States Court for the District of Columbia.

Town of Conway

June 24, 1996.

Craig W. Conrath,

Chief, Merger Task Force, Anti-Trust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Re: LBO/SKI Ltd Merger; Cranmore divestiture.

Dear Craig: This letter is in reference to the forced

divestiture of Cranmore from LBO/SKI Ltd, to be known as the

American Ski Company, by the U.S. Justice Department. The Justice

Department's requirement that LBO/SKI Ltd sell Cranmore as part of

the merger of the two companies will cause a tremendous decline in

the alpine ski industry and in the local and regional economies of

Conway and the Mount Washington Valley.

As the Planning & Economic Development Director for the Town of

Conway, I can assure you that last years' purchase of Cranmore by

LBO was met with extreme enthusiasm by the Town of Conway as well as

the towns surrounding Conway. Understand that Cranmore is a very

small, family oriented ski resort; the likelihood of it succeeding

as a stand-alone resort would be slim at best. To date, LBO has

invested in excess of four million dollars into Cranmore, and had

plans for further expansion of both the skiing and resort amenities.

This past years' success at Cranmore was only made possible by the

ownership of the resort by LBO. Simply put, LBO has the means and

the experience to make Cranmore succeed.

Regarding the Justice Department's concern about the increase in

ticket prices as a result of the merger, the answer to the question

is very complicated. The merger of LBO/SKI may, in fact, cause a

reduction in ticket prices, as there is certainly an economy of

scale created by owning several mountains. Additionally, ticket

prices alone may not be a true reflection of what consumers are

getting for their money; for instance, LBO's vast expansion of

Attitash provided a great many additional skiing opportunities while

ticket prices rose only slightly. Lastly regarding unwarranted price

increases; alpine skiing has been, and may always be an expensive

form of winter recreation. If the merger of LBO/SKI results in a

significant ticket price increase, a great number of skiers will be

priced out of the market, an already small market, which will result

in a decrease in company revenues. LBO has, and I believe will

continue to attract new participants to the sport by providing a

great product at prices which are competitive with other resorts,

and which are competitive with other winter recreation

opportunities.

Please reconsider your decision to force the sale of Cranmore,

it will devastate Conway's economy.

Thank you in advance for your time and consideration on this

very important matter.

Yours sincerely,

John D. Krebs,

Planning & Economic Development Director.

Richard J. Fraser

Craig W. Conrath,

Chief, Merger Task Force, Anti-trust Division, U.S. Dept. of

Justice, 1401 H Street N.W., Washington, D.C. 20530.

Dear Mr. Conrath: With regard to the merger of S-K-I Ltd. with

LBO Enterprises (American Skiing Corp.) I wish to register my

objection to the Justice Dept. requirement for divestiture of the

Waterville Valley and Cranmore ski areas as a condition for

approval. My objection is based on the following facts:

a. Both of these areas are most needful of major facility

upgrades, having recently gone through bankruptcy proceedings and

ownership changes. Each will be left to fend for themselves in a

market that demands large capital investments, solely the domain of

such large corporations as American Skiing, Interwest, ect.

b. The above named divestitures (especially Waterville Valley)

have slipped greatly in their total skier visits in the 1995-96

season, in spite of an excellent snow year, compared to other areas

due to the lack of upgraded facilities. It follows therefore, that

if major capital infusion is not forthcoming to improve the skiing

experience for the day/weekend skier, that the intent of the ruling

will be moot, with these areas not able to provide either an

affordable, or more important, quality skiing which is vital to this

high risk sport.

c. Beyond the affordable skiing factor involved in the ruling is

the economy of the surrounding communities, still struggling with

the real estate/economic downturn that has hit these two regions

hard. Forcing yet another change of owners will only delay

[[Page 56008]]

needed improvements, further eroding their attractiveness to these

very skiers that the Justice Dept. is trying to protect.

In light of these subjects, I maintain that this decision will

have just the opposite intended effects of providing skiers with

competitive rates. In the ski business, it is not just cost that

drives, but the quality experienced is every bit as important, as

most skiers would testify. A lower cost area with sub-standard

facilities would be a bad trade off with the likelihood of not

having the skier return, only to have the same person travel to the

higher ticket price area next time seeking superior facilities.

I ask that the Justice Dept. reconsider this ruling. New England

has lost numerous smaller affordable areas for the above reasons.

Please do not let these areas go the way of their predecessors.

Richard J. Fraser,

3 Applewood Lane, Franklin, Ma. 02038.

Stanley P. Wilson

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Dept of Justice,

1401 H Street NW., Washington, DC, 20530.

Re: Consent Decree.

Dear sir: Please do not force LBO to divest Cranmore Mountain or

Waterville Valley. At first, we too were doubtful of LBO's

intentions, and we were unsure of our town's future. However, in one

year, and with a huge investment, Cranmore showed a profit, summer

use is returning, and most importantly to us, local business is

booming.

The nature of the skiing business in the years ahead is about to

be defined by LBO, and, quite frankly I don't know what that

definition is, but it involves maximum use of our stores, our

lodging, our dining facilities. In short it brings business to us

and no one can do it as well as LBO.

Sincerely,

Stanley P. Wilson,

Box 328, Intervale, NH 03845.

Conway Seat Cover Company

June 25, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, U.S. Department of Justice.

Dear Mr. Conrath: I'm writing in response to the possible forced

sale of Waterville Valley and Cranmore Mt.

The idea that the retention of these area's by LBO Enterprises

would contribute to the monopolizying of the ski & snowboard markets

in these two area's is a real stretch.

Firstly, I would like to point out, as I'm sure others have,

that both of these areas are located quite near, by skier standards,

to many other area's.

Cranmore has Blade Mt., Shawnee Peak King Pine & Wildcat all

within a half hour drive.

Waterville has Gunstock, Cannon Mt., Loon (which is a huge

operation) and many areas to the south which have to be passed by

our southern N.E. Friends before that reach us.

Along with my full time business, which does not cater to the

tourist directly, I am a part time ski instructor working at

Attitash for LBO. I'm a member of the Professional Ski Instructors

of America and have been skiing in this Valley for almost 40 years.

I have been around to see many changes, most not good as the

skiing industry in this area has seen little growth and has been

going slowly downhill for years, (no pun intended).

In the short time LBO has been involved things have turned

around dramatically.

Will the cost of skiing go up? Probably but only in relations to

improvements.

Can he control pricing? I doubt it. The average skier can only

go so far in paying for this sport and he or she are about there.

The price controls in this sense are built in.

Give the business man in this area a break and leave things

alone. We need this company, he is successful and success breeds

success.

As I mentioned I don't deal directly with the tourists, but my

business reflects on the Success of this town.

I teach skiing because its fun and I enjoy it. With LBO I think

it can only get better.

Thanks for your time.

Sincerely yours,

Joseph C. Webb

Dan Robinson

June 25, 1996.

Craig W. Conrath,

Chief of Merger Task Force, Antitrust Division, US Dept. of Justice,

1401 H Street, NW., Washington, DC 20530.

Dear Craig: I oppose the ATD's recommendation that Cranmere Mtn.

and Waterville Valley be sold off to the recent LBO purchase of Ski

Ltd. The truth is Lbo Enterprises delivers a better ski package than

Cranmere [of] Waterville could ever hope to do on [there] own. I

know--I've skied most of my 43 years and have had numerous seasons

passes. Waterville with Tommy Cochran at the helm for 29 years just

plain wasn't keeping up--LBO Enterprise is the perfect outfit to run

Waterville and could deliver world class skiing that we skiers

deserve! Prices are basically the same at most ski areas--all things

considered, besides were talking descretionary dollars. Terrain &

location dictate who your customers will be in the Ski World more

than ticket prices and ownership. I've skied Cranmore all my life

and since LBO took over skiing there has never been better. Please

reconsider your actions--as skiers, we would be getting an Anti

Trust Shafting just when things finally were looking up. I can't

tell you how [unbelievably] frustrating It has been to be a ski

fanatic and live in New England. From bad snow years to poor or slow

capital improvements--It's always been something. LOB in the past 6

years or so has raised the bar that most major ski areas have to

clear to stay competitive. The length to consumers has been a

dramatic improvement in Ski conditions at all competing areas. LBO

has been very, very good to us and for New England skiing. No matter

what you--Craig ultimately decide to do I'm going to invest my

skiing dollar in LBO as they deliver By far the best skiing in New

England. Let them expand this marvelous operation unhindered so

others can experience LBO Skiing--skiing the way it should be.

Thank you,

Dan Robinson,

525 Ocean House Rd., Cape Elizabeth, ME 04107 and Bethlehem NH, winter.

If you wish to discuss this matter with a real skier I can be

reached at 207-799-4729.

Peter B. Ward

June 25, 1996.

Craig W. Conrath,

Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H

Street, NW., Washington. DC 20530.

Dear Mr. Conrath: Please don't let the brevity of this note

belittle the very strong opposition I'm extending to you regarding

the Department of Justice's recent divestiture ruling on LBO's

forced sale of Mt. Cranmore in North Conway, New Hampshire. As you

may be aware, Mt. Cranmore is the ``Mecca'' of skiing in this

country, and over the years it has experienced good and bad times.

With the arrival of Les Otten on the scene, this wonderful ski area

finally has the opportunity to become a profitable operation,

serving its community of faithful patrons in the manner originally

intended by Harvey Gibson and Hannes Schneider.

Please do everything possible to reverse this absurd ruling so

that Mt. Cranmore may continue to thrive under strong and

knowledgeable leadership. Washington Valley needs this attraction,

and people such as myself, who have skied Mt. Cranmore since the

late '30s, welcome Les Otten and his expertise!!!

Please be thoughtful enough to respond to this plea.

Respectfully,

Peter B. Ward,

60 Bridge Street, Manchester, MA 01944.

Dick Smith, Photography

June 25, 1996.

Mr. Craig W. Conrath,

Merger Task Force, Antitrust Division, U.S. Department of Justice,

1401 H Street NW., Washington, DC 20530.

Dear Mr. Conrath: I am sure that it was with good intent that

the Department of Justice's decision to require LBO to divest itself

of Waterville Valley Ski Area and Mt. Cranmore. I can only speak for

Cranmore as I live in North Conway.

Cranmore Mt. has gone through at least two owners and has been

on the verge of bankruptcy for 10 or more years. It was with great

relief and expectation to the residents and businesses when it was

announced that LBO was buying Cranmore. The ski industry is not

noted as a particularly profitable business and a bad winter in one

area can be devastating. Thus owning ski areas in different parts of

New England can spread the profits and losses of a particular area.

It is unlikely that the owner of one area has the resources to

withstand two or three bad winters. A new owner of Cranmore is

unlikely to have the resources to carry Cranmore through the bad

years and will be back in bankruptcy again dragging the local

economy down with it.

[[Page 56009]]

While competition is a noble principle, lowering ticket prices

can only hurt the bottom line and put Cranmore on the brink of

bankruptcy again.

I am afraid that your decision was too narrow and the overall

view of the local economy was not taken into consideration. I urge

you to reconsider your decision and allow LBO to retain Mt.

Cranmore.

Thank You.

Sincerely,

Dick Smith,

P.O. Box 300, Crestwood Drive, North Conway, New Hampshire 03860.

Robert L. Johnson, CPA & Associate

June 25, 1996.

Craig W. Conrath,

Chief of Merger Task Force, Antitrust Division, US Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Re: LBO Enterprises' requirement to divest itself of Cranmore &

Waterville Valley

Dear Mr. Conrath: As I understand from the local papers, the

Justice Department is forcing LBO to divest itself of Cranmore and

Waterville Valley. I will outline several points why LBO should be

allowed to retain the above areas.

Will divestiture increase competition--I doubt it.

Both Cranmore and Waterville Valley have suffered through under-

capitalization and bankruptcies prior to purchase by LBO.

There is no reason to assume that future small mountain

operators will be able to withstand the capital needs to run free-

standing areas. Economies of scale that LBO has available include

substantial buying power when negotiating for the purchase of fixed

assets (i.e, lifts, supplies, electricity, etc.). LBO has an

excellent track record of investing substantial sums in areas that

they have purchased. LBO puts its money where its mouth is.

The consent decree assumes that Cranmore and Waterville Valley

can survive on their own. I have no doubt, based on prior histories

of both ski areas, that the opposite is likely to be true. Without

the buying power and capital of a larger organization, both areas

are likely to return to their prior bankrupt ways. If both areas

return to bankruptcy, then the Justice Department has not solved

their perceived competition problem, but only limited consumers'

ability to choose where to ski.

Economic disruption for the communities dependent on Cranmore &

Waterville Valley.

Under the assumption that Cranmore and Waterville Valley could

not survive without LBO, then the local communities will suffer

accordingly. The Federal Government spends hundreds of thousands of

dollars a year in our rural areas to promote the economy. The

divestiture decision seems short-sighted. Again, LBO has a proven

track record of investing in the ski areas with a positive fallout

within the local community.

Even if these small areas survive, they are likely to `'limp

along'' with no competition impact to the industry.

This merger will provide substantial cost savings and allow for

survival or Cranmore and Waterville Valley.

Enclosed please find an article from the Wall Street Journal

entitled FTC to Weight Cost-Savings In Mergers, dated June 3, 1996.

Briefly, the article says that some mergers deemed illegal today

could be approved in the future with an appropriate study of the

cost savings involved in ``production, distribution, promotion and

other efficiencies * * * '' LBO has the ability to pool promotion,

capital expenditures, etc. to provide high quality skiing that would

otherwise not be available to small ski areas.

Sad to say, but Cranmore and Waterville Valley's bankrupt past

are proof positive that small areas are not economical to run.

If the Justice Department can find a better ski alliance for

Cranmore & Waterville Valley than LBO, I would like to see it.

Conclusion.

The industry is consolidating for the good and this

consolidation will provide stability for both skiers and the

surrounding communities which depend on Cranmore and Waterville

Valley.

I respectfully request that the Justice Department reconsider

its order for divestiture of Cranmore and Waterville Valley.

Very truly yours,

Robert L. Johnson, CPA/PFS,

Personal Financial Specialist.

enc. WST article 6/3/96--FTC Weigh Cost-Savings In Mergers.

cc: Senators Bob Smith & Judd Gregg, Congressmen Charles Bass & Bill

Zeliff.

The WST article of 6/3/96 was not able to be reprinted in the

Federal Register, however, it may be inspected in Suite 215, U.S.

Department of Justice, Legal Procedures Unit, 325 7th St., N.W.,

Washington, D.C. at (202) 514-2481 and at the Office of the Clerk of

the United States Court for the District of Columbia.

Crest

June 25, 1996

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington 20530.

Dear Mr. Conrath: I write this letter as a small businessman in

a small resort town who was deeply disappointed in the decision that

Cranmore Mountain must be divested from LBO Enterprises.

Having been in North Conway, New Hampshire for over 20 years,

I've seen the gas lines, 21% interest rates, no snow, and the

recession of the 90's. Through all these times, the question of

whether Cranmore would continue to exist was always present on

everyone's mind. For most of these years it was open, but not ready

or financially capable of attracting tourists to our area. After

twenty years, I thought we finally had some stability to our

economic base with the purchase of Cranmore by LBO Enterprises.

With the large capital investments that need to be made to

operate a successful ski area and the marketing acumen to attract

customers to the resort, there are few who can make this a

successful venture. You may feel that there are other buyers who can

offer the same, but in fact 20 years of experience indicates

otherwise. While your concern is preserving competition and making

sure that prices are competitive, you may in fact be doing just the

opposite. It is unlikely that anyone buying Cranmore would have the

purchasing power or management available. Consequently, the cost of

doing business for someone new coming in would be higher than for

LBO. Higher costs of doing business mean higher prices. No

interchangeability of tickets or choices means fewer visitors, after

all, there are other ski resorts or areas to visit that do offer

this. Furthermore, even with LBO owning two ski areas in the Mt.

Washington Valley there are still three other areas with three

different owners. Five ski areas with four owners does not seem to

have a monopoly over five areas with five owners.

I understand that your concern is with the skiers of

Massachusetts and there are still many choices for skiing available

to them in other non LBO ski areas. I wish the Department of Justice

was as concerned with the residents of the Conways/Mt. Washington

Valley in the 70's, 80's, and 90's when we had gas shortages and

bank foreclosures as they are now about the skiers from

Massachusetts. The skiers will always have choices; we didn't when

we faced gas lines, recessions, and bank foreclosures. We had an

increase in skier visits last year because of the investment and

value that skiers saw in our area due, in part, to LBO Enterprises.

We have started to see some economic revival in our area. Please let

the free enterprise system work.

I respectfully request that your allow LBO Enterprises to

continue its ownership and operation of Cranmore Mountain for the

benefit of skiers, its employees, the residents of the Mt.

Washington Valley, and for the State of New Hampshire.

Sincerely,

Robert M. Weiss,

Dealer Principal.

Robert McManus

P.O. Box 516, Jackson, N.H. 03846.

June 25, 1996.

Mr. Craig W. Conrath,

Merger Task Force, Antitrust Division, U.S. Department of Justice,

1401 H Street NW., Washington, DC 20530.

Dear Mr. Conrath: My comments are directed to your recent

position regarding the ownership of Mt. Cranmore in North Conway,

NH.

My wife and I are retired innkeepers and for many years we were

involved on a daily basis with the tourist related economy of the

area that we call the Mount Washington Valley. With its geographic

location, Mt. Cranmore is critical to the economy of the area.

When Mt. Cranmore went bankrupt a few years ago, the effect on

the area was dramatic. It was more than a loss of jobs and a drop in

the number of dollars in circulation. There was a deterioration of

the physical plant and the collective psyche.

The acquisition of the complex by LBO was even more dramatic.

The jobs came back. The economy took a boost. The region found a

sense of hope for the future. There was a

[[Page 56010]]

substantial capital investment and a level of management expertise

beyond the grasp of the usual ski area. I must add that Cranmore is

much more than a ski area. It is a delightful summer tourist

attraction. There are world class clay tennis courts and the only

indoor courts within 60 miles. There is a health club with constant

use by all age groups in the community.

Your proposal to require LBO to divest the Cranmore complex has

shaken the community to the core. I urge you to make a greater

effort to examine the economic and social impact of this decision on

the region.

Sincerely,

Robert McManus,

Ann McManus.

June 26, 1996.

Harry Stead

Craig W. Conrath,

Chief Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Dear Mr. Conrath: I am writing to you to strongly protest the

Justice Department's ill founded ruling that is forcing LBO to

divest itself of Mt. Cranmore. I particularly found your Mr.

Biggio's response to the Conway Daily Sun interview (6/25/96 issue)

to be a typical Federal Gov't heavy handed response. Like; ``I don't

recall a circumstance when we have withdrawn'' stated Biggio. Since

when have you people become infallible?

For Mr. Biggio to state that you entered into a settlement in

concert with LBO was a joke you figuratively held a gun to his head.

Here's another quote from Mr. Biggio. ``All this happened before the

trigger was pulled'' and the assistant attorney general signed on to

a hostile lawsuit. Sounds like a threat to me!

As far as the Justice Dept filing a Competitive Impact Statement

detailing their rational and conclusions, I submit that the

Department does not have people that are knowledgeable enough in the

factors that are required to make an old small ski area with a

southern exposure in Mt. Washington Valley a successful venture. For

Mr. Biggio to say that his staff talked to a number of operators,

industry officials, as well as skiers is like taking a poll; the

results can be steered by the way the questions are phrased. Anyway

other operators & industry officials shouldn't count, only skiers

opinions count. So why didn't your Dept hire a professional poll to

[simple] ask the skiers at Mt. Cranmore during the Winter of '95-'96

as to how they rated it that season as compared to any of the past

15 seasons as to skiing conditions, amenities, cost etc etc; and

whether they felt that LBO ownership was good for the skiers of

Eastern New England. Not even if it was good for the economics of

the Valley.

If the Department's second concern is the economic impact on Mt.

Washington Valley then splitting Cranmore off from it's sister

Mountain, Attitash/Bear Peak will without a doubt have a negative

economic impact.

All Mr. Biggio's talk about the Justice Dept closely evaluating

every prospective buyer to assure that Cranmore is put in the hands

of a strong operator isn't anything more than pure rhetoric. I

submit that the Dept is completely incapable of such an evaluation

of prospective buyers; and secondly with a 180 day time limit on LBO

to sell, you'll sell to the first buyer that comes along with the

financial backing that will consummate a sale.

I know that you have received many letters that have taken a

very positive approach on why Cranmore needs to stay a part of the

LBO family for it to survive; and I had planned to write such a

letter until I read the interview of Mr. Biggio with his cavalier

attitude.

It's a sad state of affairs when the Federal Gov't spends our

tax money to meddle into an industry that is fueled by discretionary

spending and isn't ______ has been self regulating in a free market

environment? The two ski areas in the State that have the poorest

reputation are Cranmore Mt. and Mt. Sustapel both owned and operated

by the State of New Hampshire. If this State can't successfully

operate ski areas, what makes the Federal Gov't think that they can

regulate a ski area to economic success.

The Justice Dept should seriously consider all comments that it

receives before and during the 60 day public comment period. Why

ever have one if it's nothing more than a formality as indicated by

Mr. Biggio when he states: ``I don't recall a circumstance when we

have withdrawn publics faith in their gov't,'' if you truly

considered the negative impact that forcing LBO to divest itself of

Mt. Cranmore would have on Eastern New England Skiers.

Very truly yours,

Harry Stead,

Roberta M. Stead,

7 Glem Ellis Road, Glem, NH 03838-1268.

cc: Senator Judd Gregg, Representative William Zeliff.

Sandra W. Dahl

June 26, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Dear Sir: I am writing to urge you drop the government's

insistence that LBO Enterprises divest itself of the Mount Cranmore

ski area. LBO has revitalized this area's oldest ski resort and

enabled the town to retain an important tourist attraction; to

require that this ski area be put up for sale again and therefore

into the hands of a corporation or person(s) with potentially less

business ability and/or commitment to regional growth and

development is absolutely ludicrous.

My concern about this action is more deep-rooted than the

potential damage to our local economy. My concern is that your

agency has seen fit to restrict the growth of vital, dynamic

organization which provides the general public a place to spend

purely discretionary income. Skiing, alpine slides and water-play

pools are not necessities of daily living; people are free to choose

where and if they ski and there are any number of areas in Maine.

New Hampshire and Vermont where one can choose to ski that are not

owned by LBO. My concern is that the anti-trust laws or restrictions

or whatever that type of thinking is called is being applied to a

business involved in the provision of recreational activities to

people who are free to choose when, if and where they participate in

those activities. As for other providers of those elective

activities, if they can do it better or at least as well, they will

get the business.

I am asking that the Justice Department throw out the consent

decree against LBO and allow private enterprise to continue to grow

unimpeded by governmental interference.

Very truly yours,

Sandra W. Dahl,

P.O. Box 789, Glen, N.H. 03838.

c.c. Rep. Zeliff, Sen. Gregg, Sen. Robert Smith, LBO Enterprises.

Robert C. Peterson

June 26, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,

1401 H Street NW., Washington, D.C. 20530.

Dear Mr. Conrath: It was with great concern and much confusion

that I recently read of your ruling against LBO Enterprises of

Sunday River, Maine. My concern is over the financial impact on the

town of North Conway, NH if LBO does not continue to operate the Mt.

Cranmore Ski Area.

As you are probably aware, Mt. Cranmore has for some years now

existed only at the pleasure of a series of private owners and a

desperate bank. Under Mr. Otten's leadership last year, the

facilities were improved, the staff expanded and the mountain's

image considerably enhanced. For the first time in recent memory,

the area ran profitably and the employees were paid on time. Mt.

Cranmore is the most historic ski area in the U.S. Only as a member

of a financially strong family can Cranmore continue to exist as one

of the finest family ski areas in New England.

My confusion can be best expressed by: ``WHY''? This is not AT&T

or Microsoft! So what if one company controls 75% of the

northeastern ski market. That's only 6 to 7% of the national market.

If lift ticket prices go too high, people won't come. The whole

process is self correcting. LBO ticket prices are already higher

than the competition and are worth every penny. These people know

how to put snow down! Customer service at LBO areas is excellent. It

seems the only one that's unhappy about the things that LBO is doing

for skiing in New England is the Justice Department.

This whole issue just lends credence to the most feared words in

the English language--``I'm from the Government and I'm here to help

you!''

Sincerely,

Robert C. Peterson,

Glen, NH 03838.

Richard & Lois Anthony

June 26, 1996.

Mr. Craig W. Conrath: We have been winter residents in North

Conway, N.H. for about 30 years, and avid skiers at Mt Cranmore and

Attitash.

[[Page 56011]]

We have been pleased with Les Otten's commitment to both ski

areas and to the North Conway--Bartlett areas in general.

We do not believe the Dept. of Justice's divestiture ruling on

LBO's forced sale of Cranmore is in the best interest of the economy

of the area and the skiing industry.

Richard & Lois Anthony,

3 Concannon Rd., Kingston, N.H. 03848.

M.L. Regan

June 26, 1996.

Mr. Craig W. Conrath,

Merger Task Force, Antitrust Div., US. Dept of Justice, 1401 H St.

Washington D.C. 20530.

Please reverse the decision re Mt. Cranmore in North Conway. LBO

has helped the economy of this tourist valley & this antitrust is a

blow to all.

Miriam Regan,

Box 345, Intervale, NH 03845.

Saint Anselm College

June 27, 1996.

Craig W. Conrath, Esquire,

Chief, Merger Task Force, Antitrust Division, United States

Department of Justice, 1401 H Street, NW., Washington, DC 20530.

Dear Mr. Conrath: I am writing about the forced sale of Cranmore

Mountain Ski Area in connection with the acquisition by LBO Holdings

of Ski Limited.

We are very appreciative of the Antitrust Division of the

Justice Department's protection of consumer interests in all mergers

and acquisitions. We are equally appreciative of the Division's

scrutiny of the LBO-Ski Ltd. transaction. However, it appears that

the Division has been misled in this regard. Cranmore Mountain,

which now operates in conjunction with Attitash Mountain, represents

collectively with Attitash about 220,000 skier visits per year out

of the approximate 2,000,000 skier visits annually in all the New

Hampshire State Areas. This is hardly a monopoly threat to the Ski

Industry in New Hampshire.

For 25 years, Cranmore Mountain has struggled financially with

the last two owners leading to insolvency and bankruptcy. Cranmore

Mountain is vital to the economy of the North Conway, Conway and

Fryeburg, Maine area. This area has struggled with the plight of

Cranmore Mountain and other local ski areas. The Town is vitally

involved in the mountain and the well being of the Mountain is vital

to the Town. After twenty-five years of apprehension, investments

and support, the purchase of Cranmore Mountain by LBO was the

stability needed to rejuvenate Cranmore to viability.

Cranmore Mountain was a birthplace of skiing in Northern New

England. The mountain has produced scores of Olympic skiers that

have represented the United States Ski Team.

The forced sale of Cranmore Mountain will condemn this facility

to mediocrity and possible extinction. Leaving Cranmore Mountain as

a part of LBO Holdings or the American Ski Company will not impair

the Ski Market in New Hampshire and will allow the Mount Washington

Valley Area to pursue its viability in the winter ski business.

Your favorable consideration in this matter will be appreciated.

Thank you for your courtesy.

Sincerely,

John J. Reilly, Jr.

cc. Senator Gregg, Senator Smith, Congressman Bass, Congressman

Zeliif.

Jennifer K. Savoie

June 28, 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Re: Mount Cranmore, New Hampshire.

Dear Mr. Conrath: I am saddened and concerned about your decry

that LBO Holdings must divest itself of Mount Cranmore in order to

purchase SKI Ltd. As a long-time resident of the Mt. Washington

Valley, I have witnessed Mount Cranmore's steady decline, and then

its recent resurgence under the guidance of Les Otten. It is a

comforting scene in the wintertime to see the lights on at Mt.

Cranmore again in the evening. The mountain has long been a focal

point of our Valley.

I am concerned that your decision will do much more harm to this

Valley than good. Who else could possibly afford to buy the very

small, family-oriented Mount Cranmore and continue to upgrade it

enough to compete in today's marketplace * * * witness the hardship

and bankruptcy of nearby Black Mountain Ski Area in Jackson, as well

as countless other mountains that have fallen by the wayside (Mount

Whittier, King Ridge, etc.).

As a teacher of economics, I understand well the concept of

competition and a free marketplace. However, Mount Cranmore is a

unique situation which deserves special consideration and accolades

to Mr. Otten for bringing it back from the brink of bankruptcy. In

addition to the potential loss (forever!) of our beloved Mount

Cranmore, consider the economic impact on the local economy of all

the lost jobs at the mountain.

As the Northeast continues to struggle out of our prolonged

recession, I urgently request that you reconsider your decision. I

don't believe that Mount Cranmore will survive without LBO Holdings,

and I do believe that many jobs will be lost along with the ski

area.

Sincerely yours,

Jennifer K. Savoie,

PO Box 715, 17 Skyline Drive, Intervale, NH 03845.

Frank Murphy and Family

June 29, 1996.

Mr. Craig W. Conrath,

Chief of Merger Task Force Antitrust Division, US Department of

Justice, 1401 H Street, NW, Washington, DC 20530.

Re.: Les Otten and the Forced Sale of Mount Cranmore Ski Area.

Dear Mr. Conrath: In the past ten years Mt. Cranmore has had

three different owners. Prior to Mr. Otten it was always a

``leaking, leaner'' of a ski area. That's a sailors term to describe

an old, rusty bucket of a ship. In one year of ownership Mr. Otten

has brought sparkle to Cranmore with torch light parades and fire

works. He has run it with all the flair of a Swiss ski resort.

In October, 1995 with the promise of Mr. Otten's presence in the

Mount Washington Valley at both Cranmore and Attitash, I moved my

family from Gloucester, Massachusetts to North Conway, New

Hampshire. Are you familiar with Mr. Otten's campaign to bring

people to the North Conway area? He ran a very successful marketing

campaign called ``Ski the Presidentials!'' This revved up the Mount

Washington Valley economy. Exactly why I moved here.

I own an eleven year old, center entry, colonial on .6 acres of

land with views of North and Kearsage Mountains. If the Justice

Department sticks to its decision that Mr. Otten must sell Cranmore,

can you locate a buyer for my home as well?

Sincerely,

Frank, Marie-Louise, Brendan, Dylan, and Leigh Erin Murphy.

c.c. Senator Bob Smith, 50 Phillippe Cote Street, Manchester, NH

03101, Senator Judd Gregg, 28 Webster Street, Manchester, NH 03104,

Congressman Charlie Bass, 142 North Main Street, Concord, NH 03301,

Congressman Bill Zeliff, 340 Commercial Street, Manchester, NH

03101.

Jean M. Lees

June 30, 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice.

Dear Mr. Conrath: Three generations of my family have enjoyed

skiing and hiking on the slopes of Cranmore. The Cranmore Mt.

complex has been the focus of many town activities--sports and

festivities--since the skimobile was built in 1939. Therefore, we

are deeply concerned that Cranmore will continue to survive and

prosper.

We had hoped, however, that it would not become a Sunday River

Type ski operation with massive expansion and rapid development.

While Sunday seems a highly successful ski area, it has done little

to enhance the Bethel region. The recent constructions near the

Bethel railroad site look extremely shoddy. Here, we have many small

interests, local inns and shops that would not necessarily benefit

by one major controlling operation.

Therefore, many of us favored the Justice Department's move to

curb L.B.O. Corp.'s acquisitive and pervasive tactics before

Cranmore and its surrounding land become part of a huge New England

monopoly.

Sincerely,

Jean M. Lees.

Tech Works

June 30, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street, NW, Washington, DC 20530.

Re: LBO-SKI Ltd Acquisition--Cranmore Ski Resort.

[[Page 56012]]

Dear Sir: I write you to express my strong opposition to DOJ's

requirement that Cranmore Ski Resort be divested by LBO in order to

gain approval for the subject acquisition. My reasons are threefold.

Since I moved to Conway, NH four (4) years ago, Cranmore has

been a weak, sick ski area, recovering only since its acquisition by

LBO somewhat over a year ago. Even in its former weakened condition,

it was and continues to be vital to the winter time health of the

Mount Washington Valley. If Cranmore is again forced to struggle for

capital and marketing clout (or eventually fail for the lack of

them), this Valley and its some 20,000 residents will be irreparably

damaged. What assurance is DOJ giving that this will not happen?

Does the DOJ even care, or is the intellectual pursuit of

``competition'' more important?

Downhill skiing, while probably the most significant, is but one

of several wintertime sports that attracts people to The North

Country. Downhill skiing competes with cross country skiing,

snowmobiling, ice climbing, ice skating, etc. This raises the

following question: What is considered to be the ``relevant market''

on which this divestiture is being required? So what if American Ski

Company would own 25% of the downhill skiing in the Northeast! I

believe the relevant market is must broader than downhill skiing in

the Northeast. On occasions too numerous to count, I personally have

decided not to downhill ski in favor of a less expensive

alternative. Did DOJ take these other wintertime competitors into

account? What kind of market share would American Ski Co. have if

these directly competitive alternatives were taken into account? Far

less than 25%, and far less than the market share of many other

acquisitions that have been approved by DOJ.

Aside from the other sports that compete with downhill skiing,

winter vacation destinations compete on a worldwide basis.

Specifically, downhill skiing in the Northeast competes with skiing

in the West and in Europe. Again, based on personal experience when

I lived in Pennsylvania for 20 years, I used to take the family for

a ski week in the Northeast (Vermont, Maine and Canada). Later, I

began taking them to Colorado, Utah and the like as air travel

became cheaper and more convenient. We also once went to Europe. The

competition wasn't between ski areas in NH and VT; the competition

was between the West/Europe/Canada and the Northeast. In fact, I

believe statistics will show that the Northeast is losing this

battle in a bad way. Where is money being spent for expansion?

Certainly not in the Northeast.

Cranmore had become a new and wonderful place under LBO, in just

one year! A new hi-speed quad chair was installed; restaurants were

improved; grooming was made more exciting; and plans were underway

for additional slopes and lodging. Now we are back to the old

uncertainties, questionable supply of new money, only regional

marketing, if that--and this is supposed to compete with the likes

of Vail, Deer Valley, Telluride, Beaver Creek! Forget it. Cranmore

is finished if divested from LBO; our best hope is a marginal,

regional slope that may not even be able to pay the electric bill to

make snow as required (like before). The worst case would be

failure--would that foster competition?

Please reconsider your decision. Please give Cranmore a chance

to compete with the real players on a worldwide basis. Let them

remain part of an organization that can advertise nationwide, even

worldwide, to attract customers from afar who want to ski a variety

of slopes in the Northeast on a package basis of some sort. If their

prices rise too much, people aren't dumb with their discretionary

spending. They will ski the West, or Canada, or Europe. If they

can't afford places like that, they will ski cross country, ice

skate, or just build a snow man.

To think that LBO/American Skiing Co. would have the market

power to raise prices in an anti-competitive way is about like

saying they have the power to make it snow. They have neither. Let

them build New England skiing so that once again this region can

compete with the current powerhouses of skiing. Then we might see

some real competition!

Respectfully submitted,

David S. Urey.

cc: Congressman William Zeliff, Les B. Otten, The Conway Daily Sun.

Thomas A. Mulkern

Craig W. Conrath,

Antitrust Division, Dept. Of Justice, Washington, DC 20530.

Dear Mr. Conrath: Back in the 1930's, Harvey Gibson managed to

obtain the release of Hannes Schneider from a German concentration

camp and to introduce him to Cranmore Mt. in No. Conway, NH. It

marked the beginning of Alpine skiing in North America.

From that modest birth, skiing has become a mammoth industry

spawning giant areas like Vale, Aspen, Tahoe, Sun Valley, Jackson

Hole, et al. The tiny area of Cranmore Mt. remains eminent only as a

historical footnote.

Yet, despite its relative obscurity, it has somehow managed to

attract the attention of the Antitrust Division of U.S. Dept. of

Justice. As one who has spent a lifetime as a devotee of alpine

skiing and who owns property in the area involved I am writing to

you to protest this action.

In the New England ski industry whose past is strewn with

failures, Les Otten stands out like a beacon of light in a sea of

disaster. Until he arrived on the scene, Mt. Cranmore suffered

through a succession of inept performers to the point of imminent

bankruptcy. Let Otten comes to the rescue with a major infusion of

capital investment and operational know-how and not only breathes

new life in the resort but promises to expand it to a first class

ski area once again.

For this he gets not the applause he has earned for saving jobs,

restoring property values and insuring the future of the village of

No. Conway but instead, the attention of the Antitrust Division of

the U.S. Department of Justice.

Is it any wonder recent national polls reveal an alarming

portion of the American public becoming increasingly disenchanted

with the federal government because of what they perceive to be

intrusion in their private lives?

I see this as an example of such intrusion and I intend to use

all the support I can find to oppose it.

Sincerely,

Thomas A. Mulkern,

4 Cortland Lane, Lynnfield, MA 01940.

SURRETTE TRUCK CAPS

Craig W. Conrath,

U.S. Dept. of Justice, 1401 H. Street NW, Washington, DC 20530.

Dear Mr. Conrath: I think the Antitrust Division is making a big

mistake by asking LBO Enterprises to divest Mt. Cranmore for a

number of reasons.

The first reason is, we in the Mt. Washington Valley live on

tourism. With people not coming to Conway, it will hurt many small

business people.

Mt. Cranmore is a weak link in the ski business. By taking it

out you only make LBO's other holdings, Attiash, Bear Peak, and

Sunday River, stronger.

Many ski areas in N.H. have closed down. If LBO' prices get too

high, I am sure other areas will reopen.

Sincerely,

Richard Surrette.

Ronald K. ``JAZZID'' Moore

Craig W. Conrath,

Chief, Merger Task Force; Antitrust Division, U.S. Dept of Justice,

1401 H St NW, Washington, DC 20530.

Dear Mr. Conrath: I am writing in regard to the divesture of

Cranmore Mt Ski Area in North Conway, NH from LBO. I feel this is

the wrong decision, since the ski area has not done well in recent

years and almost went belly up! Until this the first year under LBO

when it turned a profit! Ski areas are a very iffy enterprise as it

is, what with depending on mother nature, the economy and the

consumer! Speaking of the consumer, we could always ski elsewhere if

LBO raised the prices at Cranmore, which I don't think he will. LBO

can run ski areas profitably, and provide jobs for people in the

community.

So, Craig, I beg you, do the right thing, which We seldom see

done in DC and let LBO continue as the ownership of Mt. Cranmore!

Thanks for listening.

Sincerely yours,

Ronald K. Moore.

Capt. David E. Bartlett

Mr. Craig W. Conrath,

Chief, Merger Task Force; Antitrust Division, US Department of

Justice, 1401 H. Street, NW, Washington, DC 20530.

Subj: Divestiture of Cranmore LBO/SKI Ltd merger.

Dear Sir: As a professional ski instructor at Mt. Cranmore for

the past 13 years. I have worked for at least 4 different owners/

managers. LBO was the first to bring stability and confidence. The

current ruling does not undermine but destroys both of those issues.

In the list of areas impacted by the merger, in my opinion Mt.

Cranmore is [``Physically'',] the ``runt of the litter''. I fail to

see how forcing the [seperation] of the smallest area breaks a

monopoly. If the

[[Page 56013]]

concern is regionally, due to its [proxcimity] to Attitash/Bar Peak,

the only entity that has openly voiced interest is another ski area

25 minutes up the road.

This divestiture is possibly the final nail in Mt. Cranmore's

coffin. The potential for Cranmore's growth, and consequently, the

growth of skiing in New England will only be enhanced by your review

and reversal of this decision.

Resp.

David E. Bartlett.

M/M Robert M. Fisher

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice.

No doubt you have already received more than your share of

letters concerning the impending divestiture of Cranmore and

Waterville by LBO. And I am sure that you have heard Representative

Zeliff's arguments on behalf of the whole Mt. Washington Valley

whose economy depends so desperately upon the ski industry.

As a long-time resident, retired public school teacher and ski

coach, all of whose children have to a certain degree achieved their

academic objectives in part because of their skiing experiences here

in the valley, and whose livelihood has also been enhanced by skiing

opportunities here, I must argue strongly in favor of

reconsideration of the divestiture decision.

Cranmore was financially shakey when LBO rescued the operation

with a transfusion of capital and know-how which enabled the ski

area to function competitively for the first time in a number of

years of--dare I say?--modest management. Perhaps because our

youngest daughter was a two-time Olympian on the U.S. Ski Team and

has continued her career as a coach, as have all our other children

who got their start at the Junior Program on Cranmore, I am

particularly sensitive to the needs of the community. Even more so

because severe school budget cutting (in the order of 10%) threatens

that very junior program which has spawned so many local Olympians,

teachers, and coaches.

Thank you for reading these comments.

Sincerely yours,

M/M Robert M. Fisher,

615 Potter Road, Center Conway, NH 03813.

Robert A. McDaniel and Anita McDaniel

June 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Dept. of Justice,

1401 H Street NW, Washington, DC 20530.

Dear Mr. Conrath: I was very disappointed that the members of

the justice department's merger task force decided to exercise their

authority to limit the potential for monopolistic practices in the

New Hampshire ski industry. I emphasize the word potential for the

following reasons:

LBO would own only 25 percent of the New England ski market.

Competition from Massachusetts, Vermont and Maine, which abut

the small state of New Hampshire, is fierce.

The government has perfect price control mechanisms through Mt.

Sunapee and Cannon Mountain, which are both state-owned ski areas.

The fact that New England does not have a single destination ski

area to compete with areas such as Aspen, Breckenridge, Tahoe,

Snowbird, Jackson Hole, Steamboat or Sun Valley.

Many ski industry owners, with the exception of Les Otten, have

encountered a real struggle to remain solvent, much less make

significant expansion investments.

Perhaps the larger issue is not competition but employment in

New England ski towns. Government officials should take a look at

what the real conditions are before restricting the economy.

My disappointment stems from the over-reach of Washington

officials at a time when New England has fortunate to find someone

with the interest and commitment to turn it into a major player in

the ski industry.

Very truly yours,

Robert A. McDaniel,

Anita McDaniel.

19 Bellview Ave., Marehorn, MA 01752.

Gilbert G. Mahan

June 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW, Washington, DC 20530.

Dear Mr. Conrath: I was very disappointed that the members of

the justice department's merger task force decided to exercise their

authority to limit the potential for monopolistic practices in the

New Hampshire ski industry. I emphasize the word potential for the

following reasons:

LBO would own only 25 percent of the New England ski market.

Competition from Massachusetts, Vermont and Maine, which abut

the small state of New Hampshire, is fierce.

The government has perfect price control mechanisms through Mt.

Sunapee and Cannon Mountain, which are both state-owned ski areas.

The fact that New England does not have a single destination ski

area to compete with areas such as Aspen, Breckenridge, Tahoe,

Snowbird, Jackson Hole, Steamboat or Sun Valley.

Many ski industry owners, with the exception of Les Otten, have

encountered a real struggle to remain solvent, much less make

significant expansion investments.

Perhaps the larger issue is not competition but employment in

New England ski towns. Government officials should take a look at

what the real conditions are before restricting the economy.

My disappointment stems from the over-reach of Washington

officials at a time when New England has been fortunate to find

someone with the interest and commitment to turn it into a major

player in the ski industry.

Very truly yours,

Gilbert G. Mahan,

P.O. Box 278, Kearsarge, NH 03847.

Robert E. and Joan W. Billings

June 1996.

Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW., Washington, DC 20530.

Dear Mr. Conrath: I was very disappointed that the members of

the justice department's merger task force decided to exercise their

authority to limit the potential for monopolistic practices in the

New Hampshire ski industry. I emphasize the word potential for the

following reasons:

LBO would own only 25 percent of the New England ski market.

Competition from Massachusetts, Vermont and Maine, which abut

the small state of New Hampshire, is fierce.

The government has perfect price control mechanisms through Mt.

Sunapee and Cannon Mountain, which are both state-owned ski areas.

The fact that New England does not have a single destination ski

area to compete with areas such as Aspen, Breckenridge, Tahoe,

Snowbird, Jackson Hole, Steamboat or Sun Valley.

Many ski industry owners, with the exception of Les Otten, have

encountered a real struggle to remain solvent, much less make

significant expansion investments.

Perhaps the larger issue is not competition but employment in

New England ski towns. Government officials should take a look at

what the real conditions are before restricting the economy.

My disappointment stems from the over-reach of Washington

officials at a time when New England has been fortunate to find

someone with the interest and commitment to turn it into a major

player in the ski industry.

Very truly yours,

Robert E. & Joan W. Billings.

David A. Pope

July 1, 1986.

U.S. Dept of Justice, 1401 H Street, NW, Washington, DC 20530.

ATT. Mr. Craig W. Conrath, Ch. Merger Task Force, Antitrust Div.

Subject: Forced Sale of Cranmore MT by Les Otten/The American Skiing

Co.

Dear Mr. Conrath: In your effort to be fair, you are about to

commit the all time miscarriage of justice by forcing the Amer.

Skiing Co/Les Otten to sell Mt. Cranmore in No. Conway for the

following reasons:

(1) By forcing the sale of Mt. Cranmore while it makes good

``Window Dressing'' for the Anti-Trust Div., it will be disastrous

for the town of No. Conway.

(2) When Les Otten bought Cranmore, his presence stabilized the

real estate market, and brought new confidence to the Mt. Washington

Valley.

(3) Les Otten spent (3) three million or more dollars and

rejuvenated the entire mountain and created great skiing.

(4) He started making snow in Nov 1995 and opened the earliest

season in 58 years. (No one else thought it could be done.)

(5) His combined ski ticket between Cranmore and Attitash-Bear

Peak gave the skier the best choice and the best value-saved money.

(6) Competition is everywhere--Wildcat, Bretton Woods, Black Mt.

Pleasant, Mt.

[[Page 56014]]

Franconia, Sunapee, Loon, Ragged Mt. Gunstock, Stone VT Okemo and

more.

(7) Les Otten (The American Skiing Co.) will always be strong

competitors because he knows how to run a ski area, how to make

snow, how to groom, how to feed people and how to listen to people's

complaints and then respond.

(8) Small areas like Cranmore and Waterville Valley need a

strong, financially sound owner who is not afraid to invest money

and then want to see the results build.

(9) If you rescind your push for the sale of Mt. Cranmore, you

can rest assured that it will stay viable and be expanded and the

entire valley will benefit. If it is sold to someone else, the

reverse will happen and skiers will be paying more and receiving

less. Please--Please rescind the Anti-Trust Div. actions in forcing

Les Otten to sell anything. The skiing industry does not need Anti-

Trust protection. People can keep prices and competition in line. It

costs too much, skiers go elsewhere--or not at all.

Thank you,

Very Truly Yours,

David A. Pope,

Box 120, Kearsarge, NH 03847.

PS. Thousands of people think the same way I do.

Mrs. Janet Cooper

Please vote to reverse the D.O.J.'s decision: Mt. Cranmore, N.

Conway N.H. needs LB Otten's expertise to operate the ski area

successfully.

It is most important for the economy of Mt. Washington Valley.

Thank you,

Mrs. Janet Cooper,

45 Plainfield St., Waban, MA 02168.

Jeff Barley

Dear Sir: Forcing LBO to divest itself of Cranmore ski area

makes no sense. Cranmore is the life blood of North Conway and North

Convey is the Keystone of the travel and tourist industry of

northern N.H. We have seen one owner after another come & go because

of limited capital. We finally have a stable owner and you're taking

them away. Ridiculous.

Jeff Barley

StoryLand

July 2, 1996.

Mr. Craig W. Conrath,

Chief of Merger Task Force, Antitrust Division, US DOJ, 1401 H

Street, NW, Washington, D.C. 20530.

Dear Mr. Conrath: I am the founder of Story Land, a children's

theme park and a museum depicting our state's 350 year history.

I grew up in this valley, and except for military service, have

lived here all my 76 years. I was part of the birth and growth and

investment needed to bring a winter industry into being. It is a

risky business wherever it exists anywhere in the world, but it is

the focal point of the economic activity in an area. Without the ski

area, the peripheral businesses don't sprout.

LBO has come at a very propitious time in the evolution of this

industry and his concept and monetary leverage bring this fragmented

industry into the 21st century. Will LBO be able to control the

skier market and pricing in this upper New England area? I don't

think so. Its share will provide the economics of scale necessary

for the huge capital expenditures and still leave \2/3\ of the

market to entrepreneurs to offer alternatives in composition and

pricing. This country was built on this concept.

I write in the hope that you will reconsider the proposed action

as a condition for the permanent merger with SKI.

Yours truly,

Robert S. Morrell,

Founder-Chairman.

cc: Congressman Zeliff,

Senator Judd Gregg,

Senator Bob Smith.

Roy A. Lundquist

July 2, 1996.

Mr. Craig W. Conrath,

Chief, Merger Task Force, Antitrust Division, U.S. Department of

Justice, 1401 H Street NW, Washington, DC 20530.

Subject: Divestiture of Mount Cranmore and Waterville Valley.

Dear Mr. Conrath: I am writing this letter to express my

concerns regarding the recent decision that L.B. Otten and the

American Ski Company divest the Mount Cranmore and Waterville Valley

ski areas. I believe this decision to be contrary to the best

interests of the skiing public and the communities in which these

ski areas do business.

I have been an ardent skier for over 50 years. In my career I

was employed in the defense electronics business as an engineer,

program manager and marketing manager. Now retired, I still ski over

100 days a year. I have seen the ski industry grow from a fledgling

sport in the '40's and '50's through the growth years of the '60's

and '70's to the stagnation that began in the '80's and continues to

exist. It has been well documented by the industry publications that

the skiing population has remained constant for the last decade. It

is not, by any measurement, considered to be a growth industry. To

the contrary, it is an industry that is desperately trying to

survive. In New England alone, the number of ski areas that operate

today is only about one-half the number that were in existence 20

years ago.

The ski area business today is unique. It has become a business

that is extremely capital and energy intensive. Todays skier demands

much more of the ski areas than was the case several years ago. They

demand high speed lifts, both fixed and detachable, which cost

anywhere from $1 million to $2 million to install. They demand

extensive snowmaking to avoid the vagaries of normal winters, which

come at a very high cost to install and have a very high energy cost

to operate. And then they demand that all this snow be meticulously

groomed by a fleet of machines that cost around $200,000 each. In

addition, skiers want to have fine amenities in the lodges and

restaurants.

It is interesting to note that the ski areas that are the most

successful are those that have invested considerable capital in

providing what the skiers want: namely high speed lifts, good snow

making and good grooming, as well as good amenities. It is also

interesting to note that the successful ski areas not only draw the

greatest number of skiers by far, but they also charge the highest

lift ticket prices. One must conclude from this that the skier of

today is willing to pay the market price for a good product.

Certainly lower priced ski areas exist. But they do not provide the

quality ski experience that the major areas provide, and therefore

do not attract the number of skiers. Without the skier visits these

lower priced areas cannot generate enough revenue to make the

capital improvements necessary to attract more skiers. It is a

classic ``Catch 22'' situation. In the long run the lower priced

areas either continue on in a marginal profit situation catering to

a small niche of skiers, or, as has happened to so many small ski

areas, they go out of business. It appears that, because of the

capital intensive nature of today's ski business, that size and

economies of scale are essential not only to provide a quality

product, but to generate the necessary volume of skier traffic to

make a profit.

I would like to discuss the Mount Cranmore situation, as I live

in North Conway where Mount Cranmore is located. Cranmore is the

birthplace of American skiing. It is here that the legendary Hannes

Schneider came to from Austria in 1939 and began teaching skiing to

the ski hungry public. Cranmore grew as the sport developed in the

'40's and '50's. However, it did not follow the boom of the '60's

and '70's as newer ski areas came into existence. Cranmore did not

continue to reinvest in capital improvements. For years the

popularity of Cranmore declined, and even though it priced its

tickets lower than the newer areas, specifically Attitash, its skier

visits decreased. It went through a series of ownership changes, but

capital impro

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