United States, State of New York, Commonwealth of Pennsylvania and State of Florida v. Waste Management, Inc., Ocho Investment Corp., Eastern Environmental Services, Inc.; Response to Public Comments on Antitrust Consent Decree

DEPARTMENT OF JUSTICE

Antitrust Division

[Civil No. 98 CV 7168 (FB)(MDG)]

United States, State of New York, Commonwealth of Pennsylvania

and State of Florida v. Waste Management, Inc., Ocho Investment Corp.,

Eastern Environmental Services, Inc.; Response to Public Comments on

Antitrust Consent Decree

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that on May 21, 1999, the United

States filed its responses to public comments on the proposed Final

Judgment in United States v. Waste Management, Inc. and Eastern

Environmental Services, Inc., Civil No. 98 CV 7168 (FB)(MDG) (E.D.N.Y.,

filed Dec. 31, 1998), with the United States District Court in

Brooklyn, New York.

On November 17, 1998, the United States, New York, Pennsylvania and

Florida filed a Complaint, which alleged that Waste Management's

proposed acquisition of Eastern Environmental

[[Page 31639]]

would violate Section 7 of the Clayton Act, 15 U.S.C. 18, by

substantially lessening competition in waste collection and/or disposal

in nine markets around the country, including the New York, NY

(disposal of commercial and residential municipal solid waste);

Pittsburgh and Bethlehem/Allentown, PA (disposal of municipal solid

waste); Carlisle/Chambersburg, PA area (collection of commercial waste

and disposal of municipal solid waste); and Miami/Ft. Lauderdale, and

suburban Tampa, FL (collection of commercial waste). The proposed Final

Judgment, filed on December 31, 1998, requires Waste Management and

Eastern to divest commercial waste collection and/or municipal solid

waste disposal operations in each of the geographic areas alleged in

the Amended Complaint.

Public comment was invited within the statutory 60-day comment

period. The public comments and the United States's responses thereto

are hereby published in the Federal Register and have been filed with

the Court. Copies of the Amended Complaint, Hold Separate Stipulation

and Order, proposed Final Judgment, Competitive Impact Statement, and

the United States's Certificate of Compliance wit Provisions of the

Antitrust Procedures and Penalties Act (to which the public comments

and the United States's responses are attached) are available for

inspection in Room 215 of the Antitrust Division, Department of

Justice, 325 7th Street, NW, Washington, D.C. 20530 (telephone: 202-

514-2481) and at the Office of the Clerk of the United States District

Court for the Eastern District of New York, 225 Cadman Plaza East,

Brooklyn, New York 11201.

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

payment of a copying fee.

Constance K. Robinson,

Director of Operations and Merger Enforcement, Antitrust Division.

United States's Certificate of Compliance With Provisions of the

Antitrust Procedures and Penalties Act

The United States of America hereby certified that it has complied

with the provisions of the Antitrust Procedures and Penalties Act

(``APPA''), 15 U.S.C. 16(b)-(h), and states;

1. The Complaint in this case was filed on November 17, 1998, and

an Amended Complaint was filed on December 1, 1998. The proposed Final

Judgment (``Judgment'') and the Hold Separate Stipulation and Order

(``Hold Separate Order'') were filed on December 31, 1998. The

government's Competitive Impact Statement was filed on February 2,

1999.

2. Pursuant to 15 U.S.C. 16(b), the Judgment, Hold Separate Order,

and Competitive Impact Statement were published in the Federal Register

on February 26, 1999 (64 Fed. Reg. 9527). A copy of the notice is

attached as Exhibit 1.

3. Pursuant to 15 U.S.C. 16(d), the United States furnished copies

of the Amended Complaint, Hold Separate Order, proposed Final Judgment

and Competitive Impact Statement to anyone requesting them.

4. Pursuant to 15 U.S.C. 16(c), a summary of the terms of the

proposed Judgment and the Competitive Impact Statement were published

in The New York Times, a newspaper of general circulation in New York,

NY, and in the The Washington Post, a newspaper of general circulation

in the District of Columbia. Copies of the certificates of publication

from The New York Times and The Washington Post appear in Exhibit 2.

5. On January 11, 1999, the defendants--Waste Management, Inc.,

Eastern Environmental Services, Inc., and Ocho Acquisition

Corporation--filed with the Court a joint statement describing their

communications with employees of the United States Department of

Justice concerning the proposed Final Judgment, as required by 15

U.S.C. 16(g).

6. During the 60-day comment period after publication of notice in

the Federal Register, The New York Times and The Washington Post, the

United States received five written comments on the proposed

settlement. These comments were from: (a) the Pulaski County, Kentucky

Solid Waste Management District; (b) the Environmental Committee of the

Pocono Mountains Chamber of Commerce in Stroudsburg, Pennsylvania; (c)

the Schuylkill County, Pennsylvania Office of Solid Waste and Resource

Management; (d) the Monroe County, Pennsylvania Municipal Waste

Management Authority; (e) Recycle Worlds Consulting Corporation of

Madison, Wisconsin.

7. The United States evaluated and responded to each of the

comments it received. The comments did not convince the United States

that it should withdraw its consent to the proposed settlement. The

complete text of the comments and the responses appear in Exhibits 3-7;

they are summarized below.

A. The Pulaski County, KY Comment

The Pulaski County Solid Waste Management District complained that

a combination of Waste Management and Eastern would substantially

eliminate competition in the collection and disposal of the county's

residential waste. In our response, we point out that Pulaski County

has entered into a long-term contract for collection and disposal of

its waste, which does not expire until sometime in the year 2002. Under

these circumstances, we note, it is highly unlikely that the merger had

eliminated any existing competition between the defendants in waste

collection or disposal services. In our views, it is simply to early to

predict whether the merger would eliminate any significant potential

competition that may occur after the contract expires in 2002.

B. The Monroe County, PA Comments

The Monroe County Municipal Solid Waste Authority and the Pocono

Mountains Chamber of Commerce, both based in Stoudsburg, PA, asserted

that the governments should have sought and obtained divestiture relief

that would eliminate the anticompetitive effects of the defendants'

merger in Monroe County, Pennsylvania. In that market, these

commentators point out, a combination of Waste Management and Eastern

would control eighty percent of more of the collection and disposal of

the county's municipal waste. In its response, the United States

pointed out that the proposed Final Judgment requires the defendant to

divest the Waste Management commercial hauling routes in the Scranton/

Wilkes-Barre, PA area, which is about 30 miles from the major

population center of Monroe Country, and that the earlier Final

Judgment in United States v. USA Waste Services, Inc. and Waste

Management, Inc., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998),

requires Waste Management to divest commercial waste hauling routes in

the Allentown, PA area, which is only about 20 miles south of Monroe

County. These divestiutes, once approved by the courts, would install

in each of these areas one or more new competitors whose operations

would be sufficiently close to provide a serious competitive check on

the combination's ability to raise prices after consummating their

merger.

C. The Schuylkill County Comment

The Schuylkill County Office of Solid Waste and Resource Management

(``OSWRM''), based in Pottsville, PA, similarly complained that the

governments should have sought and obtained divestiture relief that

would eliminate the anticompetitive effects of the merger in Schuylkill

County, PA. OSWRM alleged that the merger would leave Waste Management

as the

[[Page 31640]]

dominant commercial waste hauler in Schuylkill County.

In our response, we pointed out that the United States did not seek

relief with respect to commercial hauling in Schuylkill County because

the amount of commerce was relatively small (Eastern's operations had

less than $1 million in annual revenue), and Schuylkill County, like

Monroe County, is reasonable close to two areas in which divestitures

mandated by the pending final Judgment and the consent decree in USA

Waste case would establish independent competitiors fully capable of

disciplining an exercise of market power by Waste Management after it

merges with Eastern.

D. The Recycle Worlds Consulting Corp. Comment

RecycleWorlds, a private waste industry consultant, expressed

concern that the Final Judgment would not halt the wave of mega-mergers

currently sweeping through the nation's waste industry. In this rapidly

consolidating industry, some markets, RecycleWorlds explained, may

become dominated by a handful of large integrated waste collection and

disposal firms, and more prone to collusive price increases by the few

remaining competitors. To prevent Waste Management from squeezing waste

collection competitors by increasing the prices at landfills sites at

which they dispose their waste, RecycleWorlds would require Waste

Management to divest its waste collection operations or its waste

disposal operations in any market in which it competes with Eastern.

Failing that, RecycleWorlds urged the government not to approve any

asset divestiture under the Judgment to any of the handful of major

integrated waste firms, such as Republic, Allied or BFI. These firms

may be more inclined to cooperate with Waste Management in raising

prices in some markets in order to avoid potential price wars with

Waste Management elsewhere.

In its response, the United States noted that it does not believe

that requiring Waste Management to divest all collection or disposal

operations in any overlap market would be more procompetitive than the

divestitures ordered by the pending Judgment. Indeed, pursuing Recycle

World's alternative may result in Waste Management obtaining vast

market power in waste collection or in waste disposal services since,

in effect, if Waste Management agrees to divest one line of business it

can obtain an overwhelming market share in the other line. As to

Recycle World's second point, the United States will not approve any

proposed divestiture under the Judgment that may substantially lessen

competition in any market. To that end, the Antitrust Division recently

rejected Waste Management's proposal to divest these assets under the

decree to Allied Waste Services, Inc. Allied, the nation's third

largest waste industry firm, had agreed to acquire Browning-Ferris

Industries, Inc., the industry's second firm. The pervasive competitive

overlaps between the Allied/BFI operations and the disposal and

collection operations ordered divested under the Judgment convinced the

United States that the proposed divestiture would not advance

competition in any market.

8. Pursuant to 15 U.S.C. 16(b)-(h), the United States has arranged

to publish in the Federal Register by May 29, 1999, a copy of the

comments and the United States's responses.

9. With these steps having been taken, the parties have fulfilled

their obligations under the APPA. Pursuant to the Hold Separate Order

that the Court entered on December 31, 1998, the Court may now enter

the proposed Judgment, if it determines that the entry of the Judgment

is in the public interest. For the reasons set forth in the Competitive

Impact Statement, and in its responses to the public comments, the

United States strongly believes that the Judgment is in the public

interest and that the Court therefore promptly should enter it.

Dated: May 20, 1999.

Respectfully submitted,

Anthony E. Harris, Esquire (AH 5876)

U.S. Department of Justice, Antitrust Division, 1401 H Street, NW,

Suite 3000, Washington, DC 20530, (202) 307-6583.

Exhibit 1

Exhibit 1 was unable to be published in the Federal Register. A

copy can be obtained from the Documents Office of the U.S.

Department of Justice, Antitrust Division, 325 7th Street, NW., Room

215, Washington, DC 20530, or call (202) 514-2481. It is can also be

obtained from the Federal Register, Volume 64 No. 38, Page 9527-9541

dated Friday, February 26, 1999.

Exhibit 2

Exhibit 2 Advertising Order forms was unable to be published in

the Federal Register. A copy can be obtained from the Document

Office of the U.S. Department of Justice, Antitrust Division, 325

7th Street, NW, Room 215, Washington, DC or (202) 514-2481.

Exhibit 3

March 26, 1999.

J. Robert Kramer II,

Chief, Litigation II, Anti-Trust Division, United States Department

of Justice, 1401 H Street N.W., Suite 3000, Washington, DC 20530

Re: United States of America, State of New York, Commonwealth of

Pennsylvania, and State of Florida vs. Waste Management, Inc., Ocho

Acquisition Corp., and Eastern Environmental Services, Inc.

United States District Court/Eastern District of New York Case

Number: 98-7168

Dear Mr. Kramer: This letter will advise of my representation of

the Pulaski County (KY) Solid Waste Management District. The

District Board has approved a Resolution opposing the acquisition of

Eastern Environmental Services, Inc., by Waste Management, Inc. The

Resolution is enclosed, and is submitted to you pursuant to the

public comment period, and should be included as comment on the

acquisition and above-referenced litigation and proposed final

judgment therein.

If you need any additional information relative to this matter,

please do not hesitate to contact me at one of the above-listed

telephone numbers or address. Thank you for your assistance in this

regard.

Very truly yours,

Jeffrey Scott Lawless,

Travis, Pruitt & Lawless.

Enclosure: Resolution

cc:

Board Members

Solid Waste Coordinator

Resolution of the Board of the Pulaski County Solid Waste

Management District

Whereas the Pulaski County Solid Waste Management District is a

Solid Waste Management District established pursuant to the provisions

of Chapter 109 of the Kentucky Revised Statutes, and as such is given

the authority to operate and contract for services relative to the

operation of solid waste management facilities, and said district is

further given the authority under the Pulaski County Solid Waste

Management Ordinance, to make, amend, revoke, and enforce reasonable

rules and regulations, governing the storage, collection,

transportation, processing, and disposal of solid waste, and shall

prepare, update, implement, and maintain the Solid Waste Management

Plan for the Pulaski County geographical area, said County being a

political subdivision of the Commonwealth of Kentucky, with an

estimated population of 56,000, and;

Whereas, as of or about 1996, there were within Pulaski County,

Kentucky, two independent, locally owned entities engaged in the

collection and transportation of solid waste, said entities being ``B &

M Sanitation Service, Inc.'' and ``G & W Disposal, Inc.'' and since

that time, said entities

[[Page 31641]]

have been acquired, either by merger or stock acquisition, by Waste

Management Inc., and;

Whereas, as of 1999, there were five (5) landfills operating in the

Commonwealth of Kentucky, within a one-hundred (100) mile radius of

Pulaski County, which engage in the processing or disposal of solid

waste, being more particularly identified (with the respective owners

of each) as follows:

(1) Lilly, Kentucky (Waste Management, Inc.)

(2) Williamsburg, Kentucky (Waste Management, Inc.)

(3) Irvine, Kentucky (Waste Management, Inc.)

(4) Pulaski Landfill (Eastern Environmental Services, Inc.)

(5) Stanford, Kentucky (Republic)

and;

Whereas, the District is a party to an agreement with G & W

Disposal, Inc., (now Waste Management, Inc.) for the provision of solid

waste collection services to citizens and residents of Pulaski County,

Kentucky, and the District is further a party to an Agreement with

Pulaski Grading, Inc. (a subsidiary of Eastern Environmental Services,

Inc.), for the provision of solid waste disposal services to and for

the benefit of the citizens and residents of Pulaski county, Kentucky,

and that said agreements expire by their terms during calendar year

2002, and;

Whereas, the United States Department of Justice and others have

initiated an action in the United States District Court for the Eastern

District of New York, styled United States of America, State of New

York, Commonwealth of Pennsylvania, and State of Florida v. Waste

Management, Inc., Ocho Acquisition Corp., and Eastern Environmental

Services, Inc., 98-7168, contesting the acquisition (hereinafter the

``Acquisition'') of Eastern Environmental Services, Inc. (hereinafter

``Eastern''), and Waste Management, Inc., (hereinafter ``Waste

Management'') and according to the pleadings of record therein, the

Acquisition ``would substantially reduce competition in disposal of

municipal solid waste in'' five highly concentrated markets, `'and that

it would substantially lessen competition in commercial waste

collection services in four highly concentrated'' markets, and further,

it is alleged that ``the loss of competition would likely result in

consumers paying higher prices and receiving fewer or lesser quality

services for the collection and disposal of waste'', and;

Whereas on December 31, 1998, the Plaintiffs in the aforementioned

litigation filed a Proposed Settlement that would permit Waste

Management to complete its acquisition of Eastern, but would require

said Defendants to divest certain waste collection and disposal assets

in such a way as to preserve competition in the market areas identified

in the pleadings; and,

Whereas, pursuant to the Competitive Impact Statement filed of

record in the aforementioned action:

Significant new entry into [affected waste collection and

disposal] markets would be difficult, time consuming, and unlikely

to occur soon. Many customers of commercial waste collection firms

have entered into ``Evergreen'' contracts, tieing them to a market

incumbent for indefinitely long periods of time. In competing for

uncommitted customers, market incumbents can price discriminate,

i.e. selectively (and temporarily) charge unbeatably low prices to

customers targeted by entrants, a tactic that would strongly

discourage a would-be competitor for competing for such accounts,

which, if won, may be very unprofitable to serve. The existence of

long-term contracts are price discrimination substantially increases

any would-be new entrant's costs and time necessary for it to build

its customer base and obtain efficient scale and route density to

become an effective competitor in the market.

and, the District does hereby adopt said statement as its own finding,

as a correct and accurate statement of the nature of waste collection

activity as its exists in Pulaski County, Kentucky, as the District has

in the past entered into such extended contracts for the provision of

collection and disposal services (specifically, the most recent

contracts being of a ten year duration), and;

Whereas the District does hereby make a finding that the

acquisition by Waste Management of aforementioned Pulaski County-area

solid waste collectors, and the proposed acquisition by Waste

Management of Eastern, significantly reduces the competitive options of

the District and its citizens, for the collection and disposal of

residential and commercial waste, and would likely result in an

increase (or a refusal to negotiate further reductions) in the fees and

charges for collection and disposal of the residential and commercial

waste of the District and its citizens, and;

Whereas, as was noted in the Competitive Impact Statement, and the

District does hereby find:

Entry into the disposal of municipal solid waste is difficult.

Government permitting laws and regulations make obtaining a permit

to construct or expand a disposal site an expensive and time-

consuming task. Significant new entry into these markets is unlikely

to occur in any reasonable period of time, and is not likely to

prevent exercise of market power after the [Acquisition].

and

[In the Pulaski County geographic area] Waste Management's

acquisition of Eastern would remove a significant competitor in

disposal of municipal solid waste. With the elimination of Eastern,

[Waste Management] will no longer compete as aggressively since it

will not have to worry about losing business to Eastern. The

resulting substantial increase in concentration, loss of

competition, and absence of reasonable prospect of significant new

entry or expansion by market incumbents likely ensure that customers

will pay substantially higher prices for disposal of municipal solid

waste, collection of [residential or] commercial waste, or both,

following the [Acquisition], and;

Whereas, the District desires to eliminate the anti-competitive

effects of the Acquisition in collection and disposal of municipal

solid waste from Pulaski County, Kentucky.

Now, therefore, be it hereby resolved, by the Board of the Pulaski

County Solid Waste Management District, as follows:

(A) That the Pulaski County Solid Waste Management District opposes

and objects to the Acquisition of Eastern Environmental Service, Inc.,

by Waste Management, Inc.

(B) The the Pulaski County Solid Waste Management District

respectfully requests that the United States Department of Justice,

Anti-Trust Division, modify the proposed Final Judgment as follows:

1. That Eastern Environmental Services, Inc., be required to

sell, on or before a reasonable date certain, its interest in the

Pulaski Landfill, (located at Dixie Ben Road, Pulaski County,

Kentucky, being License Number 100-00008, issued by the Natural

Resources and Environmental Protection Cabinet, Division on Waste

Management), to the Pulaski County Solid Waste Management District,

Pulaski County, Kentucky, or any other purchaser acceptable to both

the United States, the Commonwealth of Kentucky, and the Pulaski

County Solid Waste Management District.

Or alternatively:

2. That Waste Management, Inc. or Eastern Environmental

Services, Inc., be required to open and obtain a continuous

operating permit issued by the Kentucky Department of Natural

Resources for the operation of a landfill to be located in Pulaski

County, Kentucky, and that said landfill be thereupon leased to the

District for a term of years, subject to the approval of the

Commonwealth of Kentucky, and the District.

Or alternatively:

3. That Waste Management be required to develop, construct, and

implement an alternative solid waste management or disposal

facility, whereby the efficiency of extracting ``recovered

material'' is increased, waste requiring disposal is reduced, solid

waste is managed in an environmentally

[[Page 31642]]

protected manner, and solid waste is converted to beneficial by-

products or materials; and that such facility be operated jointly

with, or solely by, the Pulaski County Solid Waste Management

District, for a period not to exceed twenty years.

(C) That this Resolution be communicated to the United States

Department of Justice, Anti-Trust Division, to the attention of the

following: J. Robert Kramer, II, Chief, Litigation II, Anti-Trust

Division, United States Department of Justice, 1401 H Street N.W.,

Suite 3000, Washington, DC 20503.

and that said comments be evaluated by the United States Department of

Justice, so that the concerns of the residents and citizens of Pulaski

County, Kentucky may be addressed and included in such manners as the

United States Department of justice Antitrust Division may, under the

circumstances, consider appropriate.\1\

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\1\ Although some acquisitions, like some snakes, are

beneficial, the Kentucky Court of Appeals once noted that ``may

snakes are poisonous, and only the zoologist, herpetologist, or

experienced woodsman is able to distinguish those which are not''

Lawson v. Commonwealth, 164 S.W.2d 972 (1942). The District would

therefore defer to the good judgment of the ``experienced woodsmen''

of the Department of Justice's Anti-Trust Division.

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Adopted this the 18th day of March, 1999.

Pulaski County Solid Waste Management District

Charles T. Estes,

Board Chairman.

Attest: Donna Turner,

Secretary.

Jeffrey Scott Lawless, Attorney,

Travis, Pruitt & Lawless, P.O. Drawer 30, Somerset, KY 42502-0030.

Jeffrey Scott Lawless, Esquire,

Travis, Pruitt & Lawless, 207 East Mt. Vernon Street, Post Office

Drawer 30, Somerset, KY 42502-0030

Re: Comment on Proposed Final Judgment in United States, State of

New York, et al, v. Waste Management, Inc., Eastern Environmental

Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

Dear Mr. Lawless: This letter responds to your letter of March

26, 1999 commenting on the Final Judgment in this case on behalf of

your client, the Pulaski County, Kentucky Solid Waste Management

District. The Amended Compliant in this case charged, among other

things, that Waste Management's acquisition of Eastern Environmental

would substantially lessen competition in collection or disposal of

municipal solid waste in 12 markets in New York, Pennsylvania, and

Florida. The proposed consent decree, now pending in federal

district court in Brooklyn, New York, would settle the case by

requiring the defendants to divest a number of waste collection

routes and waste disposal facilities in the markets alleged in the

Complaint.\1\ This relief, if approval by the Court, would establish

one or more new competitors in each of the markets for which relief

was sought, replacing the competitive rivalry lost when Waste

Management acquired Eastern Environmental.

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\1\ The markets alleged in the Amended Complaint, and for which

divestiture relief was obtained in the Final Judgment, include the

disposal of municipal solid waste in the Pittsburgh, Carlisle-

Chambersburg, and Bethlehem, PA areas, and in New York City, NY

(commercial and residential); and collection of commercial waste in

the Carlisle-Chambersburg, Bethlehem, and Scranton, PA; suburban

Tampa (Hillsborough Co.) and Miami/Ft. Lauderdale, FL (Dade and

Broward counties) areas.

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In your letter, you express concern that neither the complaint

nor the proposed Judgment address the competitive effects of the

merger in the collection and disposal of residential waste in

Pulaski County, Kentucky. A combination of Waste Management and

Eastern Environmetal would control four of the five landfills within

a 100 mile radius radius of Pulaski County.

The United States did not allege that a combination of Waste

Management and Eastern Environmental would raise serious competitive

problems in the collection and disposal of Pulaski County because

the county has long-term agreements with Waste Management and with

Eastern Environmental, which provide that the residential waste will

be collected by Waste Management and that disposal of that waste

will be handled by Eastern Environmental. These agreements, which do

not expire until at 2002, effectively preclude competition between

Waste Management and Eastern for the county's collection and

disposal of waste. In addition, in this case, we believe that it

would be difficult to predict what the competitive landscape will

look like in 2002 when Pulaski County is once again in the market

for a firm to collect and to dispose of its resident's waste. For

that reason, we were not prepared to allege, or attempt to prove,

that the proposed merger would be anticompetitive in Pulaski County,

KY.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Exhibit 4

J. Robert Cramer, II

Chief, Litigation II Section, Antitrust Division, U.S.

Department of Justice, 1401 H Street NW, Suite 3000, Washington, DC

20530

cc: Pennsylvania Attorney General Fisher

Dear J. Robert Cramer, II: The Pocono Mountains Chamber of

Commerce Environmental Committee would like to offer its comments on

the issue referenced above.

Our Committee serves the Chamber of Commerce's Executive

Committee and Board of Directors, reviewing environmental issues and

advising on appropriate Executive Committee and Board actions. The

Environmental Committee also comments directly, where appropriate,

on environmental issues impacting Monroe County. The Environmental

Committee feels the referenced merger does not serve the best

interests of Monroe County citizens.

The results of the merger is that one parent company will

control collection and disposal of a disproportionate amount of the

county's municipal waste. The county's other haulers are independent

operators. These haulers will be unable to compete for commercial

waste collection and municipal collection contracts. And, since none

of these smaller companies owns a disposal facility, Waste

Management will control their tipping fees. Recent history has shown

that the independents are charged higher tipping fees than Waste

Management charges its own haulers.

Since the merger a number of commercial businesses have

contacted the Environmental Committee, reporting that their

commercial collection rates have nearly tripled. While our committee

understands that Waste Management has submitted a divestiture plan

intended to alleviate concerns of this nature, this plan has done

nothing to relieve the onerous effect the merger has had on Monroe

County.

Our informed opinion is that approval of the merger will

adversely effect the interest of Monroe County's citizens and

businesses.

Thank you for the opportunity to file these comments. Please

contact us if we can answer any other questions.

Respectfully,

Michael Beckenbach,

Chairman, Pocono Mountains Chamber of Commerce Environmental Committee.

Mr. Michael Beckenbach,

Chairman, Environment Committee, Pocono Mountains Chamber of

Commerce, c/o Gallagher & Gallagher, Stroudsburg Division, 701 Main

Street, Stroudsburg, PA 18360

Re: Comment on Proposed Final Judgment in United States, State of

New York, et al. v. Waste Management, Inc., Eastern Environmental

Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

Dear Mr. Beckenbach: This letter responds to your letter of

April 10, 1999 commenting on the Final Judgment in the above case.

The Amended Complaint in the case charged, among other things, that

Waste Management's acquisition of Eastern Environmental would

substantially lessen competition in collection or disposal of waste

in a number of markets throughout the Northeast and in Florida. In

northeastern Pennsylvania, the Amended Complaint alleged, the merger

would substantially reduce competition in the collection of

commercial waste in the Scranton/Wilkes-Barre market. The proposed

Final Judgment now pending in federal district court in Brooklyn,

New York would settle the case with respect to the Scranton market

by, inter alia, requiring Waste Management to divest its front-end

loader commercial waste

[[Page 31643]]

collection routes that service Luzerne and Lackawanna counties,

which comprise much of the greater metropolitan Scranton/Wilkes-

Barre, PA area. This divestiture, if approved by the Court, would

establish an independent competitor in the market for which relief

was sought, and replace the competitive rivalry lost when Waste

Management acquired Eastern Environmental.

In your letter, you express concern that neither the complaint

in this case nor the proposed consent decree address the competitive

effects of the merger in Monroe County, PA, in which a combination

of Waste Management and Eastern would dominate municipal and

commercial waste collection services, controlling over eighty

percent of all waste collected. The combined firm has already

substantially increased its prices for collection of municipal

waste. We believe that the proposed Judgment, and the pending decree

in the earlier USA Waste/Waste Management case,\1\ address this

competitive issue.

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\1\ United States v. USA Waste Services, Inc., Waste Management,

Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998). The

consent decree in the USA Waste case ordered Waste Management to

divest its commercial waste collection routes that service the City

of Allentown, and Lehigh and Northampton counties. Those routes were

sold to Republic Services, Inc., which installed a large independent

competitor in the commercial waste collection market in the

Allentown, PA area.

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Monroe County is a thinly populated area that abuts and lies

directly southeast of the Scranton/Wilkes-Barre area. Its business

and population center--Stroudsburg--is about 30 miles from the

Scranton/Wilkes-Barre area and about 25 miles north of the city of

Allentown and Northampton and Lehigh counties in Pennsylvania.

The divestitures of commercial waste collection routes ordered

by this Judgment and the decree in the USA Waste case would

establish independent commercial waste haulers in the Scranton/

Wilkes-Barre and Allentown areas. Given the proximity of these

markets to Monroe County, the rivalry offered by the new competitors

should be sufficient to discipline any post-merger exercise of

market power by the combined Waste Management and Eastern in the

collection of commercial waste. These new competitors may also be

capable of vigorous competition in the collection of the county's

residential waste, a market not addressed in our complaint or the

consent decree.

In addition, the next two largest waste haulers in Monroe County

following Waste Management's acquisition of Eastern would be Hopkins

and Muscaro, each of which is about the same size as Eastern in

Monroe County. Thus, after the merger, there may be as many as four

other competitors in the market--Hopkins, Muscaro, and the two

decree firms--capable of competing as vigorously as Eastern prior to

its acquisition by Waste Management.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Exhibit 5

J. Robert Kramer, II,

Chief, Litigation II Section, Antitrust Division, U.S. Department of

Justice, 1401 H Street, NW., Suite 3000, Washington, DC 20530

Re: United States, et al. v. Waste Management, Ocho Acquisition

Corp. and, Eastern Environmental Services, Inc. Civil No. 98 CV 7168

(FB)

Dear Mr. Kramer: On behalf of the residents of Schuylkill

County, please consider the contents of this letter as public

comment in response to a proposed final judgment in the above

referenced matter which was advertised in the Federal Register on

February 26, 1999 pursuant to the provisions of the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(b)-(h).

The County of Schuylkill is a political subdivision established

by Pennsylvania law and is authorized by Act 101, the Municipal

Waste Planning, Recycling and Waste Reduction Act of 1988, to

provide for disposal capacity for municipal waste generated within

its boundaries. For the past nine years, this has been accomplished

by providing individuals, municipalities and the commercial sector

reasonable and cost effective municipal waste collection and

disposal alternatives through capacity assurance and operation

contracts with permitted waste processing and disposal facilities.

The County also licenses haulers of municipal waste, which allows

the County to properly track the disposition of its waste. The

ability of the County to provide this valuable service has been

substantially impaired by the recent merger of Waste Management,

Inc. and Eastern Environmental Services, Inc. The County believes

that the proposed settlement does not meet the requirements of the

Clayton Antitrust Act and is not in the public interest for reasons

listed below.

1. Schuylkill County is located in East Central Pennsylvania and

is in fact adjacent to market areas named in the complaint as being

adversely affected from a competitive standpoint by the merger. A

regional map is enclosed with this letter identifying the municipal

waste hauling, processing and disposal operations that serve

Schuylkill County. The County has identified that the result of the

merger would be that one company would control the collection and

disposal of approximately 66% of the County's municipal waste

stream. This figure is backed-up by two sources of information: (1)

PA Dept. Of Environmental Protection's Waste Destination Reports and

(2) the County's hauler licensing database which indicates the

merged companies would own 95% of the commercial front-end load

container capacity; 44% of the rear-load capacity; and 60% of the

roll-off container capacity.

2. Remaining haulers within the county are small, independent

companies that are unable to compete in two important and specific

areas, commercial waste collection and municipal contracting. The

independent haulers do not have the necessary equipment to conduct

commercial collection effectively. Also, the small companies cannot

compete effectively for large municipal contracts. Typically, the

only hauling companies that bid on municipal contracts in Schuylkill

County are Waste Management, Pine Grove Hauling Co. (Eastern) and

J.P. Mascaro. Mascaro usually is the high bidder due to the long

distance to their nearest disposal facility. The result of the

merger has been, and will be, a substantial reduction in competition

in those specific areas.

3. Since the merger, it is well documented that Waste Management

has raised its rates significantly for the collection of commercial

and residential waste.

4. The proposed settlement agreement has already been

implemented with the requirement that the companies divest certain

relevant assets. However, these divestitures have no effect on the

competitive disadvantages created by the merger in this area.

5. The County encourages municipal governments to join together

to bid waste collection contracts to more cost effectively manage

their municipal waste streams. However, with no competitive bidders,

those efforts will fail.

Consequently, the County feels that the proposed judgement

provides no relief in the area from the anti-competitive effects of

the merger of Waste Management and Eastern Environmental, and the

public interests will not be served by the approval of the proposed

consent decree.

The County appreciates this opportunity to file written

comments. Please contact me if you have any questions or require

additional information.

Sincerely,

Wayne Bowen,

County Environmental Coordinator.

Enclosures.

cc:

Board of County Commissioners

U.S. Senator Specter

U.S. Senator Santorum

U.S. Rep. Holden

Senator Rhoades

Rep. Argall

Rep. Allen

Rep. Lucyk

William McDonnell, PADEP NE Regional Office

Jim Snyder, PADEP Central Office

Bob Shafer

Michael O'Rourke, Esq.

Mark Scarbinsky

Mary Kay Bernosky, Esq.

The Major MSW Hauling Operations and Processing/Disposal

Facilities Serving Schuylkill County Map of April 1999 was not able

to be published in the Federal Register. A copy can be obtained from

the Documents Office of the U.S. Department of Justice, Antitrust

Division, 325 7th Street, NW., Room 215, Washington, DC 20530 or

(202) 514-2481.

[[Page 31644]]

Major MSW Hauling Operations and Processing/Disposal Facilities

Servicing Schuylkill County, April 1999

Hauling Operations

In-County

Waste Management

1. Pottsville (consolidated with Deitrick Coal Twp.)

2. Frackville (consolidated with Deitrick Coal Twp.)

Eastern Environmental

3. Pine Grove Hauling, Port Clinton (consolidated with Deitrick

Coal Twp.)

4. Pine Grove Hauling, Schuylkill Haven (formerly Minchoff)

(consolidated with Deitrick Coal Twp.)

Other major or potential major competitors

None

Out-of-County

Waste Management

5. Deitrick Sanitation, Coal Twp., Northumberland Co.

6. Waste Management, Allentown, Lehigh County

7. Waste Management, Scranton, Lackawanna County

8. Grand Central Sanitation, Pen Argyl, Northampton County

Eastern Environmental

9. Altamere, Mt Carmel, Northumberland Co. (consolidated with

Deitrick Coal Twp.)

10. Pine Grove Hauling, Lansford, Carbon County (formerly

Knepper Sanitation) (consolidated with Deitrick Coal Twp.)

Other Major or Potential Major Competitors

11. BFI, Leesport, Berks Co.

12. Mascaro, Nantocke, Luzerne Co., Reading, Berks Co., Lehigh

Co.

13. Republic, Allentown, Lehigh Co. (acquired routes from Waste

Management Allentown per Justice Department)

14. Slusser, Hazleton, Luzerne Co.

15. Carbon Service, Lehighton, Carbon Co.

Disposal/Transfer Facilities

In-County

Waste Management

16. BSC transfer station, Pottsville (currently not accepting

waste)

Eastern Environmental

17. Coldren Transfer Station, Port Clinton (Pine Grove Hauling)

18. Pine Grove Landfill

Other Major or Potential Major Competitors

19. Tamaqua Transfer Station

20. NSLA Transfer Station

21. CES Landfill, Foster Twp.

Out-of-County

Waste Management

22. Deitrick Transfer Station Coal Twp., Northumberland Co.

23. Transfer Station, New Smithville, Lehigh Co.

24. Grand Central Landfill, Pen Argyl, Northampton Co.

25. Dauphin Meadows Landfill, Dauphin Co.

26. Modern Landfill, York Co.

27. Pottstown Landfill, Montgomery Co.

28. G.R.O.W.S. Landfill, Bucks Co.

29. Tullytown Landfill, Bucks Co.

Eastern Environmental

30. Bethlehem Landfill, Northampton, Co.

31. Alliance Landfill, Lackawanna Co.

Other Major or Potential Major Competitors

32. Mascaro Transfer Facility, Lehigh Co.

33. Keystone Landfill, Lackawanna Co.

34. Chrin Landfill, Northampton Co.

35. Pioneer Crossing Landfill (Mascaro), Berks Co.

36. Conestoga Landfill (BFI), Berks Co.

Impact of Waste Management/Eastern Merger

Number of hauling operations controlled by merger--10 (67%)

Controlled by others--5 (33%)

Number of disposal facilities controlled by merger--9 (64%)

Controlled by others--5 (36%)

Number of transfer facilities controlled by merger--4 (57%)

Controlled by others--3 (43%)

Total controlled by merger--23 (64%)

Controlled by others--13 (36%)

Mr. Wayne Bowen,

Environmental Coordinator, Office of Solid Waste and Resource

Management, Schuykill County Courthouse, 401 North Second Street,

Pottsville, Pennsylvania 17901-2528

Re: Comment on Proposed Final Judgment in United States, State of

New York, et al. v. Waste Management, Inc., Eastern Environmental

Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

Dear Mr. Bowen: This letter responds to your letter of April 26,

1999 commenting on the Final Judgment in the above case. The Amended

Complaint in the case charged, among other things, that Waste

Management's acquisition of Eastern Environmental would

substantially lessen competition in collection or disposal of waste

in a number of markets throughout the Northeast and in Florida. In

south central Pennsylvania, the Amended Complaint alleged, the

merger would substantially reduce competition in the collection of

commercial waste in the Scranton/Wilkes-Barre market. The proposed

Final Judgment now pending in federal district court in Brooklyn,

New York would settle the case with respect to the Scranton/Wilkes-

Barre market by, inter alia, requiring Waste Management to divest

its front-end loader commercial waste collection routes that service

Luzerne and Lackawanna counties, which comprise much of the greater

metropolitan Scranton/Wilkes-Barre PA area. This divestiture, if

approved by the Court, would establish an independent competitor in

the market for which relief was sought, and replace the competitive

rivalry lost when Waste Management acquired Eastern Environmental.

In your letter, you express concern that neither the Complaint

in this case nor the proposed Judgment address the competitive

effects of the merger in Schuylkill County, PA, in which a

combination of Waste Management and Eastern Environmental would

dominate municipal and commercial waste collection services,

controlling over eighty percent of all waste collected. The combined

firm has already substantially increased its prices for collection

of municipal waste. We believe that the proposed Judgment, and the

pending decree in the earlier USA Waste/Waste Management case,\1\

may address the competitive issues you have raised.

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

\1\ United States v. USA Waste Services, Inc., Waste Management,

Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17, 1998). The

consent decree in the USA Waste case ordered Waste Management to

divest its commercial waste collection routes that service the City

of Allentown, and Lehigh and Northampton counties. Those routes were

divested to Republic Services, Inc., which installed a very large

independent competitor into the commercial waste collection market

in the Allentown, PA area.

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

Schuylkill County is a thinly populated area that abuts and lies

directly southwest of the Scranton/Wilkes-Barre area. Though the

county's business and population center, Pottsville, is about 40

miles from the Scranton/Wilkes-Barre area, it is only about 25 miles

west of the city of Allentown and Northampton and Lehigh counties in

Pennsylvania.

As you point out, the Final Judgment does not require Waste

Management to divest any of the commercial route operations that it

acquired from Eastern in Schuylkill County. The Division did not

seek divestiture relief with respect to that market for several

reasons. First, the total amount of commercial waste collection

business that Waste Management assumed through acquiring Eastern was

small, less than $1 million in annual revenues. Second, Schuylkill

County abuts several counties in which the Judgment required Waste

Management to divest route operations. The divestitures of

commercial waste collection routes mandated by this Judgement and

the decree in the USA Waste case, once implemented, would establish

relatively large independent commercial waste haulers in both the

Scranton/Wilkes-Barre and Allentown areas. Given the proximity of

these markets to Schuylkill County, rivalry offered by the new

competitors may be sufficient to discipline any exercise of market

power in commercial waste collection by the combined Waste

Management and Eastern. Also, the new commercial waste hauling

competitors established by these judgments may be capable of

offering vigorous competition in the collection of the country's

residential waste, a market not addressed in our complaint or the

consent decree.\2\

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

\2\ In general, barriers to entry into the collection of

residential waste are not as formidable as those that impede entry

into the collection of commercial waste. For this reason, the

Division did not challenge the combination's effect on the market

for collecting the county's residential waste. Of course, entry into

collection of residential waste could be very difficult in those

situations in which the area's disposal facilities are controlled by

a waste collection rival. That is not the case here.

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

Finally, I should point out that the Judgment and the decree in

the USA Waste case mandate that Waste Management divest two large

landfills, Modern and Bethlehem, that you indicate also service the

Schuylkill County market. The divestitures of these landfills will

introduce additional competition in the disposal of waste from the

Schuylkill County area.

Thank you for bringing your concerns to our attention; we hope

this information will

[[Page 31645]]

help alleviate them. Pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. Sec. 16(d), a copy of your comment and this

response will be published in the Federal Register and filed with

the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Exhibit 6

April 22, 1999.

J. Robert Kramer, II,

Chief, Litigation II Section, Antitrust Division, U.S. Department of

Justice, 1401 H Street, NW, Suite 3000, Washington, DC 20530

Re: United States, et al. v. Waste Management, Inc., Ocho

Acquisition Corp. and Eastern Environmental Services, Inc. Civil No.

98 CV 7168 (FB)

Dear Mr. Kramer: Please consider the contents of this letter as

public comment in response to an invitation for public comment on

proposed Final Judgment in the above referenced matter which was

advertised in the Federal Register on February 26, 1998 pursuant to

the provision of the Antitrust Procedures and Penalties Act, 15

U.S.C. 16(b)-(h).

The Monroe County Municipal Waste Management Authority is a

political subdivision established by Pennsylvania law under the

Municipal Authorities Act, of 1945. The Authority by agreement with

the County, and as authorized by ACT 101 is responsible for

implementing the County's Municipal Waste Management Plan. The

Authority operates a waste management system highlighted by the

licensing of all municipal waste haulers within the County, and

providing individuals, municipalities, and companies reasonable and

cost effective municipal waste collection and disposal alternatives

through contracts with disposal and transfer facilities. The ability

of the Authority to provide this service has been substantially

impacted by the recent merger of Waste Management Inc. and Eastern

Environmental Services, Inc. The Authority believes that the

proposed settlement does not meet the requirements of the Clayton

Antitrust Act, and is not in the public interest for the following

reasons.

Monroe County is located in northeastern Pennsylvania near, and

in fact adjacent to market areas named in the complaint as being

adversely affected from a competitive standpoint by the merger. A

regional map is enclosed with these comments identifying the

location in Monroe County. In earlier comments, a copy of which is

enclosed, the Authority identified that the net result of the merger

would be that one company would control the collection of

approximately 72% of the County's municipal waste stream, and the

disposal of approximately 82% of the municipal waste generated

within the county.

Remaining haulers within the County are small, independent

companies which are unable to compete in two important and specific

areas, commercial waste collection and municipal contracting.

Furthermore, none of these small independent haulers own disposal

facilities, and are required to dispose of the waste at facilities

owned by Waste Management which controls disposal fees, often

charging independent haulers a higher tipping fee for disposal than

is charged to its own hauling company.

The independent haulers do not have the necessary equipment to

conduct commercial collection effectively, or to transport municipal

waste loads long distance to obtain competitive tipping rates. Also,

the small companies cannot compete effectively for large municipal

contracts. In addition to Waste Management and Eastern, only one

company has responded to municipal requests for competitive bidding.

The result of the merger has been, and will be, a substantial

reduction in competition in those specific areas.

Since the above merger, it is well documented that Waste

Management has nearly tripled rates for the commercial collection of

municipal waste. Copies of relevant information in this regard is

enclosed. The Authority has been inundated with telephone calls and

written communications complaining of the new pricing structures.

The Authority has been urging municipal governments to join

together to bid waste collection contracts to more effectively

mandate the municipal waste stream. However, with no competitive

bidders, those efforts will fail.

The proposed settlement agreement has already been implemented

with the requirement that the companies divest certain relevant

assets. However, these divestitures have had no effect on the

competitive disadvantages created by the merger in this area.

Consequently, we feel that the proposed judgment provides no

relief in this area from the anti-competitive effects of the merger

of Waste Management and Eastern Environmental, and the public

interest will not be served by the approval of the consent degree in

this case.

We appreciated the opportunity to file written comments. Kindly

contact the undersigned if we can provide further information, or

answer any questions.

Sincerely,

Dean D.W. DeLong,

Executive Director.

Enclosures to Exhibit 6 letter from Dean D.W. DeLong, Executive

Director of Municipal Waste Management Authority of Stroudsburg, PA

was unable to be published in the Federal Register. A copy be

obtained form the Document Office of the U.S. Department of Justice,

Antitrust Division, 325 7th Street, N.W., Room 215, Washington, D.C.

20530 or (202) 514-2481.

Mr. Dean D.W. DeLong,

Executive Director, Monroe County Municipal Waste Management

Authority, 912 Main Street, Suite 203, Stroudsburg, PA 18360

Re: Comment on Proposed Final Judgment in United States, State of

New York, et al. v. Waste Management, Inc., Eastern Environmental

Services, Inc., No. 98 CV 7168 (JB) (E.D.N.Y., December 31, 1998)

Dear Mr. DeLong: This letter responds to your letter of April

22, 1999 commenting on the Final Judgment in the above case. The

Amended Complaint in the case charged, among other things, that

Waste Management's acquisition of Eastern Environmental would

substantially lessen competition in collection or disposal of waste

in a number of markets throughout the Northeast and in Florida. In

northeastern Pennsylvania, the Amended Complaint alleged, the merger

would substantially reduce competition in the collection of

commercial waste in the Scranton/Wilkes-Barre market. The proposed

Final Judgment now pending in federal district court in Brooklyn,

New York would settle the case with respect to the Scranton market

by, inter alia, requiring Waste Management to divest its front-end

loader commercial waste collection routes that service Luzerne and

Lackawanna counties, which comprise much of the greater metropolitan

Scranton/Wilkes-Barre, PA area. This divestiture, if approved by the

Court, would establish an independent competitor in the market for

which relief was sought, and replace the competitive rivalry lost

when Waste Management acquired Eastern Environmental.

In your letter, you express concern that neither the Complaint

in this case nor the proposed Judgment address the competitive

effects of the merger in Monroe County, PA, in which a combination

of Waste Management and Eastern Environmental would dominate

municipal and commercial waste collection services, controlling over

eighty percent of all waste collected. The combined firm has already

substantially increased its prices for collection of municipal

waste. We believe that the proposed Judgment, and the pending decree

in the earlier USA Waste/Waste Management case,\1\ address the

competitive issues you have raised.

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

\1\ United States v. USA Waste Services, Inc., Waste Management,

Inc., et al., No. 1:98 CV 1616 (N.D. Ohio, filed July 17,1998). The

consent decree in the USA Waste case ordered Waste Management to

divest its commercial waste collection routes that service the City

of Allentown, and Lehigh and Northampton counties. Those routes were

divested to Republic Services, Inc., which installed a large

independent competitor in the commercial waste collection market in

the Allentown, PA area.

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

Monroe county is a thinly populated area that abuts and lies

directly southeast of the Scranton/Wilkes-Barre area. Its business

and population center--Stroudsburg--is about 30 miles form the

Scranton/Wilkes-Barre area and about 25 miles north of the city of

Allentown and Northampton and Lehigh counties in Pennsylvania.

The divestitures of commercial waste collection routes mandated

by this Judgment and the decree in the USA Waste case, once

implemented, would establish a relatively large independent

commercial waste hauler in both the Scranton/Wilkes-Barre and

Allentown areas. Given the proximity of these markets to Monroe

County, the rivalry offered by the new competitors should be

sufficient to discipline any exercise of market power by the

combined Waste Management and Eastern Environmental in the

collection of commercial waste. The new competitors established by

these antitrust judgments may also be capable of vigorous

competition in

[[Page 31646]]

the collection of the county's residential waste, a market not

addressed in our complaint or the consent decree.\2\

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

\2\ In general, barriers to entry into the collection of

residential waste are not as formidable as those that impede entry

into the collection of commercial waste. For this reason, the

Division did not challenge the combination's effect on the market

for collecting the county's residential waste. Of course, as you

point out, entry into collection of residential waste could be very

difficult in those situations in which the area's disposal

facilities are controlled by a waste collection rival. That is not

the case here. In Monroe County, there is at least one other major

independent landfill (owned by DeNaples) that accepts significant

amounts of the county's waste. Moreover, the closest landfill owned

by Eastern Environmental apparently accepted less than 200 tons of

waste annually from Monroe County, and hence did not compete

directly against the Waste Management landfill.

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

In addition, the next two largest waste haulers in Monroe County

following Waste Management's acquisition of Eastern would be Hopkins

and Muscaro, each of which is about the same size as Eastern in

Monroe County. Thus, after the merger, there may be as many as four

other competitors in the market--Hopkins, Muscaro, and the two

decree firms--capable of competing as vigorously as Eastern prior to

its acquisition by Waste Management.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Exhibit 7

Exhibit 7 letter with attachments from Peter Anderson of Recycle

Worlds Consulting of Madison, WI dated April 27, 1999 was unable to

be published in the Federal Register. A copy can be obtained from

the Document Office of the U.S. Department of Justice, Antitrust

Division, 325 7th Street, NW, Room 215, Washington, DC 20530 or

(202) 514-2481.

May 20, 1999.

Mr. Peter Anderson,

President, RecycleWorlds Consulting Corp., 4513 Vernon Blvd., Suite

15, Madison, Wisconsin 53705-4964

Re: Comment on Proposed Final Judgment in United States, State of

New York, et al. v. Waste Management, Inc., Eastern Environmental

Services, Inc., No. 98 CV 7168(JB) (E.D.N.Y., December 31, 1998)

Dear Mr. Anderson: This letter responds to your April 27, 1999

comment on the proposal Final Judgment in the above case. The

Amended Complaint charged, among other things, that Waste

Management's acquisition of Eastern Environmental would

substantially lessen competition in collection or disposal of

municipal solid waste in 12 markets in New York, Pennsylvania, and

Florida. The proposed consent decree, now pending in Federal

district court in Brooklyn, New York, would settle the case by

requiring the defendants to divest a number of waste collection

routes and waste disposal facilities in the markets alleged in the

Complaint.\1\ This relief, if approved by the Court, would establish

one or more new competitors in each of the markets for which relief

was sought, replacing the competitive rivalry lost when Waste

Management acquired Eastern Environmental.

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

\1\ The markets alleged in the Amended Compliant, and for which

divestiture relief was obtained in the Final Judgment, include the

disposal of municipal solid waste in the Pittsburgh, Carlisle-

Chambersburg, and Bethlehem, PA areas, and in New York City, NY

(commercial and residential); and collection of commercial waste in

the Carlisle-Chambersburg, Bethlehem, and Scranton, PA; suburban

Tampa (Hillsborough Co.) and Miami/FT. Lauderdale, FL (Dade and

Broward counties) areas.

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

In a transaction approved by the United States and the State of

New York, Waste Management divested to Republic Services, Inc. the

rights to Eastern's proposal to dispose of New York City's

residential waste in early January 1999, See Judgment section IV(B),

On April 20, 1999, the United States, however, rejected Waste

Management's proposal to sell the other waste collection and

disposal assets under this decree to Allied Waste Industries, Inc.

(``Allied''). Such a sale, we concluded, would raise serious

competitive concerns in waste collection or disposal, or both, in

virtually all of the markets for which the Judgment has ordered

relief.\2\ Of course, if Waste Management has not divested these

assets to an acceptable purchaser within five days after entry of

the Judgment, the United States will promptly seek, and the Court

will likely appoint, a trustee to complete the sale. See Judgment

sections V(A) and (B) and Hold Separate Stipulation and Order,

section IV(F).

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

\2\ In early March 1999, Allied announced that it had agreed to

acquire Browning-Ferris Industries, Inc., for $7.5 billion. Allied

is the Nation's fourth largest waste collection and disposal firm;

BFI is the Nation's second largest waste firm. That combination

would, by itself, raise serious competition concerns in a number of

waste disposal and collection markets throughout the country.

Selling the assets under the decree to a combination of Allied/BFI

would result in a significant reduction in actual and potential

competition in waste disposal services thought the Northeast--a

regional market including major cities along the Eastern seaboard,

such as New York, Boston, Philadelphia, Baltimore and Washington--as

well as a reduction in localized competition for waste disposal

services in the Pittsburgh, PA area, and for commercial waste

collection services in the Miami/Ft. Lauderdale, FL area, and

potentially in the Carlisle-Chambersburg, PA area.

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

In your comment, you assert that the diversitures ordered by

this Judgment do not go far enough to eliminate the competitive

problems in the Nation's waste industry. To be sure, the decree in

this case and in other recent Government antitrust cases (e.g.,

United States v. USA Waste, Inc., Waste Management, Inc., No. 1:98

1616 (N.D. Ohio, filed July 21, 1998)) have not prevented the wave

of consolidations, currently sweeping through this industry. Indeed,

several recent mega mergers have significantly reduced the number of

major competitors, and that has perhaps made several waste markets

and more susceptible to collusive post-merger price increases. To

cure these competitive problems, you propose a fairly ``dramatic

remedy,'' i.e., require that Waste Management divest all of its

waste disposal or collection operations in markets where there are

substantial competitive overlaps between its operations and those of

Eastern. If this not not done, then you propose that we ensure that

the assets divested under the Judgment are not sold to a large

integrated national waste firm, but to a municipal agency or a small

stand-along independent--entities that, in your view, may have a

greater incentive to vigorously compete against defendants'

operations.

We do not believe that requiring Waste Management to divest all

of its waste collection or disposal operations in any market in

which its operations overlap with Eastern's would produce a more

procompetitive result than the relief currently in the Judgment.

Indeed, pursuing your proposal would permit Waste Management to

acquire the lion's share of any number of waste collection or

disposal markets, since, in effect, you propose that if Waste

Management agrees to abandon one line of business, it would be free

to monopolize the other.

We do, however, agree with your conclusion that Waste

Management's divestiture of the decree assets to a firm such as

Allied/BFI is undesirable because it would significantly reduce

competition and enhance opportunities for cooperative post-merger

price increases. We have so informed Waste Management, and we are

prepared to have management and sale to these crucial waste assets

transferred to a trustee, if Waste Management does not promptly

divest these operations to a purchases acceptable to the United

States.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Certificate of Service

I certify that on May 20, 1999, I caused a copy of the foregoing

United States's Certificate of Compliance with Provisions of the

Antitrust Procedures and Penalties Act to be served on the parties in

this case by mailing the pleading first-class, postage prepaid, to

[[Page 31647]]

a duly-authorized legal representative of each of the parties, as

follows:

Jonathan L. Greenblatt, Esquire,

Steven C. Sunshine, Esquire,

Michael Strub, Jr., Esquire,

Shearman & Sterling, 801 Pennsylvania Avenue, NW, Washington, D.C.

20004-2604.

James R. Weiss, Esquire,

Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW,

Washington, DC 20006-8425.

Counsel for Defendants Waste Management, Inc. and Ocho Acquisition

Corp.

Neal R. Stoll, Esquire,

Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, NY

10022-3897.

Counsel for Defendant Eastern Environmental Services, Inc.

Richard E. Grimm,

Kay Taylor,

Assistant Attorneys General, Antitrust Bureau, Office of the Attorney

General, State of New York, 120 Broadway, Suite 26-01, New York, NY

10271.

Counsel for Plaintiff State of New York

James A. Donahue, III,

Chief Deputy Attorney General,

Benjamin L. Cox,

Deputy Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA

17120.

Counsel for Plaintiff Commonwealth of Pennsylvania

Lizabeth A. Leeds,

Douglas L. Kilby,

Assistant Attorneys General, Antitrust Section, PL-01, The Capitol,

Tallahassee, FL 32399-1050

Counsel for Plaintiff State of Florida

Anthony E. Harris, Esq. AH 5876,

U.S. Department of Justice, Antitrust Division, 1401 H Street, NW,

Suite 3000, Washington, DC 20530, (202) 307-6583.

[FR Doc. 99-14469 Filed 6-10-99; 8:45 am]

BILLING CODE 4410-11-M