[Federal Register Volume 59, Number 6 (Monday, January 10, 1994)]
[Rules and Regulations]
[Pages 1285-1288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-511]
[[Page Unknown]]
[Federal Register: January 10, 1994]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 22, 25, 80, 87, 90, 95 and 99
[GN Docket No. 93-252; FCC 94-2]
Private Land Mobile Licenses; Reclassification
In the matter of implementation of sections 3(n) and 332 of the
Communications Act; Regulatory Treatment of Mobile Services.
AGENCY: Federal Communications Commission.
ACTION: Procedures for waiver petitions.
-----------------------------------------------------------------------
SUMMARY: As a result of recent legislation, certain private land mobile
radio licensees will be reclassified as commercial mobile radio service
licensees and will be subject to foreign ownership restrictions within
the Communications Act of 1934, as amended. The Commission has now
established a procedure by which such licensees may file a waiver
petition with the Commission to request retention of existing foreign
ownership that would otherwise not be permitted. Such waiver petitions
must be received at the Commission by February 10, 1994.
DATES: This document is effective January 10, 1994. Petitions for
waiver must be filed with the Commission by February 10, 1994.
ADDRESS: Federal Communications Commission, 1919 M St. NW., Washington,
DC 20554.
FOR FURTHER INFORMATION CONTACT:
The Private Radio Bureau, Licensing Division, Consumer Assistance
Branch, (717) 337-1212 (for information regarding the filing of waiver
petitions). For information regarding this First Report and Order,
contact Carmen Cintron at (202) 632-6450 (Common Carrier Bureau, Mobile
Services Division) or Eric Malinen at (202) 632-6497 (Private Radio
Bureau, Land Mobile and Microwave Division).
SUPPLEMENTARY INFORMATION:
First Report and Order
Adopted: January 4, 1994; Released: January 5, 1994.
By the Commission:
I. Introduction
1. On September 23, 1993, we adopted a Notice of Proposed Rule
Making (Notice)\1\ in which we proposed, inter alia, to establish a
procedure by which private land mobile radio licensees that will be
reclassified as commercial mobile radio service (CMRS) providers
pursuant to this rule making proceeding could file a waiver petition to
retain existing foreign ownership. We now establish the filing
procedure for these waiver petitions and remind all potentially
affected licensees of the February 10, 1994, filing deadline. We also
emphasize that filing such a petition will not prejudice the licensee's
right at a later date to assert that it should not be classified as a
CMRS provider.
---------------------------------------------------------------------------
\1\GN Docket No. 93-252, 8 FCC Rcd 7988, 8002-03 76-78
(1993), 58 FR 53169 (October 14, 1993).
---------------------------------------------------------------------------
II. Background
2. The Omnibus Budget Reconciliation Act of 1993 (Budget Act)\2\
amended sections 3(n) and 332 of the Communications Act of 1934, as
amended, 47 U.S.C. 153(n), 332 (Communications Act), to create a
comprehensive regulatory framework for all mobile radio services.
``[A]ny provider of a private land mobile service that will be treated
as a common carrier as a result of the enactment of the Omnibus Budget
Reconciliation Act of 1993'' is subject to the foreign ownership
restrictions imposed on common carriers by section 310(b) of the
Communications Act, 47 U.S.C. 310(b).\3\ Nevertheless, the statute
allows affected licensees to petition the Commission for waiver of the
application of section 310(b) to any foreign ownership that lawfully
existed as of May 24, 1993. The statute requires that these petitions
for waiver be filed with the Commission by February 10, 1994 (within 6
months of enactment of the Budget Act). The Commission may grant such
waivers to eligible petitioners only upon the following conditions:
\2\Pub. L. No. 103-66, Title VI, Sec. 6002(b), 107 Stat. 312,
392, 395 (1993); see H.R. Conf. Rep. No. 213, 103d Cong., 1st Sess.
492, 494-95 (1993), reprinted in 1993 U.S. Code Cong. & Admin. News
1179, 1183-84.
\3\See 47 U.S.C. 332(c)(6); see also Budget Act, Section
6002(c)(2)(B) (effective dates). For the text of Section 310(b), see
paragraph 3, infra.
---------------------------------------------------------------------------
(A) The extent of foreign ownership interest shall not be
increased above the extent which existed on May 24, 1993.
(B) Such waiver shall not permit the subsequent transfer of
ownership to any other person in violation of section 310(b).
47 U.S.C. 332(c)(6)(A), (B).\4\
---------------------------------------------------------------------------
\4\In regard to condition (B), the legislative history of the
amended statute states: ``In effect, this condition ``grandfathers''
only the particular person who holds the foreign ownership on May
24, 1993; the ``grandfathering'' does not transfer to any future
foreign owners.'' H.R. Conf. Rep. No. 213, 103d Cong., 1st Sess. 495
(1993), reprinted in 1993 U.S. Code Cong. & Admin. News 1184.
---------------------------------------------------------------------------
3. Section 310(b) states in relevant part:
No * * * common carrier * * * license shall be granted to or
held by--
(1) any alien or the representative of any alien;
(2) any corporation organized under the laws of any foreign
government;
(3) any corporation of which any officer or director is an alien
or of which more than one-fifth of the capital stock is owned of
record or voted by aliens or their representatives or by a foreign
government or representative thereof or by any corporation organized
under the laws of a foreign country;
(4) any corporation directly or indirectly controlled by any
other corporation of which any officer or more than one-fourth of
the directors are aliens, or of which more than one-fourth of the
capital stock is owned of record or voted by aliens, their
representatives, or by a foreign government or representative
thereof, or by any corporation organized under the laws of a foreign
country, if the Commission finds that the public interest will be
served by the refusal or revocation of such license.
For the purposes of section 310(b), certain partnership interests,
as well as certain other interests held by non-corporate entities and
associations, may be considered ownership interests.\5\
---------------------------------------------------------------------------
\5\See e.g., Wilner & Scheiner, 103 FCC 2d 511 (1985),
reconsideration granted in part, 1 FCC Rcd 12 (1986); see also
Moving Phones Partnership, L.P. v. FCC, 998 F.2d 1051, 1055-57 (D.C.
Cir. 1993). Section 310(b) was amended in 1974 to eliminate the
restriction on alien ownership of private radio licensees. Pub. L.
93-505, 88 Stat 1576; H.R. Report No. 93-1423, 93rd Cong., 2d Sess.,
reprinted in 1974 U.S. Code Cong. & Admin. News 6305, 6307. However,
the ban on licensing radio facilities to foreign governments or
representatives, established in section 310(a), still applies to all
licensees.
---------------------------------------------------------------------------
4. The Notice proposed to establish a petition procedure to allow
licensees to ``grandfather'' their foreign ownership. Under this
procedure, petitioners would be required to (1) identify all foreign
persons or entities holding an interest in the licensee and the
percentage of ownership interest for each; and (2) certify that the
identity and level of foreign ownership are unchanged since May 24,
1993, and that no change will occur in the future (other than
divestiture of a foreign ownership interest to a domestic person or
entity) without prior notice to the Commission.\6\
---------------------------------------------------------------------------
\6\Notice, 8 FCC Rcd at 8002-03 77.
---------------------------------------------------------------------------
5. The Notice indicated that we intend to place the burden on
licensees to file petitions, regardless of whether we have made a final
determination as to whether the licensee is subject to reclassification
as a CMRS provider. Furthermore, the Notice stated that while the
filing of a petition would not prejudice a licensee's future arguments
as to whether it should be reclassified, licensees who failed to file a
timely petition would be subject to immediate enforcement of our
foreign ownership restrictions.\7\
---------------------------------------------------------------------------
\7\Id. at 8003 78.
---------------------------------------------------------------------------
III. Comments
6. A single commenter responded to this issue. Roamer One, Inc.,
argues that the Notice misread the Budget Act's amendment to the
Communications Act to the extent that it imposes ``immediate'' foreign
ownership restrictions on all private radio licensees.\8\ It maintains
that while the Notice refers to private land mobile service providers
that ``may'' be treated as common carriers, the statute refers to
existing private land mobile service providers that ``will'' be treated
as common carriers as a result of the enactment of the Budget Act.\9\
It contends that, prior to the completion of this rule making
proceeding, the Commission may not impose alien ownership restrictions
on private radio licensees who are unlikely to be classified as CMRS
providers.\10\
---------------------------------------------------------------------------
\8\Comments of Roamer One, Inc., at 15-16 (Nov. 8, 1993); see
also id. at iii-iv.
\9\Id. at 15.
\10\Id.
---------------------------------------------------------------------------
IV. Discussion
A. Who Should File a Waiver Petition
7. Initially, we agree with Roamer One that Section 332(c)(6) does
not impose foreign ownership restrictions on all private radio
licensees. As noted above, the foreign ownership restrictions apply
only to those current private land mobile service providers that ``will
be'' classified as CMRS providers ``as a result of enactment of the
[Budget Act].'' As we discussed in the Notice, a private land mobile
radio licensee could potentially be reclassified as a CMRS licensee if
it meets two criteria: Its service: (1) Is ``provided for profit,'' and
(2) makes ``interconnected service'' available ``to the public'' or
``to such classes of eligible users as to be effectively available to a
substantial portion of the public.'' In addition, it is possible that a
service might not fully satisfy the two criteria, but nonetheless be
classified as CMRS if the Commission were to find that the service is
the ``functional equivalent'' of CMRS.\11\ If a licensee determines
that there is a possibility that it will be reclassified as a CMRS
provider, it must also determine whether its foreign ownership as of
May 24, 1993, would be prohibited under section 310(b).\12\
---------------------------------------------------------------------------
\11\See Notice, 8 FCC Rcd at 7990-96 10-40.
\12\See paragraph 3, supra.
---------------------------------------------------------------------------
8. Final rules governing regulatory classification of mobile
services may not be available on or before the February 10, 1994,
filing deadline. We recognize that this presents private land mobile
licensees with the potentially difficult decision of whether they
should file petitions for waiver. Therefore, in instances where there
is any chance at all that the licensee might later be classified as a
CMRS provider, we strongly encourage the licensee to err on the side of
filing and thereby preserve all of its rights under the new statutory
provisions. Similarly, if a licensee is uncertain of whether it would
be affected by section 310(b) restrictions absent a waiver, we strongly
recommend that the licensee file a petition.
B. Contents of Waiver Petition
9. As noted above, section 332(c)(6) permits the Commission to
grant waiver petitions only where two conditions are met. First, the
waiver can only cover ``the [licensee's] extent of foreign ownership
interest [that has] not * * * increased above the extent which existed
on May 24, 1993.'' Consistent with the legislative history quoted
previously (see note 4, supra), we interpret this language to refer to
the precise identities of persons or entities and not merely to
preexisting levels of foreign ownership interests. Petitioners must
therefore identify in their petitions all foreign interests in the
licensee as of May 24, 1993, that would, absent a waiver, be subject to
the section 310(b) restrictions and for which a waiver is sought. For
instance, except as noted below, petitioners should specifically
identify all foreign persons or entities holding an ownership interest
in the licensee and the percentage of ownership interest of each and
identify all foreign partners,\13\ officers, and directors, regardless
of whether they have any ownership interest. While we will not require
publicly traded corporations\14\ to identify each foreign stockholder
in instances where this requirement would be especially onerous,\15\ we
note that it is the responsibility of all petitioners to ensure that
all foreign ownership listed in the petition, including that held by
individual stockholders, did exist as of May 24, 1993, and to retain
documentation substantiating that ownership.
---------------------------------------------------------------------------
\13\Petitioners must list all foreign partners regardless of
whether they are general or limited partners, except that
petitioners need not list a limited partner (1) whose level of
ownership interest in the licensee does not exceed the level allowed
by section 310(b), and (2) who is ``insulated'' from the management
and control of the partnership. See, e.g., Wilner and Scheiner,
supra, 103 FCC 2d at 517 n. 31, 520 n. 43; Attribution of Ownership
Interests, Memorandum Opinion and Order in MM Docket No. 83-46, 58
RR 2d 604, 619-20 48-50 (1985).
\14\For a definition of such corporations, see First Report and
Order and Memorandum Opinion and Order on Reconsideration in CC
Docket Nos. 90-6, 85-388, 6 FCC Rcd 6185, 6213 63 (1991).
\15\See, e.g., Advanced Mobile Phone Inc., 54 RR 2d 354, 362 29
(Com. Car. Bur. 1983) (applicant demonstrated sufficient compliance
with the requirements of FCC Form 401 by indicating the percentage
of its common stock held or voted by aliens, and by listing the
identities of its ten largest stockholders and stating that none of
them was an alien, and would not be required to circulate a
questionnaire to all of its stockholders). The burden will be on any
entity claiming such an onerous burden to explain why identifying
individual shareholders would be extraordinarily burdensome.
---------------------------------------------------------------------------
10. The second condition is that the waiver cannot permit any
``subsequent transfer of ownership to any other person in violation of
section 310(b).'' We interpret ``subsequent'' here to mean subsequent
to May 24, 1993. Petitioners must therefore certify in their petitions
that the identity and percentages of each listed component of foreign
ownership are unchanged since May 24, 1993, and that each listed
foreign officer, director or partner continues to hold the same
position. The waiver can recognize only the particular person or entity
that held the ownership interest on May 24, 1993; it cannot recognize
any subsequent transfers to other foreign owners or foreign officers or
directors.\16\ If, following the grant of a waiver in light of the
above condition, a licensee wishes to transfer ``grandfathered''
foreign ownership interests, the waiver will remain valid (for the
remaining ``grandfathered'' interests) only if the transfer is made to
a domestic person or entity.\17\ The same is true for ``grandfathered''
partners, officers, and directors.
---------------------------------------------------------------------------
\16\See note 4, supra. Thus, transfers to aliens that occurred
after May 24 are not covered by the grandfathering provisions of the
Budget Act even if they occurred before the Budget Act was enacted
on August 10, 1993. Where such a transfer is found to create an
ownership interest in violation of section 310(b), the licensee will
be required to comply with section 310(b) with respect to that
interest, regardless of whether alien ownership in the licensee that
existed prior to May 24 is grandfathered.
\17\Licensees seeking to transfer their ownership or control
would also be required to comply with section 310(d) of the
Communications Act, 47 U.S.C. 310(d), and with applicable Commission
rules.
---------------------------------------------------------------------------
C. Effective Date of Section 310(b) Restrictions
11. Roamer One appears to object to our statement in the Notice
that ``all reclassifiable private licensees are immediately subject to
the foreign ownership restrictions on common carriers by section
310(b).''\18\ As noted above, Roamer One contends that, prior to the
completion of this rule making proceeding, the Commission should not
impose alien ownership restrictions on private radio licensees who are
unlikely to be classified as CMRS providers. We agree that the
restrictions in section 310(b) would only apply to licensees that are
actually reclassified pursuant to the statute and its implementation in
this rule making. Section 310(b) does not and will not apply to private
land mobile radio licensees who will not be reclassified as CMRS
providers. On the other hand, the statute does require immediate
enforcement of section 310(b) for private land mobile providers that
are reclassified as CMRS. Section 6002(c)(2)(B) of the Budget Act
states:
\18\Notice, 8 FCC Rcd at 8002 76 (emphasis added).
---------------------------------------------------------------------------
[A]ny private land mobile service provided by any person before
[the Budget Act's] date of enactment, and any paging service
utilizing frequencies allocated as of January 1, 1993, for private
land mobile services, shall, except for purposes of section
332(c)(6) of [the Communications Act], be treated as a private
mobile service until 3 years after such date of enactment.
Budget Act, section 6002(c)(2)(B) (emphasis added). Although other
common carrier regulation may not apply to some licensees for 3 years,
unless a licensee timely files and is granted a waiver pursuant to
section 332(c)(6), section 310(b) will apply immediately upon the
effective date of our rules reclassifying the licensee's service as
CMRS. Accordingly, as stated above, licensees that may be reclassified
should file a timely waiver request to grandfather any foreign
ownership or other interest that existed as of May 24, 1993, and that
might be affected by the application of section 310(b).
V. Petitioning Procedure
12. In light of the above, we adopt the following petitioning
procedure. First, petitions should be in an informal, letter format,
and must contain the caption ``COMMERCIAL MOBILE RADIO SERVICE FOREIGN
OWNERSHIP WAIVER PETITION.'' Petitions must clearly specify the
licensee's name, radio service, call sign(s), station address(es) or
geographical location(s), and contact person with telephone number.
Petitions must specifically request a waiver of section 310(b),
identify the particular subsection(s) of section 310(b) for which the
waiver is requested, and state that the waiver is sought under section
332(c)(6). The original copy of the waiver petition must be signed by
the licensee,\19\ and this signature will be taken to certify that all
statements made in the petition are true, complete, correct, and made
in good faith.
---------------------------------------------------------------------------
\19\See Section 1.913 of the Commission's Rules, 47 CFR 1.913.
---------------------------------------------------------------------------
13. In addition, as proposed in the Notice, petitions must:
(1) identify by name,\20\ as of May 24, 1993, all foreign
persons or other entities holding ownership interests in the
licensee, directly or indirectly, that would, absent a waiver, not
be permitted to hold such interests under section 310(b), and for
which a waiver is sought; likewise, petitions must identify
similarly situated foreign partners, officers, or directors of the
licensee, regardless of whether they have any ownership interest in
the licensee;
---------------------------------------------------------------------------
\20\As noted previously, publicly traded corporations are not
required to identify all individual stockholders when to do so would
constitute an especially onerous burden. See notes 14-15, supra, and
accompanying text.
---------------------------------------------------------------------------
(2) as applicable, as of May 24, 1993, identify the following
for each person or other entity (including officers, directors and
partners) identified in (1) above: residence, citizenship, office or
directorship held, number of shares or nature of partnership
interests, number of votes, and percentage of votes; also, if the
entity is other than an individual, petitions must also identify the
name, address, and citizenship of the natural person authorized to
vote the stock; and
(3) Answer the following:
(a) Have the ownership and other interests listed pursuant to
(1) and (2) above remained the same since May 24, 1993?
(b) Have the officers, directors or partners continued to retain
their positions since May 24, 1993?
If the answer to (a) or (b) is ``No,'' please explain.
14. Petitioners must also certify that, in the case of an
individual petitioner, he or she is not subject to a denial of federal
benefits, that includes FCC benefits, pursuant to section 5301 of the
Anti-Drug Abuse Act of 1988, 21 U.S.C. section 862, or, in the case of
a non-individual petitioner, (e.g., corporation, partnership, or other
unincorporated association), no party to the application is subject to
a denial of federal benefits, that includes FCC benefits, pursuant to
that section. For the definition of a ``party'' for these purposes, see
47 CFR 1.2002(b).
15. The Commission has no authority to extend the Congressionally
mandated deadline date, so it is imperative that waiver petitions be
filed on time. To be timely received, petitions must, by February 10,
1994, be either (1) hand-delivered to the offices of the FCC in
Gettysburg, Pennsylvania, at the address below, or (2) received through
the U.S. Mail or other mail delivery service at the address below.
Federal Communications Commission, Attn: CMRS Foreign Ownership Waiver
Petition, 1270 Fairfield Road, Gettysburg, Pennsylvania 17325--7245.
Licensees should file one original and two copies. These petitions
do not require a filing fee.
VI. Final Regulatory Flexibility Analysis
16. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.
604, the Commission's final analysis is as follows:
A. Need for, and Purpose of, This Action
As a result of recent legislation, certain private land mobile
radio licensees will be reclassified as commercial mobile radio service
licensees and will be subject to foreign ownership restrictions within
the Communications Act of 1934, as amended. This present First Report
and Order describes the procedure by which such licensees may file a
waiver petition with the Commission to request retention of existing
foreign ownership that would otherwise not be permitted.
B. Summary of the Issues Raised by the Public Comments in Response to
the Initial Regulatory Flexibility Analysis
In regard to the foreign ownership issue addressed by this First
Report and Order, no comments were submitted in response to our Initial
Regulatory Flexibility Analysis.
C. Significant Alternatives Considered
No significant alternatives were considered.
VII. Ordering Clauses
17. Accordingly, It is Ordered That, pursuant to the authority of
sections 4(i), 303(r), and 332(c)(6) of the Communications Act of 1934,
as amended, 47 U.S.C. 154(i), 303(r), and 332(c)(6), this First Report
and Order is adopted, effective upon publication in the Federal
Register.\21\
---------------------------------------------------------------------------
\21\In light of the statutory deadline for filing petitions, we
find that there is good cause to make this action effective
immediately upon publication in the Federal Register.
---------------------------------------------------------------------------
18. For further information on filing a waiver petition, contact
the Private Radio Bureau, Licensing Division, Consumer Assistance
Branch, (717) 337-1212. For further information regarding this First
Report and Order, contact Carmen Cintron at (202) 632-6450 (Common
Carrier Bureau, Mobile Services Division) or Eric Malinen at (202) 632-
6497 (Private Radio Bureau, Land Mobile and Microwave Division).
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-511 Filed 1-7-94; 8:45 am]
BILLING CODE 6712-01-M